Paid by Credit Card?... think you’re covered?..perhaps not!

The_Big_Bamboo

eskbanker wrote: »

I don't believe it's as clear-cut as one route being protected and the other definitely not as the whole thing seems a massive grey area with conflicting advice given by various parties (and none at all from the FCA, worryingly), as per the MSE article and associated discussion thread from earlier in the year:

https://www.moneysavingexpert.com/news/cards/2017/04/revealed-section-75-credit-card-protection-may-fail-due-to-payment-processing-loophole---shoppers-beware

https://forums.moneysavingexpert.com/discussion/5639706

Thanks again my friend;…I’ve certainly learned a lot of potentially valuable info today!

…the whole situation is a bleedin’ minefield.

It certainly needs ‘21st century’ legislation to sort it out;…however, I won’t hold my breath on that one.

The_Big_Bamboo

takman wrote: »

The reason there are two "routes" as you call it is because when you use services such as PayPal you top up the account with money and then use the money to pay for the purchase. So you could top up the account with one transaction of £1000 and then buy two separate items for £450 each and still have £100 in the account. So there is clearly not a direct connection with the credit card transaction and any purchase made so they can't be held liable.

It would be like me topping up my Monzo Prepaid card from another bank and making purchases then attempting to make a chargeback from the bank for one of the purchases I make.



Many people happily click through when making purchases without reading or understanding what is happening. The amount of people subscribing to services and claiming to know nothing about it on this forum is evidence of that.

Personally i don't think it's difficult to know when section 75 will apply if you make sure you understand the rules and when it will and won't apply. If someone wants to take advantage of section 75 protection then they need to take some responsibility and make sure they understand how to use it correctly. If they only take the time to partially understand it then how can they complain when it all goes wrong. Who do they expect will explain it to them if they don't make the effort to look for the information themselves.

...thanks for that!

From what I’ve learned today it would appear to be almost impossible for you, or anyone else for that matter, to be completely certain that ‘Section 75’ applies,…such are the vagaries this topic.

eco_warrior

takman wrote: »

Personally i don't think it's difficult to know when section 75 will apply if you make sure you understand the rules and when it will and won't apply. If someone wants to take advantage of section 75 protection then they need to take some responsibility and make sure they understand how to use it correctly. If they only take the time to partially understand it then how can they complain when it all goes wrong. Who do they expect will explain it to them if they don't make the effort to look for the information themselves.

I can see your point but I find s75 to be something that’s extremely difficult for a layman to understand. Plus it’s sometimes out of the control of the purchaser ie lack of contract, or even how the transaction appears on the statement can scupper things. I would say it’s complex

bigadaj

The_Big_Bamboo wrote: »

Thanks again my friend;…I’ve certainly learned a lot of potentially valuable info today!

…the whole situation is a bleedin’ minefield.

It certainly needs ‘21st century’ legislation to sort it out;…however, I won’t hold my breath on that one.

Section 75 is an anachronism as stated earlier, if more legislation were to be passed now then it would probably weaken the consumer protection in this area, primarily because the way it's being used in the 21st century wasn't the way the law was intended to work.

It appears to have been brought in to make large banks and financial institutions equally liable where people were using HP back in the 1970s, so stopping smaller shady operators with getting away with supplying poor goods, or at least making sure the customer could go back to the bank which held the debt to get them to refund or sort things out.

The current application is often unfair to banks really, if you oay for a holiday or a car costing tens of thousands, and make a deposit of a few pounds on a credit card, why should the provider then be liable for the full value, it's not very sensible.

I don't hear much sympathy for financial institutions generally, and make use of section 75 cover myself, but it is unjustifiable in any sensible interpretation outside a court of law, luckily for consumers then many courts aren't very sensible.

chattychappy

Yep, it's especially ridiculous when you have UK lenders with little practical control or connection with suppliers that might be on the other side of the world.

The problem for parliament is that if they weaken S75, then voters will be up in arms - exploited consumers have more sympathy than greedy bankers. If they strengthen it, then it will become even more onerous on institutions than it is now.

