Transferwise - chargeback or section 75

dangermouse007_2 · 30 June 2017 at 6:22PM

I have an item that has been delivered faulty from a merchant in France and paid them direct to their bank account through Transferwise using my credit card. I have contacted them to no avail and they don't even acknowledge my emails. Given that I've used Transferwise to make the payment, albeit using a credit card, can I claim the money back using a chargeback or a section 75 claim? Thanks in advance for any help.

eDicky · 30 June 2017 at 7:09PM

TransferWise delivered the service that you paid for with your credit card, so you have no claim there. Why did you use TransferWise, were you unable to pay the merchant directly with your card?

dangermouse007_2 · 30 June 2017 at 7:24PM

I could not pay the merchant directly. they asked for a bank transfer which I used tranferwise for. Is a chargeback or section 75 claim not valid when using transferwise?

Chapuys · 30 June 2017 at 7:47PM

dangermouse007 wrote: »

I could not pay the merchant directly. they asked for a bank transfer which I used tranferwise for. Is a chargeback or section 75 claim not valid when using transferwise?

Section 75 kicks in only if there is a "direct relationship" between a product (your purchase) and the debt (the payment on your card).

It does not apply to so-called "indirect relationships". This means that if you make a payment through an agency, then the direct relationship is broken and Section 75 won't apply.

A card machine in a shop (or a card payment online) preserves the direct relationship, since the retailer gets paid immediately.

With a company such as Transferwise, however, it is different: you pay Transferwise and then Transferwise pays your retailer .

In other words, Transferwise acts as a middleman (an agency) and the direct relationship is broken; Section 75 can't apply.

*Copied from the unlockthelaw.co.uk website, amended with transferwise.

dj1471 · 30 June 2017 at 7:50PM

Assuming Transferwise made the payment you have no grounds for a chargeback or S75.

This is one for the EU Small Claims process:
http://europa.eu/youreurope/business/sell-abroad/resolving-disputes/small-claims/index_en.htm

SnowTiger · 30 June 2017 at 7:53PM

dangermouse007 wrote: »

I could not pay the merchant directly. they asked for a bank transfer which I used tranferwise for. Is a chargeback or section 75 claim not valid when using transferwise?

You can't use Section 75:

If there's a third-party payment processor, Section 75 may NOT apply

Some shoppers are finding credit card firms are rejecting Section 75 claims because the retailer they bought from used a third-party payment-processing firm to collect their payment – and there's widespread confusion about how these rules apply.

Technically there must be a direct link between the debtor (that's you, the customer), the creditor (the credit card company – eg, American Express, Lloyds, Barclaycard) and the supplier (the retailer selling you the goods or service).

If that relationship is deemed to be broken by the involvement of an intermediary or third party, Section 75 protection WON'T apply. Unfortunately though, even the Financial Ombudsman Service – which arbitrates Section 75 disputes – is unable to provide clear guidance on when this happens, leaving shoppers in the dark.

As for Chargeback, Transferwise include this in the T&Cs:

11.4 Chargebacks on your payment instrument. If you selected a Payin Method which gives you chargeback rights (for example in relation to your credit card, you may ask your card provider to reverse a transaction on your card), you promise that you will only exercise this chargeback right if:

(a) we have breach this Agreement; or

(b) there was an unauthorised use of your payment instrument.
You promise that you will not exercise your chargeback right for reasons which we are not responsible, including a dispute with your recipient or there is insufficient funds in your payment instrument. If we need to investigate or take any actions in connection with a chargeback raised by you, we may charge you for our costs in doing so and may deduct such amount from your TransferWise Account.

That statement may not absolve Transferwise from Visa and Mastercard rules. However, as Transferwise provided the service you paid them for, I think Chargeback is unlikely to be successful.

Having said that, Chargeback against PayPal, which is also a funds transfer service, do seem to be possible.

eddddy · 30 June 2017 at 7:53PM

Had Transferwise breached their contract with you (e.g. by not paying the money into the merchant's bank account), then you could have made a s75 claim against them. But that's not the problem here.

dangermouse007_2 · 30 June 2017 at 10:14PM

My understanding is that transferwise are like Paypal and you can initiate a chargeback with Paypal.

System · 1 July 2017 at 11:55AM

You seem to to be missing the point

You've essentially paid Transferwise for cash (with your card) and they've sent that cash to the account you instructed them to.

That is where their responsibility starts and ends - they have nothing to do with what that cash is used for.

Chino · 1 July 2017 at 12:08PM

dangermouse007 wrote: »

My understanding is that transferwise are like Paypal and you can initiate a chargeback with Paypal.

Why do you understand that? TransferWise appears to offer an "end to end" service whereby monies are paid directly into the payee's bank account whereas PayPal transfers monies to the payee's PayPal account.

Providing that a TransferWise payee receives the money paid by a payer, I don't understand the grounds by which the payer could open a chargeback dispute with TransferWise.

Harlan2 · 6 February 2018 at 1:09PM

I am now in a similar situation. Op what was the outcome of this please?

Transferwise - chargeback or section 75

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