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samwardill wrote: »QED my foot. It is not true at all that you don't have section 75 protection in this case.
"In this case" - Are you referring to post #142? If so, how do you know that this purchase was for £100 or more? S.75 protection relies on the purchase being for such an amount.samwardill wrote: »Maybe you don't have it against PayPal (just as you don't claim against Sage or worldpay) but you are still protected.
Sigh. Section 75 protection means that the buyer has the same rights against the card issuer as they do against the seller, should this be necessary for whatever reason, and it arises out of the card issuer being a joint party to the contract of sale. If the card transaction is for the transfer of money to PayPal (Europe) S.à r.l. & Cie, S.C.A., as an intermediary, for the onward transmission of that sum to the seller's Paypal account, and PayPal (Europe) S.à r.l. & Cie, S.C.A. does not provide merchant services to the seller, how do you demonstrate - when you are drafting your particulars of claim for your County Court (assuming that you are in England in Wales) claim under Part 27 against the card issuer - how do you demonstrate that the defendant company has any contractual liability from a contract of sale, when the seller doesn't have a merchant services provider contract?
As has been stated a number of times before, Sage and Worldpay are providing merchant services to sellers on behalf of card issuers, and it is from this contractual liability that the card issuer becomes a party to the contract of sale, so you are correct that merchant service providers do not have contractual liability... but crucially, they act on behalf of card issuers to accept funds into merchant accounts held on behalf of sellers, to whom they provide merchant services.
PayPal (Europe) S.à r.l. & Cie, S.C.A. isn't providing merchant services to the seller, so you fall at the first hurdle. It's why the company moved to Luxembourg, because it made a corporate and public decision to do so to avoid regulation by the FSA (as existed at that time - now superceded by the FCA). And that's the whole purpose of this thread - to give publicity to the fact that, popular though it is as a payment services provider (particularly for sums under £100 that aren't protected by S.75 anyway), it does not provide S.75 protection for credit card payments of £100 or more.
After all this time, there has still been no cogent argument, based on statute and legal precedent, that provides a single argument that could be pleaded for consideration by a District Judge to support a claim that S.75 protection exists for a purchase of £100 or more using Paypal. But I still await one with interest...! :rotfl:
Like I said, QED.0 -
Because Section 75, by virtue of Section 12, relies on there being a regulated consumer credit agreement between the debtor and the creditor, and the only relevant such agreement is defined in Section 12(c) as:What does FCA regulation have to do with s75?
...an unrestricted-use credit agreement which is made by the creditor under pre-existing arrangements between himself and a person (the “supplier ”) other than the debtor in the knowledge that the credit is to be used to finance a transaction between the debtor and the supplier.
And as I'm getting tired of pointing out here, a Paypal transaction is not being used to finance a transaction between the debtor and the supplier, it's being used to finance a transaction between the debtor and Paypal. Read the terms and conditions provided by PayPal (Europe) S.à r.l. & Cie, S.C.A. if you can do so without losing the will to live...
No, it doesn't. The supplier enters into a contract with PayPal (Europe) S.à r.l. & Cie, S.C.A. but not a merchant services agreement as far as the card issuers are concerned, and that's why PayPal (Europe) S.à r.l. & Cie, S.C.A. is an intermediary, thus "breaking the (contractual) chain" - read my previous posts.Yes. So does PP.
See last comment!How is this different from Visa/MC/Amex?
I can't continue to respond to your replies if you lack even a basic understanding of contract law. When the buyer makes the Paypal payment, he is contracting with PayPal (Europe) S.à r.l. & Cie, S.C.A. to send that money to the merchant - again, read the terms and conditions next time you make such a payment. Remember always - Paypal is an intermediary, and has quite separate contracts with the buyer and seller, neither of which involve the card issuer. The fact that the buyer doesn't have an account but "checks out as a guest" is irrelevant, because the buyer is still accepting the terms and conditions of a contract with PayPal (Europe) S.à r.l. & Cie, S.C.A. to transfer that money to the seller's Paypal account.No, it provides service to the merchant. A customer doesn't even have to have an account with PP.Anything wrong with UK SCC if the merchant is in UK? However, this thread is about a claim against the CC provider, not PP.
You've partly answered your own point, except that there's no such thing as the "UK SCC" if you meant "UK Small Claims Court". In England and Wales it would be County Court proceedings using Part 27 of the Civil Procedure Rules 1998 (as amended), or - where the defendant is elsewhere in the EU, Part 78 proceedings: Part II of Part 78 refers to the European small claims procedure under Regulation (EC) No 861/2007 of the European Parliament and of the Council of 11 July 2007. In Scotland, application can be made under the Small Claims procedure to a Sheriff Court having jurisdiction to hear the claim for amounts of up to £3,000 - rules for this are set out in the Act of Sederunt (Small Claim Rules) 2002 No. 133.
