Does section 75 cover you on money transfer credit cards?

brutus6

If I was to pay a landscape gardener on a money transfer credit card and they failed to do the work or something similar. Could I pursue them with my credit card company under section 75?

I understand it's unlikely if I transfer money into my own bank account and then pay them via BACs, but if I do a direct transfer into their account from the card would that be similar to a purchase and therefore afford me the cover and protection under section 75?

I can't find any info on it online, so probably means "no", but thought I would ask anyway.

Thanks guys!

chattychappy

This sounds like a law exam question!

But I think the answer is still no. S75 refers to a "debtor[you]-creditor[the CC]-supplier agreement". In your example, the gardener is not part of any agreement with the CC, even if the money is transferred directly.

I don't think it's ever been tested with the FOS or a court.

eddddy

From a more practical perspective, businesses that want to accept CCs have to open a merchant account with an acquiring bank.

This involves some level of credit-worthiness checking and/or delayed settlement (i.e. you pay with a CC, but the bank keeps some/all of the money for a while, before giving it to the business, in case of chargebacks and s75 claims.)

Your gardener hasn't been checked out by an acquiring bank, so it would be unrealistic for other banks to offer s75 protection.


(A key point of s75 protection is to encourage banks to check out businesses, before they lend consumers money to buy goods and services from them.)

grumbler

eddddy wrote: »

...
(A key point of s75 protection is to encourage banks to check out businesses, before they lend consumers money to buy goods and services from them.)

How come?
It's the CC company that is liable, not some local bank that the supplier has the account with. And the CC company has no way to "check out businesses before they lend money".

As said many times, s75 if applied to CCs makes no sense whatsoever. It's just a formality with some stupid rules that make no sense, but have to be followed.

These old threads can have some relevance to the topic of this one:
Visa debit card - section 75???
New! Post of the Month is back - Nominate October's best discussion

chattychappy

S75 CCA1974.

The clue is in the "1974". It was a different world then. Most people's idea of credit was the bloke that would knock at your door, chuck some dust on your carpet, "look how well it sucks" sell you a "vacuum cleaner" on the never-never, a month later the device packs up but you still owe the money.

Now people type their CC into a Chinese website, get their dodgy UGGs which only cost $20 from the "Lucky Star Number One Outlet Company - every products real", a few months later realise they are fake, and expect their CC to pick up the tab for their stupid buying practices.

(Oh hang on, is it a different world?)

eddddy

I don't claim to have read those entire threads.

However, the high level principle of the CC networks, and why s75 makes sense is roughly as follows.

Banks apply to join a network(s) - Visa, MC, Amex.

In simple terms - one member of the network checks out a business, and if that member passes the business, other UK members agree to the risk of s75 cover for that business.


If 'rogue' local member banks are failing to do proper checks, and other member banks are losing money as a result (through s75), I'm absolutely positive that those member banks will be putting pressure on the network to 'discipline' the 'rogue' members.


If a UK member bank is suffering lots of s75 losses, because the network they use isn't good at enforcing standards on local member banks, I guess they will consider changing to another network with a better record.

Candyapple

brutus6 wrote: »

If I was to pay a landscape gardener on a money transfer credit card and they failed to do the work or something similar. Could I pursue them with my credit card company under section 75?

I understand it's unlikely if I transfer money into my own bank account and then pay them via BACs, but if I do a direct transfer into their account from the card would that be similar to a purchase and therefore afford me the cover and protection under section 75?

I can't find any info on it online, so probably means "no", but thought I would ask anyway.

Thanks guys!

You would fail on this point because the bank account you send the money to would need to be in your name only.

grumbler

eddddy wrote: »

..the high level principle of the CC networks, and why s75 makes sense is roughly as follows.
Banks apply to join a network(s) - Visa, MC, Amex.

In simple terms - one member of the network checks out a business, and if that member passes the business, other UK members agree to the risk of s75 cover for that business.


If 'rogue' local member banks are failing to do proper checks, and other member banks are losing money as a result (through s75), I'm absolutely positive that those member banks will be putting pressure on the network to 'discipline' the 'rogue' members.

This is how chargeback works that is Visa/Mastercard/Amex internal procedure, not enforceable legally.

Do you actually have any idea about s75? Under this section, the CC provider is liable even if it fails to sort this out with another bank. And it is liable for the full amount even if just 1p was paid by the CC. And it is liable for consequential losses as well.

Does this really make any sense to you?

If a UK member bank is suffering lots of s75 losses, because the network they use isn't good at enforcing standards on local member banks, I guess they will consider changing to another network with a better record.

Yeah, it has loads of networks around to chose from.

MSE articles:

• Visa, Mastercard & Amex Chargeback

• Section 75 refunds