Could consumers see the rights they get with credit cards extended to debit cards?
Consumers who buy goods with a debit card could enjoy the same protection as those who use a credit card, if new plans to shake up the industry get
In the current uncertain climate, many consumers are finding themselves out of pocket each year because of the rise in the number of companies
going bust - or because they have been ripped off by rogue internet retailers or bad service, such as non-delivery.
However, the government is currently conducting a review of the credit card industry, and has hinted that it might tighten the rules to give greater
protection to those who pay by debit card. (See: How the government credit and store card proposals affect you.)
Credit card protection
At present, one of the best ways to protect yourself when making payments is by using a credit card as under Section 75 of the Consumer Credit Act,
your card provider is "jointly and severally liable" with the retailer, which means you have the right to claim from your issuer if the retailer refuses to
pay, or has gone out of business.
The rules enable you to reclaim money on purchases worth between Â£100 and Â£30,000 that you don't receive or are faulty.
What protection is offered by a debit card?
While shoppers can avoid losing out by paying with a credit card, many people are reluctant to buy goods and services on credit - and particularly
when making purchases online.
But if you pay by debit card, you generally aren't covered if goods are faulty, fail to arrive, or if a company stops trading; this is because debt cards are
not, strictly speaking, credit agreements.
That said, some Visa debit-card providers will make good the loss through a voluntary scheme known as Visa Chargeback which gives similar
protection to that granted for credit card purchases.
Credit card crackdown
The government is in the middle of a crackdown on credit card lending, and the UK Cards Association - which represents the credit card industry - has