Office of Fair Trading v Lloyds TSB Bank Plc & Ors

Office of Fair Trading v Lloyds TSB Bank Plc & Ors

Section 75(1) of the Consumer Credit Act 1974 does not apply to foreign transactions where the contract between debtor and supplier was made wholly outside the United Kingdom, governed by foreign law, and the goods delivered or services supplied outside the United Kingdom. Four-party credit card transactions fall within the definition of restricted-use credit agreements and arrangements exist between creditor and supplier for the purposes of section 12(b), so section 75 applies to domestic four-party transactions.

Parties
Claimant: The Office of Fair Trading; 1st Defendant: Lloyds TSB Bank plc; 2nd Defendant: Tesco Personal Finance Limited; 3rd Defendant: American Express Services Europe Limited
Jurisdiction
England and Wales
Judgment Date
12 November 2004
Procedural Posture
Declaratory Proceedings / Judgment After Trial of Preliminary Issues
Outcome
Declarations granted in part; section 75(1) does not apply to foreign transactions as defined; section 75(1) applies to domestic four-party credit card transactions.
Legal Topics
Connected Lender Liability, Credit Card Transactions, Extra Territorial Application, Consumer Credit Act 1974 Section 75
Consumer Credit Banking Law Statutory Interpretation Connected Lender Liability Credit Card Transactions Extra Territorial Application Consumer Credit Act 1974 Section 75

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Parties

The Office of Fair Trading

Claimant

Lloyds TSB Bank plc

1st Defendant

Tesco Personal Finance Limited

2nd Defendant

American Express Services Europe Limited

3rd Defendant

Procedural Posture

Declaratory Proceedings / Judgment After Trial of Preliminary Issues

Legal Issues

  1. 1 Whether four-party credit card transactions fall within the definition of restricted-use credit agreements under section 11(1)(b) of the Consumer Credit Act 1974
  2. 2 Whether there are 'arrangements between' the creditor and supplier in four-party transactions for purposes of section 12(b)
  3. 3 Whether section 75(1) applies to foreign transactions (contracts made, governed by foreign law, and performed abroad)

Ratio Decidendi

Section 75(1) of the Consumer Credit Act 1974 does not apply to foreign transactions where the contract between debtor and supplier was made wholly outside the United Kingdom, governed by foreign law, and the goods delivered or services supplied outside the United Kingdom. Four-party credit card transactions fall within the definition of restricted-use credit agreements and arrangements exist between creditor and supplier for the purposes of section 12(b), so section 75 applies to domestic four-party transactions.

Court Disposition

Declarations granted in part; section 75(1) does not apply to foreign transactions as defined; section 75(1) applies to domestic four-party credit card transactions.

Orders

  • Declaration that section 75(1) does not apply where the contract was made wholly outside the UK, governed by foreign law, and goods/services supplied outside the UK.
  • Declaration that section 75(1) applies to domestic four-party credit card transactions.