The best we can hope for is some sort of updating, perhaps along these lines:

1) Extend cover to additional cardholders and "payment processor" type situations.
2) Payouts to be proportional to the amount put on the card: eg if £10 of a £1000 transaction is put on a card, then only 1% of the amount due for breach/misrep is paid out.
3) Remove the £100 item limit - have a single transaction floor of £100.
4) Restrict cover to UK transactions.

Personally I'd like S75 repealed. Else make available some sort of opt-out that can be offered to cardholders so that people who do not want this "cover" can get extra airmiles etc.

Biggles

takman wrote: »

PayPal also offer online payments direct to the retailer. So if you pay using this method where you don't need to log in your still covered by section 75.

Is that definitely the case? I'm OK, then, as I never log in (tho I do have a PP a/c).

I did try and get MSE to clarify that point when they first raised the PP issue in a thread some years back but they never did.

The_Big_Bamboo

bigadaj wrote: »

Section 75 is an anachronism as stated earlier, if more legislation were to be passed now then it would probably weaken the consumer protection in this area, primarily because the way it's being used in the 21st century wasn't the way the law was intended to work.

It appears to have been brought in to make large banks and financial institutions equally liable where people were using HP back in the 1970s, so stopping smaller shady operators with getting away with supplying poor goods, or at least making sure the customer could go back to the bank which held the debt to get them to refund or sort things out.

The current application is often unfair to banks really, if you oay for a holiday or a car costing tens of thousands, and make a deposit of a few pounds on a credit card, why should the provider then be liable for the full value, it's not very sensible.

I don't hear much sympathy for financial institutions generally, and make use of section 75 cover myself, but it is unjustifiable in any sensible interpretation outside a court of law, luckily for consumers then many courts aren't very sensible.

Good post that, very informative, thanks bigadaj;

…assuming I’ve understood the gist of your comment (apologies if I’ve not!) in what way is Section 75, quote; ” unjustifiable in any sensible interpretation outside a court of law” ?

I agree that parts of it (as you highlighted) seem a little unfairly weighted in favour of the customer but the general thrust of the legislation is still valid, IMHO.

Credit Card companies actually stump up the money to pay for the ‘goods’ that we wish to acquire. We, as Credit Card customers, don’t pay that money. In fact we don’t pay a penny until the Credit Card company tell us to start paying-off the ‘debt’ that they’ve acquired on our behalf,... plus any interest charges they deem fit to levy.

Credit card companies have an obligation to ensure we receive the ‘goods’ they’ve initially paid for,… and then go on to charge us for.

If we, as Credit card customers, don’t receive the goods that the Credit Card company have paid for then we shouldn’t be liable;…. IMHO of course.

bigadaj

The_Big_Bamboo wrote: »

Good post that, very informative, thanks bigadaj;

…assuming I’ve understood the gist of your comment (apologies if I’ve not!) in what way is Section 75, quote; ” unjustifiable in any sensible interpretation outside a court of law” ?

I agree that parts of it (as you highlighted) seem a little unfairly weighted in favour of the customer but the general thrust of the legislation is still valid, IMHO.

Credit Card companies actually stump up the money to pay for the ‘goods’ that we wish to acquire. We, as Credit Card customers, don’t pay that money. In fact we don’t pay a penny until the Credit Card company tell us to start paying-off the ‘debt’ that they’ve acquired on our behalf,... plus any interest charges they deem fit to levy.

Credit card companies have an obligation to ensure we receive the ‘goods’ they’ve initially paid for,… and then go on to charge us for.

If we, as Credit card customers, don’t receive the goods that the Credit Card company have paid for then we shouldn’t be liable;…. IMHO of course.

Because it's unjustifiable in relationship to the original intention behind the act. It's just a payment mechanism for most people at the end of the day, so why shouldn't a bank reimburse a cheque for the reason you've mentioned.

Why should someone receive £30000 reimbursement from a card provider when they have purchased £1 on their card, it's just a bizarre anachronism, though one I'll take advantage of whilst available, so happy to be called a hypocrite.