Now you have lost me completely... Section 75 is all about the liability of a creditor to a debtor for breaches by a supplier under a debtor-creditor-supplier agreement falling within section 12(b) or 12(c) - i.e. credit card agreements! Why would it not be applied to credit cards???As said many times you are trying to make too much sense from a nonsensical (if applied to CCs) s75.
Yes, but MSE doesn't represent litigants in Part 27 proceedings in the County Court... I'm dealing with the reality of consumer law here, not theoretical arguments and wild conjecture. Like I keep saying, if anyone wants to put up a suitable argument for a claim against Paypal in these circumstances, and is willing to commence Part 78 proceedings against PayPal (Europe) S.à r.l. & Cie, S.C.A. in Luxembourg to test their theory, please feel free to do so and then report back here... but I'm not holding my breath.Even MSE are more cautious than you in their statement...
Until then, go right ahead and buy stuff costing over £100 with your credit card using Paypal... just don't complain here if you lose your money and Paypal decides against giving it back to you!0 -
GraceCourt wrote: »
And as I'm getting tired of pointing out here, a Paypal transaction is not being used to finance a transaction between the debtor and the supplier
The credit, whether or not Paypal is involved, is being used to finance a transaction between the debtor and the supplier. This transaction, quite simply, is what the money is being used for. How the money gets to the supplier is irrelevant -- so even if you make a payment by credit card to (for example) Tesco, and Tesco then take some cash out of the till and hand it to the supplier, it is still the transaction between the debtor and supplier which is being financed.GraceCourt wrote: »The supplier enters into a contract with PayPal (Europe) S.à r.l. & Cie, S.C.A. but not a merchant services agreement as far as the card issuers are concerned, and that's why PayPal (Europe) S.à r.l. & Cie, S.C.A. is an intermediary, thus "breaking the (contractual) chain" - read my previous posts.
It doesn't matter whether the contract or contracts in question are styled as a 'merchant services agreement'. It's clear from the case law that it doesn't even matter whether they are contracts at all. What matters, as far as the law is concerned, is that there is either directly or through a chain, an arrangement between the debtor and supplier. The mere fact that a supplier holds itself out as, and is, able and willing to accept a credit-card-funded payment indicates that there must be some sort of arrangement for it to do so, and that that arrangement must involve the card issuer either directly or via a chain of arrangements.
There's no need to invoke the European Small Claims procedure for a UK-issued credit card, as the claim would be against the card issuer -- not against PayPal. And the card issuer's secondary claim under s.75 would also be against the supplier, not against PayPal (although it may also have contractual claims against PayPal and/or PayPal's merchant acquirer).0 -
Unless the debtor opens an account with PP, loads it from a CC and uses the balance to pay the supplier, it's the supplier who uses PP to finance the transaction, not the debtor.GraceCourt wrote: »...
And as I'm getting tired of pointing out here, a Paypal transaction is not being used to finance a transaction between the debtor and the supplier, it's being used to finance a transaction between the debtor and Paypal.
Why do I need to read it if I don't want to open an account with them and I don't have to confirm that I agree to these T&C if the supplier uses PP to process the transaction?Read the terms and conditions provided by PayPal (Europe) S.à r.l. & Cie, S.C.A. if you can do so without losing the will to live...
It's the formalities that the 'debtor' isn't supposed to know about. Of course, CC providers will exploit every opportunity/loophole/formality to avoid their nonsensical obligations under S75.No, it doesn't. The supplier enters into a contract with PayPal (Europe) S.à r.l. & Cie, S.C.A. but not a merchant services agreement as far as the card issuers are concerned, and that's why PayPal (Europe) S.à r.l. & Cie, S.C.A. is an intermediary, thus "breaking the (contractual) chain" - read my previous posts.
I can only keep repeating that IMO in many cases when a merchant uses PP to process card payments the buyer isn't contracting with PP.I can't continue to respond to your replies if you lack even a basic understanding of contract law. When the buyer makes the Paypal payment, he is contracting with PayPal (Europe) S.à r.l. & Cie, S.C.A. to send that money to the merchant - again, read the terms and conditions next time you make such a payment.
Nowhere is the buyer required to accept any T&C if checking out as a guest.*Remember always - Paypal is an intermediary, and has quite separate contracts with the buyer and seller, neither of which involve the card issuer. The fact that the buyer doesn't have an account but "checks out as a guest" is irrelevant, because the buyer is still accepting the terms and conditions of a contract with PayPal (Europe) S.à r.l. & Cie, S.C.A. to transfer that money to the seller's Paypal account.
