Section 75, Square payment processor. - claim won

Mc228

jet01 said:

Very disreputable behaviour by the CC company. After all the above I still don’t understand for the life of me how they can possibly believe that Square should be treated differently to any other merchant acquirer which is surely what they are at the end of the day. With the exception of Amex then surely a third party processor must always be involved in a CC transaction? Just because Square are a new market entrant rather than a traditional operator don’t see how that changes their role in the transaction or how anyone can conceivably argue that it should. Big Cc company using spurious legal argument to try and avoid paying up and surely they should have realised it was inevitable the ombudsman would have to rule in the OP favour.

Thanks yeah. It works in exactly the same way as a normal merchant acquirer as per my research. When you pay at the terminal, payment is authorized by the card issuer, processed through the networks and into the acquiring bank account before being deposited into the merchants bank account less fees by the acquirer. Square does exactly the same thing.

jsmith9

Thanks for taking the trouble to update us so comprehensively. Are you willing to name the CC card company so I can avoid using them, especially on square terminals. Thanks.

Jumblebumble

Mc228 said:

Hi,
I will post a timeline including the most important points. Ombudsman was used. I have changed names of parties.
6/6/2019: S75 claim raised with CC.
01/07/2019: CC reject claim citing a break in the DCS chain and that "Arguably, the transaction has been financed by Square, which means that your card was used to purchase the credit on a Square account, not the services".
09/07/2019: I reply with a letter citing a previous ombudsman decision (DRN0797157) that states that there is no evidence that "four or more" party agreements break the chain.
12/08/2019: Having not heard back from CC I raise a complaint with the Ombudsman as it has been over 8 weeks since the initial complaint. I state my case as follows:

Now it is crucial to note here: The CC Company never accepted that Square did not break the DCS chain.  They instead stated that they were looking into my claim under Section 75 "Regardless of whether or not the DCS chain was broken". This is an important distinction as I guess they wanted to avoid making a precedent of this. However should you find yourself in a situation like I have I hope that my experience, research and arguments can help you.

I am glad the Ombudsman was there to stop them ignoring me.

I am not surprised that the Ombudsman dismissed the Credit card's nonsense.
Any other outcome would probably result in the credit card companies trying to set up all their payments this way and neatly overriding the Law.
They could go to all merchants and say if you use stripe our fees will be less

loveka

Thank you so much for all that. It is so helpful to me and I am sure to others.
I think you are right- they really don't want a precedent set.

born_again

Mc228 said:I guess they wanted to avoid making a precedent of this. 

I am glad the Ombudsman was there to stop them ignoring me.

Well done on sticking it out for so long, many would have given up.

I do think that these small co's that provide card readers to small companies should not be treated in the same way as PayPal who in many case take the money & then send it to the seller, rather than simply provide the device that allows a retailer to process a payment, just the same as a card reader from one of the normal merchant banks.
Not sure on the setting a precedent, as FOS have done that with their ruling. If this card co get another they dare not reject it on the same basis as FOS will make them pay for it.

But as I have said this before. Time the FCA had a real look at S75 and brought it up to date, as it is not fit for purpose now. As credit is no longer the same as what S75 was intended for.
Thus it causes many issues such as this.

PM2019

Thank you for the comprehensive update. Well done! 

At the time I was following this thread (and it was very helpful) I held out little hope that my situation would resolve satisfactorily. 

Happily,  i was wrong to be pessimistic as a reasonable individual in the firm saw my side...eventually...and I was satisfied with the outcome. 

But I will be better prepared in the future. This has been a very useful thread. 

Well done and thanks again.