Nochex and Cash Advance Fee for Credit Card Payment

Merv_Pumpkinhead

Just to let you all know, I have been charged £2.50 cash advance fee for a payment made on my Marbles Mastercard via Nochex.

The credit card company claim that a Nochex payment is the same as a cash advance, hence the fee.

Given that I only paid £14 for the item, this is a pretty big deal.

Nochex do not mention this in their standard information (although it is in their forums as an issue that has occured before).

On the call to the credit card company, every time they told me this was a standard charge for a nochex payment, I told them that I was not happy about it. After the fifth time, the lady in the Indian call centre offered to refund the £2.50.

Be warned, and if it happens to you - complain:mad:

soolin

There is quite a lengthy thread about it on the nochex complaints forum here:

http://greenroom.nochex.com/showthread.php?t=6147

As a buyer nochex is not as safe as paypal as they do not offer the same buyer protection, so bear that in mind when looking at payment methods on ebay.

Soo

doingwhatican

From my understanding of it, when a purchase is made against your credit card the purchase has a code assigned to it for the type of transaction. For example if you use your credit card via nochex or paypal to fund a deposit into a betting account then the tranaction is given a quasi cash type of code, so that the credit card company know what type of transaction it was and subsequently know how to deal with it, whereas if you use your credit card in a store it is given a different transaction code. I am wondering if nochex are giving the correct type of transaction code to the credit card company.
I got hit with this when I did a free £10 deal with a betting thing that was advertised on MSE a while ago. I funded the deposit via credit card through paypal, as for once I did not have any funds in the paypal account. I was not aware, until I got my credit card statement, that I had been charged a cash handling fee for this transaction of £2.50. Needless to say I was not pleased, as my profit had only ended up being £7.50 :-)
I did contact the credit card company but they told me that the transaction was for a betting deposit, they knew the type of transaction I had done.

soolin

If you read the nochex forum it appears that nochex do take the money and then pay out to the seller, this is a way to try and protect the seller against a credit card chargeback. If the system works like that, and even with nochex it varies, then the seller gets protection, but the buyer gets none as he has not paid for goods so cannot claim for non receipt.

Paypal work differently in that the buyer pays the seller for goods, so a chargeback can be done.

However different credit cards appear to be treating nochex in different ways, so it may be worth checking against the comments on the nochex forum about your specific card before using it.

Soo

doingwhatican

Soo, I thought that the nochex and paypal models were the same. The transaction from your credit card is done either by nochex or paypal. They then send the 'emoney' to the seller. I would imagine that nochex are just as open to chargebacks as paypal are now that they also accept credit card funding. Nochex used to only be used via a bank account which made it more difficult for a chargeback to be done, which in turn made it safer for sellers to use. But they now accept credit cards so I wonder if they will be getting more chargebacks. The thing with paypal is that they pass the chargeback onto the person who accepted the 'emoney' funds.
If you have a case of non reciept of goods, a chargeback can be done if a credit card was used regardless of who was used to pay, i.e nochex, paypal or a store, mail order etc.

soolin

The models are slightly different but confused by the fact that nochex can be inconsistent. Anyone who pays for goods via a credit card can chargeback if those items do not arrive, however sometimes nochex and the credit card company take the cash as an advance, in which case a chargeback cannot be done.

Reading the nochex threads the way nochex/cc companies deal with these payments is not consistent, so in some cases people are suffering a cash advance fee and therefore losing the right to chargeback, whilst some with the same card are not. Of course it does follow that if you are being charged a cash withdrawal fee then you lose any protection as it would be just the same as drawing cash from an ATM and going next door to buy something, the two transactions are not linked in the eyes of the credit card company. Paypal are consistent in that they always deem the transaction as direct from buyer to seller for goods so why nochex are having problems I do not know.

However nochex are aware of the ongoing problems and apparently now warn buyers with a message before going ahead to pay that says "GM, Marbles & Morgan Stanley may charge you a cash handling fee when using your MasterCard to fund this payment".

JohalaReewi

soolin wrote:

...
Paypal work differently in that the buyer pays the seller for goods, so a chargeback can be done.

...
Soo

The seller does not have a merchant account with a CC company and so cannot directly accept credit card payments so the buyer cannot directly pay the seller using a credit card. Paypal take your credit card payment and pass the funds it to the seller (and take their fees) just like NoChex do.

One way Paypal works differently is that on your CC statement, Paypal show you something which will identify the seller. Nochex just say Nochex. Also Paypal operate their own in-house 'buyer protection' and 'seller protection' schemes.