Credit card companies have been accused of flouting consumer protection law by denying refunds to shoppers and holidaymakers owed money for goods or services that were faulty or not delivered.

Under section 75 of the Consumer Credit Act 1974, card providers are supposed to provide refunds if you buy any item costing between £100 and £30,000 on a credit card and the goods are defective or do not turn up. This lifeline means that if you order something and the retailer goes bust, you can still claim back your money from the card company.

However, legal experts warn of a growing tendency for providers to try to wriggle out of making repayments under false pretences. Some customers report being told that claims are void because they failed to notify the card company within a set period — normally 90 days. Legally, however, customers have six years to claim, even if they no longer use the card.

The Financial Ombudsman Service (FOS) has experienced a 50 per cent jump in complaints linked to section 75. Martyn James, of the FOS, says: “Between 50 and 75 claims related to section 75 are being lodged each week, driven by the economic situation. As more suppliers go out of business a growing number of people are having to rely on credit card companies to provide refunds and are coming to the FOS when their claims are rejected.”

Tesco Personal Finance and Lloyds are among the worst for rejecting claims for compensation, say lawyers, though the lenders deny this.

Helen Lacey, of Which?, the consumer organisation, says: “We have seen a real increase in calls from members complaining about their credit card providers rejecting their claims for spurious reasons.”

Though some experts believe that the economic downturn has led some companies to attempt to limit refunds, poor training and a misunderstanding of consumer law may also be responsible for the increase in disputes.

Ingrid Gubbay, of Hausfeld & Co, the consumer and human rights law specialist, says: “I have seen customers who were made to respond to an overwhelming number of letters from credit providers. This points to either a lack of training of customer service staff or a deliberate policy to avoid paying legitimate claims in the hope that claimants will give up and go away. These increasingly routine avoidance tactics at best deny the underlying purpose of section 75 and at worst are a clear breach of the Consumer Credit Act and financial services regulation.”

Often claims are rejected on the basis of obscure points. Ms Lacey explains: “Some people have been told that their claims are not valid because they purchased their goods outside the UK; others that the claim has been rejected because the trader has gone out of business — again not true.”

Other excuses include companies insisting that items bought as part of a set have to be claimed for separately. For example, the lender might say that a dinner set bought as a wedding present has to be split into individual plates, cups and saucers. The claim is then turned down because each of these items is worth less than £100.

Ms Gubbay says: “In our opinion the loss should be based on the retail price that was paid.”

Another ruse is to reject a claim because you have changed your credit card provider since buying the goods. However, the provider of the card used to buy the goods remains liable, even if you are no longer a cardholder, and should provide a refund.

Sometimes, companies insist that you can claim for money that you have lost but not for losses made by friends or family, even though you used the same card to make the transaction. This could arise when a card is used to book a family holiday and the travel company then goes bust.

Ms Gubbay says: “This is complete nonsense if you can prove the loss by showing the purchase of the tickets with separate family names or bank statements that correspond with the amount claimed.”

There is no doubt that the growing number of companies going bust has contributed to the jump in claims and disputes. But section 75 also protects consumers who buy goods or services from solvent companies. A common ploy is to tell customers that they must first seek a refund or obtain a court judgment against the supplier. However, the law states that the customer can choose whether to claim against the supplier, the card issuer or both.

It is not only credit card borrowers who are protected by section 75. The law applies to other credit agreements, such as many car loans arranged through dealers. Hire purchase agreements may also be covered, but it may be hard to claim if you have not kept up with the payments, as the car does not belong to you until it is paid off.

If an agreement is covered, it will usually say something like “this agreement is regulated under the Consumer Credit Act 1974” in the terms and conditions.

Since a landmark House of Lords ruling in 2007 it has been possible to claim for goods or services bought abroad — in person when travelling or on holiday or on the internet. Before the ruling, refunds were made at the lender’s discretion.

Debit cards, store cards and charge cards are not covered. However, anyone who uses a Visa debit card is protected by its Chargeback scheme. The scheme applies to all Visa debit cards, and can also be used for Visa credit card purchases where section 75 is not applicable, such as for goods costing less than £100. It also covers prepaid Visa cards and Visa Electron purchases where the goods do not arrive, arrive damaged or are not as described.

Payments made through online payment systems such as PayPal are not covered by section 75 but should be covered by Chargeback. It also provides protection if your card is used fraudulently.

To make a claim using Chargeback, customers must contact the card issuer, which then contacts the company’s payment-processing bank to reclaim the money. You should receive your money even if the company that sold the goods has gone bust.

