Chargeback and Section 75

MattHerbison

I am thinking of purchasing a car long distance as the particular car is the exact specification I want and is rare.

The cost will be £11500 and the dealer will deliver the car to me

However, the dealer wants full payment in advance of them setting off on the 200 mile delivery journey. They said this is okay by BACS or card over the phone

Although this dealer is a main franchise and is highly reputable, I am worried about handing over such money before delivery of the car (or ever even setting eyes on it in person)

I am therefore wondering about my bank's protection if something were to go wrong.

Would I be correct in assuming:
1. Chargeback is a rule (although not a legality) on all debit cards from the issuer (Visa) that money may be recoverable from the merchant's bank in a certain situation

2. If I were to use a credit card, I would be covered by Section 75 which IS a legal requirement making my bank and the merchant jointly responsible for the transaction. Meaning I could easily recover money if the car didn't arrive or wasn't as specified

3. There's no protection for a BACS transfer

Does anyone have any experience or advice regarding this?

shaun_from_Africa

Your 3 points are pretty much spot on, but there is one thing to bear in mind regarding point No 2.
You would be covered by S75 but only providing that the payment goes directly to the sellers account. Some businesses use a 3rd party payment provider and if you pay through this you are breaking the credit supplier-seller-buyer chain and S75 no longer applies.

Is the seller willing to let you pay the full amount on a credit card without any extra charges?
If so and providing the payment goes straight to the sellers account, this would be the best way to pay as it gives you S75 protection as well as a time whilst you have the money in your bank account (possibly earning interest) before having to pay your card bill.

If the dealer is charging you a % of the cost for paying by credit card, then it would be worth seeing if you could pay a small sum with your card and the rest by bank transfer.
This still ensures that you have S75 protection.

Fosterdog

Have you considered what you would do if things did go wrong with the car? Being 200 miles from the dealer will make it difficult to get a remedy, unless being a franchise of main dealer you can go back to a local branch. I know that's why you are asking about chargeback and S75 but once acceptance occurs if something goes wrong you are only entitled to a remedy and not necessarily a refund.

If they regularly deal with sales over the phone then it would also be covered by DSR if you change your mind but there is no fault but you may be responsible for paying the return costs.

InsideInsurance

MattHerbison wrote: »

1. Chargeback is a rule (although not a legality) on all debit cards from the issuer (Visa) that money may be recoverable from the merchant's bank in a certain situation

2. If I were to use a credit card, I would be covered by Section 75 which IS a legal requirement making my bank and the merchant jointly responsible for the transaction. Meaning I could easily recover money if the car didn't arrive or wasn't as specified

3. There's no protection for a BACS transfer

1) Chargeback is a rule not a legality on all cards not just debit cards. Visa is not a card issuer, its only a network. RBS, Lloyds, Capital One etc are card issuers

2) Is correct up until the last sentence. As they are jointly liable you can attempt to get your money back from either merchant or card issuer if the car didnt arrive. That doesnt mean its easy and some banks defend much harder than merchants. The true advantage of this is if the merchant goes bust such that there is only the bank to pursue rather than no one.

3) There is no banking protection but of cause you can still sue the merchant