Because it was created when credit cards didn't exist and when the lender had control over what the credit would be used for. There are many rudimentary laws in UK that need changing, but haven't been changed yet because UK is the most conservative country in the world and every minor change can take decades even if it's obvious to everyone that it's needed. Adverse possession (squatters rights) is an example of such recent change that took decades to implement.Now you have lost me completely... Section 75 is all about the liability of a creditor to a debtor for breaches by a supplier under a debtor-creditor-supplier agreement falling within section 12(b) or 12(c) - i.e. credit card agreements! Why would it not be applied to credit cards???
Because it makes no sense if applied to CCs. Does it really make any sense to you that a CC provider, when providing unconditional credit, has to be responsible if a customer pays to some dodgy company in China? Does it make any sense that the CC issuer is liable for the full cost plus consequential losses even if only 1p was paid by the CC?
If this does make some sense to you, why this liability is unique for UK?
I think it's very common for lawyers not to see wood for the trees.
*ETA:
>>
Even if you click 'Terms' (why would you if you aren't asked to confirm that you agree to them?), you'll find: User Agreement for PayPal Service
2. Eligibility and Types of Accounts
This whole agreement is about accounts that a 'guest' isn't supposed to open.2.1...You further represent and warrant to us in opening an Account with us that you are not acting on behalf of, or for the benefit of, anyone else, unless you are opening the Account for and under the direction of the company that employs you. If you are not acting for the company that employs you, the new Account must be in your own name only. This Agreement applies only to Users who are residents of the United Kingdom and Relevant Countries. If you are a resident of another country, you may access your agreement from the PayPal website(s) in your country (if applicable). 2.2 Personal and Business Accounts. We offer the following types of Accounts: Personal and Business Accounts. Unless otherwise agreed, you may hold not more than one Personal Account and one Business Account. Holders of certain Personal Accounts may be required to upgrade their accounts (which may include providing further information to PayPal) in order to use all of the current functionality available in a Personal Account. By opening a Business Account and accepting the terms as outlined in this Agreement, you attest that you are not establishing the Account primarily for personal, family, or household purposes. You agree that your Account comprises the Payment Account and the Reserve Account.0 -
Unless you mean a claim resulting from s75 claim, not under s75, I don't think that s75 has anything to do with a possible claim of the card issuer against the supplier....And the card issuer's secondary claim under s.75 would also be against the supplier, not against PayPal (although it may also have contractual claims against PayPal and/or PayPal's merchant acquirer).
At the end of the day it's a B2B claim while S75 is a section of the Consumer Credit Act.0 -
I mean a claim under s.75(2), which entitles the creditor to be indemnified by the supplier when having to pay out under s.75(1).0
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Does it really make any sense to you that a CC provider, when providing unconditional credit, has to be responsible if a customer pays to some dodgy company in China? Does it make any sense that the CC issuer is liable for the full cost plus consequential losses even if only 1p was paid by the CC?
If this does make some sense to you, why this liability is unique for UK?
I know the question wasn't aimed at me, but yes there is a logic to the principle of liability. It's about trust in the network/payment method and countering the incentive to sign up any old merchant however dubious.
The networks and card issuers recognise that they have a commercial interest in building and maintaining trust, and to that end they voluntarily operate elaborate chargeback systems. These overlap with s.75, in some cases (including all non-UK cards, and transactions under £100) providing protection where s.75 does not.
There is of course a legitimate debate about just how far any statutory liability should extend, for example should it cover foreign transactions, transactions on additional cards, transactions through agents, consequential losses, losses exceeding the amount paid on the card, losses where the supplier is not a business? All of these levels of liability can be, but don't have to be, supported by reference to the same underlying principles.
For consequential loss, there are lots of consumer transactions whose losses can far exceed the amount paid. A card network might be quite happy to receive transaction fees from high-volume, low-value transactions which give rise to big losses for consumers, so long as they only have to process refunds where consumers complain. Having to bear consequential losses might make them think more carefully about who can participate in the network.
For part payment, it may seem ridiculous that paying just 1p on the card can trigger liability, but then where do you draw the line? It would be equally ridiculous to say that paying just 1p by cash should completely defeat liability. There are all sorts of other solutions available, some of which may have advantages over the current system, but that doesn't mean that the current one lacks logic.
