We'd like to remind Forumites to please avoid political debate on the Forum. This is to keep it a safe and useful space for MoneySaving discussions. Threads that are - or become - political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
We're aware that dates on the Forum are not currently showing correctly. Please bear with us while we get this fixed, and see Site feedback for updates.

Revealed: Section 75 credit card protection may fail due to payment processing

Savvy shoppers who pay with a credit card in order to qualify for Section 75 protection if something goes wrong risk being left £1,000s out of pocket thanks to an obscure and little-understood exemption, a MoneySavingExpert.com investigation reveals....
Read the full story:
'Revealed: Section 75 credit card protection may fail due to payment processing loophole - shoppers beware'
OfficialStamp.gif
Click reply below to discuss. If you haven’t already, join the forum to reply. If you aren’t sure how it all works, read our New to Forum? Intro Guide.
Read the latest MSE News
Flag up a news story: news@moneysavingexpert.com
Get the Free Martin's Money Tips E-mail
«13

Comments

  • ask66
    ask66 Posts: 98 Forumite
    Part of the Furniture 10 Posts Name Dropper
    This is a crazy situation. Many thanks to Martin & MSE for anything you are able to do to get some clarity.
  • Biggles
    Biggles Posts: 8,209 Forumite
    1,000 Posts Combo Breaker
    They told us about this snag years ago, has something changed?
  • eskbanker
    eskbanker Posts: 35,345 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    Biggles wrote: »
    They told us about this snag years ago, has something changed?
    To the best of my recollection they've consistently warned about PayPal in particular, where the consumer is choosing to use a (visibly) third-party payment provider, but this piece appears to be claiming that other card payment processors (WorldPay, Sage Pay, etc) routinely used 'internally' by businesses at their discretion could also negate s75 protection, which isn't an angle I remember seeing from them before. Happy to be proved wrong though!
  • bigadaj
    bigadaj Posts: 11,531 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper
    eskbanker wrote: »
    To the best of my recollection they've consistently warned about PayPal in particular, where the consumer is choosing to use a (visibly) third-party payment provider, but this piece appears to be claiming that other card payment processors (WorldPay, Sage Pay, etc) routinely used 'internally' by businesses at their discretion could also negate s75 protection, which isn't an angle I remember seeing from them before. Happy to be proved wrong though!

    Yes, it's been raised as a theoretical risk before, on these boards I believe, though no examples have been quoted apart from PayPal.
  • I think third party payments operate similarly to PayPal , where the payment reach a third party. YoYo and the Tesco payment app are other examples (although Tesco uses to app to collect payments for their stores, so I guess it would have an hard time arguing to be a third party). WorldPay directly process Visa and MasterCard but I believe Amex transactions are sub-processed
  • Crabman
    Crabman Posts: 9,943 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    edited 27 April 2017 pm30 9:25PM
    This article suggests that the FOS is not fit for purpose - there is no feasible reason they could not publish guidance so there is transparency and consistency across cases.

    Customers of the FOS are in fact the financial firms who pay the "case fees" and nobody - Parliament or the Treasury - can touch them due to their "independence."

    Are there any formal qualifications to become a case assessor at the FOS?

    Imagine how embarrassing it would be for the FOS to have it revealed that two cases involving the same credit provider and payment processor resulted in different outcomes on the basis of the case-by-case assessment of the debtor-creditor-supplier link ;)
  • eskbanker
    eskbanker Posts: 35,345 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I'd have thought it's more the FCA's role to issue the clear guidance (in their regulatory capacity), which should then be used by FOS when resolving disputes, but it's a complex area, obviously not helped by a credit/payment/technology landscape that's a million miles away from where it was when the Consumer Credit Act became law in 1974!

    So, although I agree that there should be clearer guidance, I'm more horrified by "We also approached the Payment Systems Regulator about this issue, which told us to contact the Financial Conduct Authority (FCA). However, the FCA refused to give a statement"....
  • boliston
    boliston Posts: 3,012 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    A lot of companies use card processors like sagepay to remain pci compliant as the rules are now so tight on compliance but from the customers point of view you are still paying the company directly as sagepay is not a "payment method" like paypal is, it is just a card processing company.
  • System
    System Posts: 178,227 Community Admin
    10,000 Posts Photogenic Name Dropper
    Paypal can be either - I never leave mine in credit so that I can always avail myself of chargeback.

    The iZettle issue is a worrying development though.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
  • Crabman
    Crabman Posts: 9,943 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    Labsuper wrote: »
    The law is unclear and a grey area on this so the what legal guidance can they therefore give.

    Interesting - if the law is unclear/a grey area - on what basis is the FOS therefore adjudicating? What criteria are they using internally to arrive at decisions and why can't such guidelines simply be published for transparency?
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 348.4K Banking & Borrowing
  • 252.1K Reduce Debt & Boost Income
  • 452.4K Spending & Discounts
  • 241K Work, Benefits & Business
  • 617.3K Mortgages, Homes & Bills
  • 175.7K Life & Family
  • 254.1K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.