Frequently Asked Questions
Why is it more expensive to withdraw cash on a credit card than it is to make a regular retail purchase?
You can use a credit card to withdraw cash at an ATM, over a branch counter, or at a Bureau de Change. There is usually a handling charge for each withdrawal, typically a small percentage of the amount withdrawn (e.g. 2.5%, though this is usually subject to a minimum amount of, say, around £2.50). This is because by taking cash you are accessing the direct line of credit rather than going via a third party, such as a retailer, who would usually pay the card issuer for the credit service.
With chip and PIN, who is liable for card fraud?
Consumers remain fully protected from the cost of card fraud and are covered under The Lending Code. From 1 January 2005 there was a shift in liability for some types of card fraud from banks to retailers, but this will not affect cardholders in any way. If businesses have chip and PIN terminals in store, they are covered for the cost of card fraud whether customers enter their PIN or their signature, just so long as staff follow the on-screen prompts and carry out the routine checks to ensure cards have not already been reported lost or stolen. Banks will continue to be liable for the cost of card fraud committed on old-style non-chip and PIN cards, so by accepting them businesses are not putting themselves at risk in any way
What are the official rules and regulations regarding transaction fees on credit card payments?
Credit agreements in general are regulated by the Consumer Credit Act 1974. Fees for various transactions on credit cards, such as cash withdrawals, are competitively priced by each card issuer and you should refer to your terms and conditions to find out exactly what those charges are.
If my credit card is stolen and used within the EU, am I liable for any of the bill or is it paid for by the credit card provider?
The most you will ever have to pay if you are the victim of card fraud is £50. In practice, most banks refund you with the full amount. However, if your card issuer can show that you have acted fraudulently or without reasonable care, you may be liable for all losses on the card. A common example of acting without reasonable care is writing down your PIN and storing it with your card. An explanation of liability for losses can be found in section 6 of The Lending Code.
If I pay with my credit card and the product is defective, is the credit card card company in any way liable?
In situations like this the customer should first of all complain to the retailer involved. If the dispute is not resolved, however, and the customer has paid between £100 and £30,000 for the product using a credit card, then Section 75 of the Consumer Credit Act applies. This means that the card company has equal liability and you can get your money back from them. This would also apply in a situation where the company involved goes bankrupt and no goods are received.
My credit card issuer/bank held up a transaction I was making abroad why would they do this?
Your card company is probably using fraud-detection software that checks for unusual spending patterns on its customers' cards. If you don't normally use the card abroad the software will spot this and your transaction may be held up while the card company makes checks to see if the suspect transaction is genuine or not. If it isn't, an immediate block can be put on the card, stopping a fraudster from using it further. Some card companies like their customers to advise them if they are going to be using their cards abroad. Whether you do this or not you should always keep a note of your card company's 24-hour contact number with you in case you need to speak to them in an emergency.
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