The new law applies to transactions in euros and the protections are for the benefit of consumers.  Transactions carried out through agencies, or for the purchase of foreign currency bank notes say from a bureau de change, or which are for business or commercial purposes are not protected.

In the past each bank or credit card issuer has been able to set its own rules as to what limit they will set to protect card users against fraud or misuse of their cards.  The new law sets €150.00 as the maximum amount that a card-holder will be responsible for if their card is used fraudulently.  However, the card-holder must report any misuse of their card as soon as possible and at the latest within 12 weeks from the date any suspicious charge has been debited from their account.

The new law also extends to eight weeks the period within which a consumer can query or recall a payment taken by direct debit from their bank account.   

In these days of internet shopping it can be easy to make mistakes when completing payment details on-line.  If the error has been made by the consumer, the bank or card-issuer is not responsible for the failed transaction, although Article 44 of the new law requires that they make reasonable efforts to assist you to recover any money that has been paid to the wrong person.  

An important extension of consumer protects is contained in Article 45 of the new law.  This imposes on banks and card-issuers the obligation to promptly reimburse consumers with the cost of goods or services which have either not been supplied, or which are defective in some way.   In addition, Article 46 requires the bank or card-issuer the duty to reimburse the consumer for any interest charged and any additional expenses which the consumer has incurred as a result of the failure to provide the goods or services properly or at all.   However, Article 48 relieves the banks and card-issuers of any responsibility where the failure to provide the goods or services is beyond the control of the supplier, for example in the event of strikes or bad weather.

For businesses that accept payment by card as well as cash, particularly those that deal in relatively small transactions, they now have the right to charge their customers a supplement for accepting payment by card.  This move has been welcomed by the business associations as the fees charged in Spain to businesses for accepting payment by card can be triple the European Union average.

While this range of new consumer protection is to be welcomed it may come at the price of higher annual charges by the banks for the issue of our plastic and increased interest rates as they attempt to offset the cost of their new responsibilities.