Credit Card - Section 75 cover private sales

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mcclunyboy
mcclunyboy Posts: 16 Forumite
in Credit cards
Hi,

I am considering using my credit card to buy a product from an individual (not a company and if I can - I assume it will cost more but I am prepared to pay the extra interest as it's only for a short-term).

Anyway does the Section 75 cover this sort of transaction?
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  • lynz68
    lynz68 Posts: 323 Forumite
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    Your seller would have to accept credit cards as method of payment which I doubt a private individual would do.
  • InsideInsurance
    InsideInsurance Posts: 22,460 Forumite
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    mcclunyboy wrote: »
    Hi,

    I am considering using my credit card to buy a product from an individual (not a company and if I can - I assume it will cost more but I am prepared to pay the extra interest as it's only for a short-term).

    Anyway does the Section 75 cover this sort of transaction?

    Yes, as long as you pay them directly with the credit card and dont go via a third party like PayPal (or use a CC cheque)

    In reality a private individual who isnt a Sole Trader isnt going to have the ability to accept a credit card directly and so its academic
  • eddddy
    eddddy Posts: 16,440 Forumite
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    As lynz68 says, only businesses can have merchant accounts and therefore accept CCs.

    If you're planning on paying by PayPal, you won't have section 75 protection, but you may have some form of PayPal Buyer Protection. But check PayPal's t&cs for details and exclusions.


    In general, if you buy from a private individual who misrepresents something or breaches the contract, the main option you have for redress is making a claim against them (in the small claims court, if it's under £10,000),
  • pacontracting
    pacontracting Posts: 96 Forumite
    edited 2 September 2014 at 9:58AM
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    eddddy wrote: »
    As lynz68 says, only businesses can have merchant accounts and therefore accept CCs.

    If you're planning on paying by PayPal, you won't have section 75 protection, but you may have some form of PayPal Buyer Protection. But check PayPal's t&cs for details and exclusions.


    In general, if you buy from a private individual who misrepresents something or breaches the contract, the main option you have for redress is making a claim against them (in the small claims court, if it's under £10,000),

    There are now companies like iZettle / PayPal Here etc, that sell credit / debit card readers to individuals ( they connect to your phone). It's not clear, in this model, what your rights are with regard to S75. This is especially muddy with iZettle as both Mastercard and American Express are investors in the company.
  • pvt
    pvt Posts: 1,433 Forumite
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    iZettle's terms and conditions make it absolutely clear within the first few paragraphs that they are providing a payment service (i.e. the same thing as PayPal) and operate under Swedish law and regulatory authorities.

    IMHO you would not be covered by S75 if you paid in this way.
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  • chattychappy
    chattychappy Posts: 7,302 Forumite
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    pvt wrote: »
    ... and operate under Swedish law and regulatory authorities.

    That part wouldn't matter as far as S75 goes, assuming you're paying with a UK CC (unless I missing something...)
    pvt wrote: »
    IMHO you would not be covered by S75 if you paid in this way.

    Yep, until we get a court ruling to the contrary (or something from the FOS or a change of law), CCs are unlikely to pay out. My personal view is that there are legal arguments both way. In time, I expect the FCA will come to regard it as "unfair" that consumers are expected to know the subtle differences between merchants that trade via Paypal/iZettle etc., and those that use traditional methods. Or to put it another way, why should nasty banks get off the hook through exploiting some "loophole" in the law!!
  • jonesMUFCforever
    jonesMUFCforever Posts: 28,898 Forumite
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    ..........You pay cash - no comeback............you pay by cheque no comeback..........you make the bank transfer no comeback ....why should the nasty banks pay out if you make the same mistake using their card?
  • chattychappy
    chattychappy Posts: 7,302 Forumite
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    jonesMUFCforever wrote: »
    ..........You pay cash - no comeback............you pay by cheque no comeback..........you make the bank transfer no comeback ....why should the nasty banks pay out if you make the same mistake using their card?

    Does the "shouldness" matter? The law is the law, stupid as it might be...
  • pvt
    pvt Posts: 1,433 Forumite
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    jonesMUFCforever wrote: »
    . ....why should the nasty banks pay out if you make the same mistake using their card?

    Because they are facilitating the transaction, and owe a duty of care that the transaction is bona fide. S75 does not cover people's 'mistakes', it covers fraudulent transactions, transactions with companies that take your money then mysteriously go to the wall, or where companies are taken to court, lose, and never pay judgements.

    If you dig back into history before S75, you find the murky practices that lead to its introduction - things like shady kitchen and double glazing companies that "provided finance" and then did a sub-standard job or no job at all. Victims would get no kitchen or windows, but still be chased by a finance company to get the 'loan' back. The solution was simple, make the finance company equally liable, and thus ensure they vet the companies first. It's a wonderful piece of legislation.

    That said, it is always disappointing to see how many people think it should cover "buyer's regret".

    As for the Swedish bit - I agree that does not affect the payer's S75 rights, but it probably does have a bearing on the vendor who's using it, and their rights to challenge chargebacks etc.
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  • pacontracting
    pacontracting Posts: 96 Forumite
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    I'd like to understand the point of law that prevents you claiming against PayPal / IZettle.

    The first point I can see is that S75 doesn't apply to non-commercial transactions (paragraph 3 of S75). Fair enough. If you are buying on ebay from a non-commercial person, you won't be covered.

    I can also see that if you are using PayPal to top up your PayPal balance, then use the balance to pay the seller, there is a break in the chain.

    However, if the seller is commercial (perhaps has a commercial account with PayPal / iZettle), and the seller is using these companies as a way to accept Credit Cards (so PayPal / iZettle are the payment processor) then surely the chain is now intact and you are covered by S75?

    Perhaps it needs a test case - although I can imagine most banks wouldn't want this as it might open the flood gates to people who have been fobbed off in the past.
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