If Greece or Italy or Portugal (say) left Euro any FOREX effect on Section 75 claims?

2sides2everystory

I am planning a holiday for Summer 2012 in one of these countries and am negotiating a deal direct with a hotel. There is a good deal on the table but they want a large non-refundable deposit in Euros.

If I pay by Credit Card, and first the country leaves the Eurozone then the hotel goes bust, would any successful Section 75 claim be necessarily settled in Euros of in (say) drachma, lira, escudos?

richardw

Is it a Euro credit card?

NFH

I'm fairly sure that Section 75 claims are always assessed on the GBP amount, not on the local currency. Therefore the potential events that you describe are irrelevant.

2sides2everystory

Thanks NFH, but although the events may be irrelevant, there is a real but unquantifiable risk they may actually occur this booking season, don't you think?

Richard, it's a GBP card I would use, as I am not sure a Euro card comes with Section 75 protection, does it?

richardw

Are you worried about the replacement currencies exchange rate with GBP if you paid with a UK credit card, and you'd lose out because the rate may not be in your favour?

NFH

2sides2everystory wrote: »

Thanks NFH, but although the events may be irrelevant, there is a real but unquantifiable risk they may actually occur this booking season, don't you think?

No, I don't think it's something to worry about, because:

• The EU will do everything possible, for political reasons, to keep existing Eurozone countries in the euro.
• If a country does exit from the euro, it would require a huge amount of planning and changes to banking systems. It's not something that could happen overnight. It would be more like several months.

There would also be no impact on a Section 75 claim.

NFH

2sides2everystory wrote: »

Richard, it's a GBP card I would use, as I am not sure a Euro card comes with Section 75 protection, does it?

I don't know of any UK-issued EUR-denominated credit card (i.e. not a debit card, deferred debit card or charge card). If such a card existed, then it would indeed be subject to Section 75.

NFH

A quick search of Google returned the following articles. No country will exit from the euro. It's just not going to happen.

The logistics of Greece leaving the Euro

Greece could not exit euro without leaving EU (particularly the second half)

2sides2everystory

richardw wrote: »

Are you worried about the replacement currencies exchange rate with GBP if you paid with a UK credit card, and you'd lose out because the rate may not be in your favour?

Yes - the worry would be that say a drachma would fall like a stone and that a Section 75 indemnity would be based on me originally having bought into not only a PIIGS hotel's economic stability as protected by Section 75 in terms of me actually arriving at the original transactional location and being indemnified (say in drachma), but also into the economic stability of a PIIGS country e.g. of the worth of a drachma (which may not be protected by Section 75).

Sorry if that still looks a bit confused, and apologies to NFH for labouring a hypothetical which depends on a likelihood of an event seen as absurd.

NFH

2sides2everystory wrote: »

Yes - the worry would be that say a drachma would fall like a stone and that a Section 75 indemnity would be based on me originally having bought into not only a PIIGS hotel's economic stability as protected by Section 75 in terms of me actually arriving at the original transactional location and being indemnified (say in drachma), but also into the economic stability of a PIIGS country e.g. of the worth of a drachma (which may not be protected by Section 75).

None of this affects Section 75. A Section 75 claim would be on the GBP amount "borrowed". The local currency amount would have no bearing on it. Section 75 is the same regardless of whether the local transaction currency is GBP, EUR, GRD or GRN etc.

2sides2everystory

Hi guys

Indulge us a bit further if you will - even before I asked the extended question in my original post (and thanks to NFL in particular for answering it) I had kind of assumed that if I pay the foreign hotel (in Euros) using my UK GBP credit card that indeed I could rely upon Section 75 to protect all my outlay should the hotel go bust.

However, having raised the question, knocked it about a bit here at home and Googled a little bit, I can find surprisingly little absolute confirmation that this is indeed a bang-to-rights Section 75 claim scenario. What I have discovered is that Section 75 it is not something required by EU Directive - it seems to be pretty much unique to UK.

That has wobbled me a little because I vaguely recall that some years ago there was a question mark as to whether Section 75 actually applied to purchases overseas. My recollection is that the card companies voluntarily extended the priotection to cover such?

Can someone (NFL maybe) remind me how exactly the Section 75 protection would work please?