Credit card holders have been advised to be aware of credit card companies who have been accused of breaking the law by refusing refunds to consumers.

Legal experts have advised that many card companies have tried to avoid paying out refunds, often being told incorrect information by companies over the grace period allowed to claim for any reimbursements.

Due to the Consumer Credit Act 1974 card companies have to give refunds to clients for goods that are defective for any amount between £100 and £30,000.

Martyn James, of the FOS, says: “Between 50 and 75 claims related to section 75 are being lodged each week, driven by the economic situation. As more suppliers go out of business a growing number of people are having to rely on credit card companies to provide refunds and are coming to the FOS when their claims are rejected.”

Ingrid Gubbay, of Hausfeld & Co, the consumer and human rights law specialist, says: “I have seen customers who were made to respond to an overwhelming number of letters from credit providers. This point to either a lack of training of customer service staff or a deliberate policy to avoid paying legitimate claims in the hope those claimants will give up and go away. These increasingly routine avoidance tactics at best deny the underlying purpose of section 75 and at worst are a clear breach of the Consumer Credit Act and financial services regulation.”