Is Using PayPal Safer than Credit Cards ?

IsPaypalSafer

Hi,

I am in dispute with another party, over whether using PayPal is safer than using a credit card.

One of us holds that PayPal is safer because:
a) You don't have to reveal your credit card details
b) PayPal now offers buyer protection for items purchased

Whilst the other of us holds that PayPal cannot be safer because:
1) With the introduction of Chip and Pin and 'Verified by Visa' and like password requirements for online credit card purchases, using a credit card is no more risky than using PayPal. Both PayPal and a credit card are now protected by a Password, and both cannot be compromised without knowing that secret password (whether Pin, Password or Verified-by-Visa like response).
2) Nowadays, revealing your credit card number to a malicious party should not cause you any financial loss, because of the introduction on 1 November 2009 of the Payment Services Regulations 2009. These mean that you are not legally liable for any fraud incurred on your credit card account as long as you have not revealed your pin or passwords or been grossly negligent. So revealing just the credit card number, name, expiry and 3 digit security number on the back cannot cause you liability, even if these details do fall into malicious hands.
3) When you use PayPal to buy an item or service, you lose the ability to claim and be protected under Section 75 of the Consumer Credit Act, which you are granted when using a credit card. This can be a significant loss and actually makes you less safe when using PayPal in some circumstances. PayPal buyer protection does not cover you for purchase of services, tickets, and many other exclusions, and where it does operate it does not always offer as high a level of protection as Section 75 of the Consumer Credit Act.

Please note the dispute is not which is safer, credit cards or PayPal. The dispute is ‘Is PayPal safer than credit cards’ – ie PayPal has to be provably safer than using a credit card.

We need evidence to settle this dispute, and I would like some assistance in locating evidence. The dispute has real-life consequences, so I would appreciate any assistance.

Can someone please help ?

Mark_Hewitt

With credit cards there's a well defined procedure for disputes. With paypal, you have to email them and have them ignore you.

shaun_from_Africa

I don't think that there is a definitive answer as some people will have bad experiences with paypal, and others with credit cards.
There are good and bad points for both of them.

These mean that you are not legally liable for any fraud incurred on your credit card account as long as you have not revealed your pin or passwords or been grossly negligent

There have been a fair few cases involving credit cards (normally overseas), where people paying for the goods haven't noticed that the decimal point was in the wrong place & have ended up paying 10X or even 100X the intended amount. Not gross negligence, simply an oversight but the card holder will still lose out as they had approved the purchase.

Even though you shouldn't lose out if your card details fall into the wrong hands, it can still take many months and lots of stress to get it sorted out.

Paypal also has its disadvantages. Even though there is buyer protection, it is the buyer who has to prove that the goods in question are faulty or not as described, (can be difficult and expensive), and then they may be required to pay to return the goods to the seller (again, could be very expensive).


Personally, I think the advantages of a credit card outweigh those of Paypal especially as you have the legal backing of Section 75, whereas the Paypal buyer protection is a voluntary policy that they offer which can be ammended at any time and is heavily biased to save them as much money as possible.
The wording and requirements of Sect 75 are totally independant of the credit card companies and this bit of legislation is now well known and understood by all consumer advice groups, CAB, etc.

shaun_from_Africa

I think you left one bit out Mark

With paypal, you have to email them, get an automated response, and then have them ignore you.

suburbanwifey

All your points I agree with, he posted this question elsewhere, where I answered him agreeing pretty much that paypal is not safer than credit cards, in any way...Paypal make all the decisions, not the law with regards to refunds/frauds....paypal is a risk. Period.

gordikin

Does s75 only cover you for an amount >£100 though?

shaun_from_Africa

Does s75 only cover you for an amount >£100 though?

Yes, although some credit card companies will help for amounts under this figure.

Hintza

If I'm buying small value items from places I have never heard of I would be much happier using PayPal.

About 3 years ago someone got into my Bank Account via an online Debit Card transaction and made off with £2.5k. Barclays were excellent to be fair and all money was refunded.

Today I have had delivered a couple of bateries and although I went through EBay I could have bought direct and if he hadn't taken PayPal I would probably not have bothered.

IsPaypalSafer

The Advertising Standards Authority (ASA) has today ruled that 'PayPal is safer than credit cards' !!!
In particular, it is fine for PayPal to advertise 'PayPal is Safer'.

See asa.org.uk/Complaints-and-ASA-action/Adjudications/2010/11/Paypal-%28Europe%29/TF_ADJ_49389.aspx

I believe this is a gross error on the part of the ASA (to be fair, I made the complaint, so I would).

I have 13 days to appeal this decision, but can only do so if I can present evidence to demonstrate that the ruling is in error.

Since the ruling is subjective, this is going to be very difficult.
However, the ASA have based their ruling on the fact that since you don't have to reveal your credit card details when using PayPal, therefore PayPal is safer than credit cards.

Can anyone supply evidence that nowadays (with Chip-and-Pin, Verified by Visa and the like, and the Payment Services Regulations 2009), using a credit card is no less safe than using PayPal ?

[I am starting a new thread, so please don't reply to this one]

wealdroam

IsPaypalSafer wrote: »

[I am starting a new thread, so please don't reply to this one]

Why?

The responses here are now 'effectively lost' to people reading the new thread.
Leading to a duplication of effort.

GillsMan7

Yes, starting a new thread is really confusing. Stick to this thread as it's about the same issue IMO.