A landmark legal judgement earlier this month has ruled that consumers who buy goods or services abroad on their credit card that turn out to be faulty are entitled to a refund from their credit card company.

The House of Lords confirmed that Section 75 of the Consumer Credit Act – which allows consumers who pay for defective goods on their credit card to claim redress from their credit card company – applies to goods and services bought overseas as well as those purchased in the UK. This means that if an overseas purchase of between £100 and £30,000 is made and the item is faulty or not delivered, consumers are able to make a claim from the supplier, or credit card company, or both.

The ruling is a positive piece of news for consumers, but will come as a blow to banks and credit card companies who will face rising bills as increasing numbers of shoppers purchase goods on the internet from overseas suppliers and travel overseas regularly. There are now nearly 70 million credit cards held in the UK alone and last year, around £10 billion was spend on goods and services overseas.

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