Office of Fair Trading
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OFT imposes requirements on Citi for overseas credit card transactions
The Office of Fair Trading has imposed requirements on Citifinancial Europe plc (Citi) after its terms and conditions had wrongly claimed it did not share joint liability for overseas credit card transactions. Under the requirements Citi will invite those consumers who feel they may have been misled, and think they have a claim, to contact them.
Under Section 75 of the Consumer Credit Act 1974, credit card issuers are individually and jointly liable with suppliers if a consumer has a valid claim against the supplier for misrepresentation or breach of contract. Following an investigation, the OFT found that up until 1 December 2008, Citi had expressly stated in the terms and conditions of several of its credit cards that use of the cards abroad would not be covered by the provisions of section 75. This has been legally incorrect since 22 March 2006 when the Court of Appeal gave judgment, subsequently upheld by the House of Lords, that section 75 did apply to overseas transactions. The OFT raised its concerns with Citi and confirmed it intended to impose requirements. Citi acknowledged the problem and, as provided for under the Consumer Credit Act 1974, made a proposal to address the OFT's concerns.
Ray Watson, OFT Director of Credit, said:
'Section 75 provides important protection for consumers who use their credit cards abroad. While in practice Citi has been honouring claims for overseas use of its cards, some of its customers may have been misled into not claiming by its stated exclusion of liability for overseas transactions. Citi has recognised the problem and has acted responsibly to make consumers aware of their rights.'
NOTES
1. Section 75 of the Act makes clear that credit card issuers, in respect of both UK and overseas transactions, have individual and joint liability with suppliers if a consumer has a valid claim against the supplier for misrepresentation or breach of contract. It does not apply to non-commercial agreements or so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000.
2. Under the requirements Citi will inform all holders of its credit cards, past or present (since 22 March 2006) about the issue and invite them, if they feel they have been misled by such reference, and if they feel they may have a valid claim, to contact Citi. A copy of the requirements can be found online at http://www.oft.gov.uk/news/press/2009/45-09.
3. The credit cards concerned are:
* Citicard (Platinum Visa,
Platinum Mastercard and Visa Gold)
* Citicard Visa
Classic
* Ultima
* AAdvantage Visa
* Private
Bank
* Audi Mastercard
* Shell Mastercard
* Easyjet
Mastercard
* Bmibaby Mastercard
4. Past customers who may have subsequently moved address, and who feel they may have a valid claim, should contact:
Tina Fisher
Transaction Services
Citifinancial Europe
plc
Riveride Road
Pride Park
Derby DE99 3GG
Tel:
01332 335 857
5. Although the Court of Appeal made its decision on the application of section 75 to foreign transactions on 22 March 2006, this will then have applied to any valid claim against Citi existing at that date.
6. Following implementation of the OFT's new powers under the Consumer Credit Act 2006 on 6 April 2008, where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose 'requirements' on the licensed business. Requirements may require a business to do or not to do (or to cease doing) anything specified for the purposes connected with addressing the OFT's dissatisfaction, or securing that matters of the same or a similar kind do not arise.
7. A breach of a requirement can lead to a fine of up to £50,000 and/or be grounds for revocation of a consumer credit licence.
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