Abstract:
Banks in the United Kingdom have long resisted an attempt to expand their liability under the Consumer Credit Act 1974, s 75. Particular controversy has surrounded the question whether such liability can arise when a bank’s customer uses his or her credit card to pay for substandard goods or services. The exponential increase in credit card use over recent years has led credit card issuers to oppose the imposition of connected lender liability in two situations in particular: when a customer uses their credit to purchase goods or services from a supplier who has been recruited to a credit card network by a merchant acquirer; and when a credit card has been used abroad. Given the commercial significance of these issues to the United Kingdom banking community, their resolution in Office of Fair Trading v Lloyds TSB Bank is timely.