Don't dismiss VISA chargeback

Lloyds TSB debit card

As no-frill airlines continue to go bust, and with Ryan Air warning that many more face collapse next year, people booking flights are rightfully concerned about losing their money.

Already, holidaymakers have been left high and dry by the high-profile collapse of players such as Zoom, XL and, most recently, Sterling. While it is possible to buy travel insurance to protect yourself against an airline failing, the majority of policies do not include this sort of cover. And even though customers buying flights on credit cards are protected by the section 75 of the Consumer Credit Act, many people would prefer to buy using a debit card rather than borrow on a hefty APR.

The good news is payments made by debit card could still cover you should the airline fail before you complete your journey thanks to a scheme called VISA chargeback, which applies to all banks that issue VISA cards.

The majority of banks in the UK issue VISA debit cards. The chargeback scheme protects you if the goods you bought on your debit card does not arrive or is damaged, or you don’t receive the service you paid for.

There is no maximum or minimum limit on VISA chargeback claims. However, if you do need find yourself in a position to apply to the scheme then you must make a claim within 120 of the transaction being made.

Banking groups HSBC (including First Direct) and the Royal Bank of Scotland (including NatWest) issue Maestro rather than VISA debit cards. There is no chargeback scheme for Maestro, so debit payments made using this type of card are not protected if the goods and services do not arrive.

The exception is when the purchase is made online from an overseas website.