Unlike section 75, there is a 120-day time limit on Chargeback claims, which starts from the day that you become aware of a problem or, in the case of something like flights with an airline that goes out of business, from the day that the flight was to depart.

To claim compensation using section 75 or Chargeback, you must prove breach of contract. This is clearcut if the goods or services were not delivered, but it is not so straightforward if you are claiming that the goods were not of a satisfactory quality or not as described.

If the dispute boils down to a question of taste, or simply to disappointment with the goods or services, a claim is unlikely to be successful. The FOS reports the case of a woman who made a claim because her new haircut, paid for by credit card, did not suit her. Unsurprisingly, the claim was rejected.

Do not give up if a claim is turned down. If you experience difficulties, contact Citizens Advice (www.citizens advice.org.uk), Consumer Direct (consumerdirect.gov.uk) or Which? Legal Service (whichlegalservice.co.uk).

Your card company has eight weeks to respond to a complaint. If it fails to do so, or rejects your complaint, you can take your case to the FOS. Visit financial-ombudsman.org.uk or call 0845 0801800.

Case study: “Barclaycard gave us the brush-off”

Richard Mack and his wife, Helen, both 34, considered taking Barclaycard to the small claims court for refusing to refund €1,215 (£1,000) that they paid to a timeshare company.

In October 2007 the couple, from Liverpool, used their credit card to pay a Gibraltar-based company called etoo. It said that it had a buyer for their timeshare in Florida and that a deposit was needed as insurance.

However, the promised buyer never materialised and when the Macks tried to get back their deposit the company failed to return their calls. This prompted them to contact their card provider, Goldfish, which said that they would be able to file a section 75 claim if their deposit wasn’t returned after 12 months. They waited patiently and in November went back to Goldfish, which was now owned by Barclaycard. Last month Barclaycard rejected the claim, arguing that there was no breach of contract.

Mr Mack, who works in the car industry, says: “They gave us the brush-off after making us wait for six months.”

However, last week, after The Times intervened, Barclaycard agreed to a refund.

How to make a claim

• First write to your card provider. Include related paperwork and state that the provider is liable for your claim under section 75 of the Consumer Credit Act.

• You have six years (five in Scotland) from the date of the breach of contract — when the seller failed to provide the goods — to make a claim.

• If your claim is rejected, you have six months to complain to the Financial Ombudsman Service (financial-ombudsman.org.uk). You can also complain to the FOS if the card company does not deal with your claim within eight weeks.

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A small number of MPs and peers will face criminal investigations into allegations they misused their expenses.

Scotland Yard said a joint assessment panel of senior detectives and prosecutors had decided full inquiries were necessary.

The police inquiries were expected to focus on politicians accused of deliberately misleading the authorities or claiming "phantom mortgages".

The investigation will be conducted by officers from the Met's Economic and Specialist Crime Command, overseen by Temporary Assistant Commissioner Janet Williams. It is understood the joint panel of experts will continue to consider a small number of other individuals.

A Metropolitan Police spokesman said: "After consideration by the joint Metropolitan Police and Crown Prosecution Service assessment panel the Met has decided to launch an investigation into the alleged misuse of expenses by a small number of MPs and peers."

Scotland Yard declined to name the MPs or peers at the centre of the police inquiries or their political allegiance.

But it is widely known that those at the centre of the initial probe were linked to so-called "phantom mortgages".

Labour MPs David Chaytor and Elliot Morley both announced they would stand down after it emerged they claimed interest payments for paid-off mortgages.

Two other MPs, Ben Chapman and Bill Wiggin, may also face further inquiries after they were exposed as claiming for mortgages that did not exist.

Baroness Uddin, who apparently claimed an empty Maidstone flat was her main home so she could claim expenses for peers living outside the capital, may also face questions.

Last Updated: Friday, 19 June 2009, 18:01 GMT

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Hopes of a breakthrough in the bitter jobs dispute at an oil refinery have collapsed as expected talks failed to go ahead despite a series of wildcat strikes breaking out across the country.

Downing Street said the conciliation service Acas had convened a meeting between management at the Lindsey oil refinery in North Lincolnshire and union leaders following the shock decision to sack almost 650 workers who have been taking unofficial industrial action for the past week.

Union leaders and Acas officials waited for the talks to start, but it was revealed later that they never got under way.

Strikes spread to several power stations and other sites amid fears of a full blown industrial dispute, with some activists warning power workers could join in, threatening electricity supplies.

