* My electric razor packed up when I was on holiday in France and I
was forced to buy another one. Unfortunately there is something wrong
with it and it does not work properly. I understand I can demand from
the credit company whose card I used a refund when a product bought with
a card is faulty. But does this work, when it has been bought abroad?
How should I go about this? The razor was bought at a Casino
supermarket.
* Credit card companies are legally obliged to provide compensation if
a product bought in the UK with their card is faulty. The companies have
always insisted that they have no liability if the purchase was made
outside the UK. However there is doubt over whether this would stand up
in the courts.
A few months ago the Director-General of Fair Trading argued that the
law does extend the liability to purchases overseas. This is only his
opinion and the companies do not have to abide by it. In the past the
companies have found that county courts have agreed with their point of
view but they cannot establish precedence. A case has yet to be brought
before the High Court to provide a definitive ruling.
The companies resent that they should have any liability at all and
they would much prefer that the cardholder should have to exhaust all
possibilities of recourse from the retailer before looking to the card
issuer for recompense. However in your particular case all this is
rather academic.
Just because you reside in a different country there is no reason why
the retailer will not supply you with a replacement razor. Casino is one
of the largest supermarket groups in France and if you send the razor
back explaining that it does not work they should supply a replacement.
Make sure it is suitably packaged with the receipt enclosed (keep a
copy) and sent preferably with a Post Office advice of receipt form.
* Now that Guinness has lost its premier rating as a company we are in
a quandary as to how to balance our family share portfolio which
consists of 4800 Guinness; 1000 Foreign and Colonial Investment Trust;
1700 British Assets; 400 Murray Smaller Markets; 100 Second Alliance;
2000 Scottish Mortgage; 4500 Mercury European Privatisation; 1800
Abtrust Emerging Markets; 1800 TR Pacific; 2250 BT3; 1400 Babcock; 500
Devro; 500 Stagecoach; and 400 Scottish Power.
The Guinness shares arise from profit-share and share save with 2600
recently maturing and the remainder doing so over the next five years.
Your advice would be appreciated.
* We think you are a bit hard on Guinness. In one sense all shares
have lost their premium rating in the last six months as the stock
market has reacted to the rise in US interest rates and fears that the
UK will follow. Fortunately both Guinness and the market appear to have
moved off their recent lows.
One leading City stockbroker, BZW, rates Guinness a buy and says it is
more dangerous to be underweight in the stock now than overweight.
Profits are forecast to recover well this year to #926m from #702m and
then rise to #1050m with good dividend increases in the pipeline.
Your problem is that in relation to your other investments you are
seriously overweight in Guinness. Taking your full exposure to the
company your holding would be worth over #21,000 out of a total of just
under #50,000.
This is not an uncommon situation when the company is also your
employer. In view of Guinness's good prospects you should continue with
the share save scheme which will yield 2200 shares over the next five
years.
Meantime you might consider halving the holding of 2600 to which you
have full entitlement. This would still leave you with a reasonable
holding worth nearly #6000 before taking account of future entitlements.
As these mature you might make further sales and use the proceeds to
diversify your portfolio.
You also have a sizable holding of BT3 which has not done well because
of regulatory fears. You should consider reducing this holding by half.
Reducing your Guinness and BT holdings should generate proceeds of
nearly #9000. Normally we would suggest that you asks the stockbroker
who executes the sales for you to recommend two or three fresh
investments to broaden your portfolio.
But you have built up such an attractive portfolio of investment trust
shares that we are tempted to suggest that you use the funds to add to
these. Currently your Scottish Mortgage and Mercury European are more
than double the size of your other investment trusts, and this strategy
would enable you to balance things up a bit.
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