One should also remember that the card issuer is not (necessarily) the one who loses out when a s.75 claim has to be met. S.75(2) allows them to claim against the supplier, and the network agreements will normally allow them to claim against the supplier's merchant acquirer, thus applying the leverage where it should be applied. And it's not exactly difficult for the merchant acquirer to require a supplier to have appropriate liability insurance to cover large consequential losses.0 -
a
It's Visa/Mastercard/... only that can, possibly, have some control over "signing up merchants". As a result, they offer chargeback protection that, generally, has nothing to do with nonsensical s75. Card issuers have no control over this, but for some mysterious reason get held responsible by s75.The networks and card issuers recognise that they have a commercial interest in building and maintaining trust, and to that end they voluntarily operate elaborate chargeback systems. These overlap with s.75, in some cases (including all non-UK cards, and transactions under £100) providing protection where s.75 does not.
There is of course a legitimate debate about just how far any statutory liability should extend, for example should it cover foreign transactions, transactions on additional cards, transactions through agents, consequential losses, losses exceeding the amount paid on the card, losses where the supplier is not a business? All of these levels of liability can be, but don't have to be, supported by reference to the same underlying principles.
And, AFAIK, all 'legitimat debate' was about interpreting the existing law, not changing it or even making sense of it.
Well, if the card issuers adapted to work within the existing legal framework, this doesn't mean that the framework is correct or makes sense. Ultimately, it's the customers who pay for everything, not the card issuers. Careful customers pay for careless - I don't mean that all claims result from carelessness.For consequential loss, there are lots of consumer transactions whose losses can far exceed the amount paid. A card network might be quite happy to receive transaction fees from high-volume, low-value transactions which give rise to big losses for consumers, so long as they only have to process refunds where consumers complain. Having to bear consequential losses might make them think more carefully about who can participate in the network.
Where?For part payment, it may seem ridiculous that paying just 1p on the card can trigger liability, but then where do you draw the line?
Assuming that s75 makes some sense in general (that I disagree with), the card provider has to be liable only for the amount paid by the CC. Nothing extra and no consequential losses.
Otherwise the only liability of the card provider is within the chargeback scheme. Why does it have to be different for credit cards and debit cards, even if overdraft was used? Again, the only explanation is some nonsensical formality.
Why ridiculous? The liability is 1p and is covered by chargeback. (ETA: minimum £10 for Mastercard)It would be equally ridiculous to say that paying just 1p by cash should completely defeat liability.
IMO, it lacks logic regardless of other solutions available.There are all sorts of other solutions available, some of which may have advantages over the current system, but that doesn't mean that the current one lacks logic.
Network agreement allows to claim only the amount paid, not the full cost+losses, - and this is perfectly logical, unlike s75.One should also remember that the card issuer is not (necessarily) the one who loses out when a s.75 claim has to be met. S.75(2) allows them to claim against the supplier, and the network agreements will normally allow them to claim against the supplier's merchant acquirer, thus applying the leverage where it should be applied.
And, IMHO, s75(2) doesn't make much sense either. Even without it the card provider can sue a UK supplier. If the supplier is abroad, this section is of no use for the CC provider.
Again, ultimately its customers who pay for everything, including insurers' expenses and profits on the top.And it's not exactly difficult for the merchant acquirer to require a supplier to have appropriate liability insurance to cover large consequential losses.0 -
IMHO Section 75 of the UK consumer credit act is a very important piece of consumer protection and is not at all outdated. If it were outdated why would Visa and Mastercard offer very similar (but watered down) protection globally via chargeback schemes. Visa and Mastercard are in a much better position to enforce consumer rights than an individual consumer. The protection offered by Section 75 (and by Visa / Mastercard chargeback) is invaluable to give consumers confidence to purchase from merchants with whom they may have no relationship. This is more important than ever in the modern age. If consumers did not have this protection then they would be far less willing to make a purchase from a merchant that they did not know. This reduced competition would drive up prices which would have a detrimental effect on consumers.0
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It's neither similar nor 'watered down'.samwardill wrote: »IMHO Section 75 of the UK consumer credit act is a very important piece of consumer protection and is not at all outdated. If it were outdated why would Visa and Mastercard offer very similar (but watered down) protection globally via chargeback schemes.
On the contrary s75 protection is excessive.
Not in the slightest the fact that it's beneficial for customers and retailers explains why CC companies are supposed to pay for this.Visa and Mastercard are in a much better position to enforce consumer rights than an individual consumer. The protection offered by Section 75 (and by Visa / Mastercard chargeback) is invaluable to give consumers confidence to purchase from merchants with whom they may have no relationship. This is more important than ever in the modern age. If consumers did not have this protection then they would be far less willing to make a purchase from a merchant that they did not know. This reduced competition would drive up prices which would have a detrimental effect on consumers.0
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