Acas said in a statement: "We were invited by Total management for potential talks between the parties today.

"After discussions between Total management and their contractors, they decided not to go ahead with the talks. We remain in touch with the parties."
Union sources said their officials waited for four hours before being told Total "no longer felt the need" to have a meeting.

The sacked workers were told they have until Monday to reapply for their jobs.

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A dispute over jobs at an oil refinery is set to escalate after hundreds of workers who have been taking unofficial industrial action were sacked.

French giant Total wrote to 900 workers at its Lindsey oil refinery in Lincolnshire saying they had until Monday to reapply for their jobs.
Union leaders condemned the dramatic development and warned that the dispute would escalate.

Paul Kenny, general secretary of the GMB said: "Total has for a full week refused to "It seems pretty obvious that there a is case of victimisation taking place. Laying off the workforce will not solve the problem, it will escalate it."

Wildcat strikes had already spread to several power stations and other terminals in the past few days as thousands of workers took sympathy action. The sackings are expected to spark fresh walkouts.

The dispute flared a week ago when a contractor laid off 51 workers while another employer was hiring staff at Lindsey, which was hit earlier this year by unofficial strikes over jobs for non-UK workers.

About 1,200 contract workers at the terminal have been taking unofficial action all week as efforts to convene talks floundered.

In a statement, Total said striking workers were taking part in an "unofficial, illegal walk-out" that was "repudiated" by both Unite and the GMB unions.

Unite said it was "extremely concerned" about Total's actions and was working frantically to facilitate immediate talks with the company's local management.

Last Updated: Friday, 19 June 2009, 06:39 GMT meet with the unions to resolve this matter through Acas

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Department of Energy and Climate Change (National) Consultation details conditions for new UK coal power stations.

Clean coal technology could bring between £2-4 billion a year into the UK economy by 2030, and support between 30,000-60,000 in jobs such as engineering, manufacturing and procurement, according to new independent research published today.

The report, ‘Future Value Of Coal Carbon Abatement Technologies To UK Industry’ by AEA Group, is published today alongside the Government’s consultation document ‘A framework for the development of clean coal’.

As outlined by Ed Miliband to Parliament on 23 April, the consultation details how the Government proposes to reconcile the need to curb emissions of carbon from future coal fired power stations with the need to maintain a secure diverse energy mix. It proposes:

Requiring CCS demonstration: New coal fired power stations should only be given consent in the UK if they demonstrate CCS on at least 300MW net (around 400MW gross) of capacity from day one. Each demonstration project would have to store 20 million tonnes of CO2 over 10-15 years. The proposed framework recognises that CCS demonstration will only proceed with Government intervention. A financial incentive funded by electricity suppliers will support up to four commercial-scale CCS demonstrations in the UK. Alongside the Government’s ongoing competition to build a post-combustion demonstration, up to three further projects including pre-combustion technology could be supported. The primary legislation required to implement this mechanism will be sought at the earliest possible opportunity.

Requiring CCS retrofit: All new coal fired power stations should be required to retrofit CCS to their full capacity within five years of CCS being proven. We are planning on the basis that this point will be reached by 2020, and an independent review, potentially led by the Environment Agency, would report in that year on the status of the technology. The consultation document also explores whether this requirement should apply to existing coal fired power stations.

Contingency: In the event that CCS takes longer than expected to be judged proven, further measures may be needed to ensure emissions from coal are substantially reduced. These measures could include an annual cap on individual power stations’ emissions, a limit on running hours or an emissions performance standard that would limit the amount of CO2 that could be emitted per unit of electricity generated.

Energy and Climate Change Secretary Ed Miliband said:

“The conditions we’re proposing for new coal are the most environmentally ambitious of any country in the world, requiring the demonstration of CCS on a substantial proportion of any new power station and the 100% retrofit of CCS when it’s proven.

“At the same time, by providing funding for demonstrations, we can maintain coal as part of our energy mix, supporting diversity and therefore security of supply.

“By acting early, jobs will also be created as Britain develops the expertise in what could be a major new industry, with CCS projects offering the potential to form the hubs for clusters of low carbon industries.

“By driving the development of CCS in this country, we are also, as a country, playing an essential role in the battle against climate change.”


Coal currently accounts for 37% (29GW) of the UK’s electricity capacity, generating 31% of the UK’s electricity in 2008.

These proposals were first outlined to Parliament by Ed Miliband on 23 April. His statement can be found at: www.decc.gov.uk

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