Section 75 protection for investments?

SillyMoneyMan

Hi, Everybody!

I stumbled upon a website which offers products (basically an investment, but not sold as such as no financial advice is given), which returns a small amount of money each week/month/year depending on what you buy, getting a return a little higher than i'd get from my current portfolio. This is attractive as i'm saving for a house deposit and an extra couple of percent over a year or so would help!

I know the old adage: "If it sounds too good to be true, it probably is". However, they accept payment for their products on credit cards.

I'm wondering, would i be protected if this is essentially a Ponzi/Other scam and they went out of business (or just took the money)? The quantity of money is fairly large (~10K) and the company is an EU company.

I don't want to lose my money, but i also don't want to pass up a potential opportunity if I'm protected against losses. I know i'm probably wasting my time looking into it, but i figured i'd ask the gurus on here just in case!

Many thanks!

grumbler

IMO, most likely this will be treated like a cash advance (with all the consequences) and won't be covered.

antrobus

Possibly yes; see Malouf v MBNA - claimant was conned out of some money in a landbanking scam, she paid the deposit on her credit card, MBNA held to be liable for her full losses.

But even so, that would only cover your initial investment, you would still lose the returns that you would have made.

Best advice: properly check out the website first, before parting with your money. (Malouf v MBNA might get reversed on appeal, some other case might come along and blow the decision out of the water, you might not quite meet the technical requirements)

Best best advice: tell us which website it is, and someone will come along and give you the lowdown.

SillyMoneyMan

The website is cointellect.com ... basically, they sell computing power which is used to mine cryptocurrency. I've mined cryptocurrency before and the returns they're showing are realistic for this venture. I.e. I can go and buy the hardware myself (for a large premium) and get the returns shown relatively easily.

However, in my head it screams Ponzi. I'd never usually risk my money, but knowing that it's possible, my brain trys to (un-rationally) rationalize it. If i knew i was protected against my initial investment, then i'd give it a shot!

antrobus

grumbler wrote: »

IMO, most likely this will be treated like a cash advance (with all the consequences) and won't be covered.

Actually that's an interesting point.

If the CC knew that the company operating the website was flogging investments, it would indeed regard any charge from that merchant as a cash advance, and charge accordingly. So if you made an 'investment' using your credit card, and weren't charged a cash advance fee, then it would most likely be a scam.

I think the way it worked in Malouf v MBNA, was that the scamster had two companies; one was the landbanking company, one was something else that purported to be a retailer and therefore operated as a CC merchant and could conveniently process the deposit on behalf of its sister company.

antrobus

SillyMoneyMan wrote: »

The website is cointellect.com ... ...

I found this:

Is CoIntellect a Scam?
http://cointelegraph.com/news/112424/is-cointellect-a-scam

Not that I'm pretending to understand any of this techie-crypto-stuff.

SillyMoneyMan

I've read that, however, i have a lot of contacts who have made money and been paid promptly (and a couple who had to send a few emails). Hence my confusion!

Maybe i'll check if paypal offers any protection as they accept that too.

They are atleast semi-legitimate as i'm using my current hardware to mine and currently can withdraw my money. However, Ponzis typically do this at the start to lure people in.

Ahhh, too many variables!

chattychappy

In my opinion, whether or not the CC treats it as a cash advance is beside the point, unless it is clear to you at the time of the transaction that you are taking a cash advance. Even then, I think S75 would still engage if in fact you never see the cash and the merchant is using the funds for the investment.

Bear in mind that S75 applies where the "item price" is £100 or more. Buy 100 tables for £50 each, you are not covered despite spending £5000 in a single transaction. Depending how the investment works, this is something that you could trip up on.

It goes without saying, there must be a misrepresentation/breach of contract for the CC to be on the hook.

vns

SillyMoneyMan wrote: »

I've read that, however, i have a lot of contacts who have made money and been paid promptly (and a couple who had to send a few emails). Hence my confusion!

Maybe i'll check if paypal offers any protection as they accept that too.

They are atleast semi-legitimate as i'm using my current hardware to mine and currently can withdraw my money. However, Ponzis typically do this at the start to lure people in.

Ahhh, too many variables!

remember, s75 won't cover you if you're going via PayPal!
Not sure if that's how this coin site works or not.