As a result, credit card issuers are individually and jointly liable with suppliers if a consumer has a valid claim against a supplier for misrepresentation or breach of contract. This applies overseas purchases when the price is between £100 and £30,000. Cardholders are free to make a claim against the credit card issuer as well as, or instead of, the supplier.

OFT chief executive, John Fingleton, said: “We are pleased that the House of Lords has resolved the issue, and particularly happy that it has been resolved in a way that gives greater protection to consumers.”

Yesterday’s “decision by the House of Lords is great news for consumers,” agrees personal finance expert at uSwitch.com, Mike Naylor. “This is especially important with the growth of internet shopping where goods are often shipped to the UK from sites based overseas,” he adds.

Nevertheless, Lloyds TSB feels the decision is unfair. A statement from the bank said: “We are disappointed with the decision as we have long believed that Section 75 has no validity in relation to foreign credit card transactions.”

“However, given that the House of Lords has confirmed the Court of Appeal ruling, we will continue our policy of paying valid claims for overseas transactions,” it added.

It has also come to light that credit card companies have introduced 31 different increases to charges in the last month. These higher fees could have a significant impact on consumers who withdraw cash as well as on cash rates.

According to Moneyfacts, Alliance and Leicester has raised its cash fee jump from 2.25 per cent to 3 per cent, so that a £250 withdrawal will now cost £7.50. Meanwhile, the AA, Bank of Scotland, Halifax and Intelligent Finance have increased rates from 2.5 per cent to 3 per cent. Smile’s Gold Visa has seen the cash rate rise from 14.9 per cent to 23.9 per cent.

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