Tesco banking reassures customers

Tesco banking has sought to reassure its 2 million customers that they will still be protected following a High Court ruling that credit card companies should not be liable for goods and services procured outside the UK.

Under the Credit Card Act of 1974 credit card companies were liable for faulty goods or services bought overseas and valued between £100 and £30,000, but that has changed following an action brought by Lloyds TSB, Amex and Tesco banking. The Office of Fair Trading is said to be considering an appeal.

Speaking on BBC Two's 'Working Lunch', Alistair Smillie of Tesco banking stressed that the action had been brought to guard against exceptional claims which were thought to be unfair.

"If a consumer's entered into a transaction in good faith overseas and there is a problem with that, we will continue our policy to look at each one of these and at Tesco we will pay out on a favourable basis," he said. "What we're protecting here is a situation whereby a consumer maybe buys a high risk product overseas and it's a high risk, a high value and it's possibly a less reputable source that they're getting from."

However, Dan Levene from Citizens Advice, speaking on the same programme, said his organisation was concerned that people may not now have the necessary protection.

"Under the previous law people knew that there was a legal safety net there, that if something went wrong with their purchases they'd be covered," he said. "Following this decision the worry is that everything is down to goodwill a bit now; that the credit card companies can say, sorry you're not covered, and that worries us."

According to the BBC, Lloyds TSB, Amex and Tesco banking say they will only get involved where there is a really controversial claim and HSBC, Sainsbury's and the Bank of Scotland say they do not intend to change their policy at all.