Members of the public using a prepaid Mastercard for online transactions are not covered by the standard credit and debit card laws UK payments association, APACS, has warned.

The warning follows the launch of the IDT Prime card, a disposable prepaid Mastercard that claims to stop the risks of ID fraud because it is not linked to any bank accounts. It also doesn’t require any registration of personal information.

In addition any loses are limited to the value on the card which can be loaded with a value between £10 and £150.

However, Jemma Smith, spokeswoman for APACS warned customers that these prepaid cards do not come with the protection of standard cards.

“The point about these cards is that they are a niche product and will not appeal to everyone,” she said.

“They may be of use to those who don’t own a credit or debit card, for example young people, and anyone particularly concerned about their online safety but it is important to remember that these are like cash.”

“Therefore, as stated by the Banking Code of practice they will not offer the protection people get with debit and credit cards.

“They are not covered by the Consumer Credit Act and people should consider this when buying goods of value,” she added.

Under section 75 of the Consumer Credit Act a credit card company must pay back a customer for any losses or repairs to goods that cost over £100 and do not exceed £30,000.

Credit card companies must also foot the bill if foreign transactions go wrong.