 Prepaid cards are not covered by the Consumer Credit Act (CCA) and hence, you don't really have the sort of purchase protection that you have with a credit card and until recently, prepaid card providers had not taken any initiative as such to provide consumers with protection themselves.
However, two prepaid card providers have taken initiatives to provide purchase protection to consumers. They are:
- Freedom Prepaid Card with 30-day purchase and payment protection
 The card comes with 30 day purchase protection, 30 day payment protection and an extended 12 month warranty. Read the Freedom prepaid card review to find out more.
- Cashplus Prepaid Card with purchase protection
 The Cashplus Gold prepaid card comes with purchase protection where you get protection if a company you have made a purchase from goes bust as you may be able to get a refund with your Cashplus prepaid card. More information is available on the Cashplus Prepaid Card Website.
A lot of consumers are not aware of the Consumer Credit Act (CCA). As per section 75 of this Act, when a consumer buys something using their credit card, their contract is with both the merchant (retailer) and the company that issues their card. They both have an equal liability if anything goes wrong so the consumer can take action against either of them to get compensation.
This is restricted to goods or services purchased for more than £100, but is extremely beneficial if something should go wrong with your transaction e.g. the retailer goes bankrupt!
The CCA covers everyone with a credit card, but given that prepaid cards do not fall under the CCA, as the bank is not lending money, you are not covered.
Very few prepaid card providers offer this kind of protection. This is also not very important to you if you only intend on using your prepaid card for sharing money with family abroad.
Most of the larger well established prepaid card suppliers undertake fraud liability and will actually provide online fraud protection for the cards, so that you are covered in the eventuality of internet fraud occurring.
Another form of purchase protection is that of damage occurring to the goods. Some cards offer a degree of protection to the consumer, effectively covering the purchases whilst in transit or around the home, for a limited amount of time. This varies from card to card though
Visit out prepaid card comparison section to review and compare prepaid cards to suit your needs.
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