Warning! Don’t use PayPal to pay on a credit card

k18dan

Ok, So I recently bought a item on eBay, when I went to pay it said;

Pay by paypal
or
Pay by card

I chose pay by card, I noticed it used paypal to do the transaction anyway - However I was not asked to log into my paypal account

Would this be covered by section 75?

grumbler

The last time I paid without logging into my PP account, and the transaction still shows in my CC statement as

PAYPAL *GEARBEST ....

So, don't expect smooth sailing with s75...

Patr100

k18dan wrote: »

Ok, So I recently bought a item on eBay, when I went to pay it said;

Pay by paypal
or
Pay by card

I chose pay by card, I noticed it used paypal to do the transaction anyway - However I was not asked to log into my paypal account

Would this be covered by section 75?

No, PayPal are still providing the payment service.

grumbler

Patr100 wrote: »

No, PayPal are still providing the payment service.

So are Visa, Mastercard and Amex.
So is Sage on the next level.

Patr100

grumbler wrote: »

So are Visa, Mastercard and Amex.
So is Sage on the next level.

Are they covered by Section 75 protection?
That was the question asked.

grumbler

Who 'they'?
Visa, Mastercard and Amex certainly are.
Sage - possibly. Read the thread.
Paypal - most likely not. Read the article.

Don't expect to find any sensible explanation. S75 is a nonsensical loophole exploited by customers. Similarly, CC providers exploit every possible excuse for evading responsibility.

zzzzz

When i was using paypal , faced same problem.

GraceCourt

grumbler wrote: »

So are Visa, Mastercard and Amex.
So is Sage on the next level.

Visa, Mastercard, and Amex are multinational and international brands used by companies that provide payments services to card issuers.

Banks and other finance companies are card issuers, an activity that is, in the UK, a regulated activity - regulated by the Financial Conduct Authority, and where the cards are issued and used in the UK, transactions involving a payment to a merchant accepting payments using those cards are protected by Section 75 Consumer Crdit Act 1974, because the card issuer becomes a joint party to the contract of sale.

Sage is a payment processor, processing transactions for merchants, and is not involved legally in any way with the consumer's transaction. They are providing services only to the merchant.

And, as was made clear in this thread, Paypal is not a merchant but is a financial institution that moved out of the UK a number of years ago to avoid regulation, and no longer has a UK corporate presence that is in any way connected with the contract of sale. Paypal provides a payment forwarding service for the consumer, it is not a payment processor, and thereby is not a party to any contract of sale, and Section 75 does not apply to such payments by credit card.

If you have any claim against them, you will need to use the European Small Claims procedure by complying with Part 78 of the Civil procedure Rules 1998 as amended. And, if your claim relates to the failure of the seller to fulfil their legal obligations in any way in respect of a purchase made by credit or debit card, and Paypal has forwarded that payment to the seller - which is all you are contracting with them for them to do - you will lose.

Quod Erat Demonstrandum.

samwardill

GraceCourt wrote: »

Visa, Mastercard, and Amex are multinational and international brands used by companies that provide payments services to card issuers.

Banks and other finance companies are card issuers, an activity that is, in the UK, a regulated activity - regulated by the Financial Conduct Authority, and where the cards are issued and used in the UK, transactions involving a payment to a merchant accepting payments using those cards are protected by Section 75 Consumer Crdit Act 1974, because the card issuer becomes a joint party to the contract of sale.

Sage is a payment processor, processing transactions for merchants, and is not involved legally in any way with the consumer's transaction. They are providing services only to the merchant.

And, as was made clear in this thread, Paypal is not a merchant but is a financial institution that moved out of the UK a number of years ago to avoid regulation, and no longer has a UK corporate presence that is in any way connected with the contract of sale. Paypal provides a payment forwarding service for the consumer, it is not a payment processor, and thereby is not a party to any contract of sale, and Section 75 does not apply to such payments by credit card.

If you have any claim against them, you will need to use the European Small Claims procedure by complying with Part 78 of the Civil procedure Rules 1998 as amended. And, if your claim relates to the failure of the seller to fulfil their legal obligations in any way in respect of a purchase made by credit or debit card, and Paypal has forwarded that payment to the seller - which is all you are contracting with them for them to do - you will lose.

Quod Erat Demonstrandum.

QED my foot. It is not true at all that you don't have section 75 protection in this case. Maybe you don't have it against PayPal (just as you don't claim against Sage or worldpay) but you are still protected.

grumbler

GraceCourt wrote: »

Visa, Mastercard, and Amex are multinational and international brands used by companies that provide payments services to card issuers.

And? Paypall provides the services too. Internationally, but to merchants. Does s75 say anything about this difference?

Banks and other finance companies are card issuers, an activity that is, in the UK, a regulated activity - regulated by the Financial Conduct Authority, and where the cards are issued and used in the UK, transactions involving a payment to a merchant accepting payments using those cards are protected by Section 75 Consumer Crdit Act 1974, because the card issuer becomes a joint party to the contract of sale.

What does FCA regulation have to do with s75?

Sage is a payment processor, processing transactions for merchants, and is not involved legally in any way with the consumer's transaction. They are providing services only to the merchant.

Yes. So does PP.

And, as was made clear in this thread, Paypal is not a merchant but is a financial institution that moved out of the UK a number of years ago to avoid regulation, and no longer has a UK corporate presence that is in any way connected with the contract of sale.

How is this different from Visa/MC/Amex?

Paypal provides a payment forwarding service for the consumer,

No, it provides service to the merchant. A customer doesn't even have to have an account with PP.

If you have any claim against them, you will need to use the European Small Claims procedure by complying with Part 78 of the Civil procedure Rules 1998 as amended.

Anything wrong with UK SCC if the merchant is in UK? However, this thread is about a claim against the CC provider, not PP.

Quod Erat Demonstrandum.

:rotfl:

As said many times you are trying to make too much sense from a nonsensical (if applied to CCs) s75.

Don't look for a black cat in a dark room, especially if it's not there.

Even MSE are more cautious than you in their statement:

Does PayPal ever work for Section 75?

There could be circumstances where the necessary relationship may exist. For example, larger retailers may use it as a “merchant acquiring service”, which means it acts as a traditional payment processor. Yet, it's very difficult to tell – so to be on the safe side, assume not.
If you’re going to get really nerdy on this (ignore this bit if you don’t want nerd-dom), it’s worth noting there are some court rulings which can be read as contradicting the Ombudsman’s view. In other words, that Section 75 does apply to PayPal.
Yet to push that you’d need to go to court. While there's a chance a card firm may just pay out if you did take it to the small claims court, equally true is it may decide to fight it all the way, which could be time consuming and potentially costly.
As the Ombudsman route is easier (and allows you to go to court after if you don’t like what it says, but it doesn’t work the other way round) my preference is to stick with it – which means following its interpretation, which is pretty clear that in most cases it won’t uphold Section 75 claims via PayPal.