Mortgage valuation fee Credit Card "cash transaction"

Ben8282

Anything could be argued. But the OP has never returned to the thread to clarify anything and the 'me too' post has unfortunately clouded the thread by introducing Tesco when the OP made no mention of Tesco.
My previously stated personal opinion that this should not have been treated as a cash transaction remains unchanged.

Sjk1

Exactly the same as Ohfeelya, although they didn't offer a refund on the charges so I have raised a complaint, not that hopeful but I think its good to raise the issue.

boo_star

BoGoF wrote: »

Are you paying for a 'service' in this situation though?

You are not paying the surveyor directly, you are paying the mortgage company a fee which forms part of the mortgage. Normally you can add fee to mortgage or pay. Could it be argued that this is not a service but a cash debt.

As I understand it the reason for charging cash advance fees for non-cash transactions is to avoid people circumventing cash advance fees by buying things/services/whatever and then withdrawing it by another method.

I don't see how paying a mortgage, and certainly not fees, is the same.

That being said the institution involved chooses how to categorise the transaction and they could easily put it down as a non-cash transaction.

Thrugelmir

The charge levied is the cost to the lender of the service being provided. The applicant is indirectly paying the cost.

Same as search fees for the property being purchased. The solicitor merely asks for client funds to settle the disbursement.

Credit cards and charge cards carry high transaction charges which result in the payee receiving less hard cash.

boo_star

Thrugelmir wrote: »

The charge levied is the cost to the lender of the service being provided. The applicant is indirectly paying the cost.

Same as search fees for the property being purchased. The solicitor merely asks for client funds to settle the disbursement.

Credit cards and charge cards carry high transaction charges which result in the payee receiving less hard cash.

Incorrect. This isn't a vendor fee, it's a fee by the CC provider.

Ben8282

Sjk1 wrote: »

Exactly the same as Ohfeelya, although they didn't offer a refund on the charges so I have raised a complaint, not that hopeful but I think its good to raise the issue.

Exactly the same? You also used a Tesco credit card and did so because your Barclays debit card had expired and they had not sent you a new one but in your case Barclays failed to refund the fee?

I had always assumed that cash advance fees were intended to be in lieu of the fee charged to the merchant.
Use an ATM and withdraw cash, the 'merchant' is not charged a merchant fee so the credit card issuer is paid by the customer in the form of the a cash advance fee. The same principal applies to other 'cash' transactions such as buying stocks and shares, buying foreign currency etc (see the list posted above).
I have not used a credit card for the purpose of paying a 'mortgage valuation fee' but have used them from time to time to pay bills - our Sky subscription is paid by CPA, I pay car and another insurance in full annually by credit card, and these transactions have never been treated as cash.
Presumably the decision to treat a transaction as cash or otherwise would depend on the code as advised by the merchant. I don't really see that a credit card provider could reasonably make this determination; it will be made based on the code.
The statement that this is because Tesco have decided that all transactions from 'financial institutions' (How do you define a 'financial institution'?) .will be treated as cash, as advised by the 'me too' poster, of which they were apparently informed in a 'notification' sent in 2018, really makes very little sense as Tesco would have absolutely no idea what an individual transaction from such an institution was actually for and this is really too broad a statement.
We still have no idea of who (which 'financial institution') exactly debited the credit cards of the OP and the 'me too' poster

born_again

Sjk1 wrote: »

Exactly the same as Ohfeelya, although they didn't offer a refund on the charges so I have raised a complaint, not that hopeful but I think its good to raise the issue.

So you are saying this is Tesco?

Financial Institutions - Manual Cash Disbursements Mcc = 6010 & 6011
Financial Institutions - Merchandise and Services Mcc = 6012

If Tesco want to charge the same on both, then that is their policy. As such they will decline you complaint on "Our Policy" basis.
Many other cards DO NOT charge in the same way.

Hence why you need to be totally clear on who's card it is and also who the merchant is...

Terry_Towelling

The reason why your issuer charges you for withdrawing cash is clearly laid out in post #10 - it is made to cover the fee your issuer has to pay away to the cash provider. Where a transaction is not cash (but a purchase instead) the issuer does not have to pay away any fee to the cash provider - rather they actually receive a credit from the Merchant.

A mortgage valuation fee is a fee for a service; it is not cash dispensed to you and the body charging that fee is almost certainly not profiling the transaction as cash but as a purchase. So any issuer also levying a fee in such a situation is being paid twice - and that (to my mind) is sharp practice. It doesn't matter that Tesco may have themselves covered by their T&Cs, it is sharp practice.

Just my opinion and you are free to agree or disagree with it - that's not a problem. I'd complain to Tesco about it regardless of whether they accepted my argument. I'd also take it to FOS (if necessary) just to highlight the double-credit being received by Tesco as a result of their policy. It isn't necessarily about getting your money back, it's about highlighting something that just isn't right.

Tirian

I'd say there is an issue here if it is not made sufficiently clear when getting the card that any payment at all to a financial institution is going to be classed as "cash".

This is not normal and there's not really any justification, as others have pointed out.

Saying that because the fee could otherwise be added to the mortgage that it is the equivalent of paying for cash is just nonsense. If the service was paid for out of the mortgage loan, and you were paying off that portion of the mortgage with a credit card that would indeed be paying for cash - but if you've opted to pay for the service yourself INSTEAD of having it added to the mortgage, then you are making a payment for a service rendered (namely the actual carrying out of the survey or the valuation).

Absolutely complain about it - I'd be inclined to mention "Treating Customers Fairly" in the course of the conversation. Regardless of whether they have buried it away in their t&cs somewhere, it's rapacious practice - they are basically awarding themselves money for nothing in circumstances where a reasonable person would not expect to be getting charged fees for "cash advance".

Sjk1

Thanks all for the helpful feedback, I complained to Tesco and they have declined my complaint and referred me to their T&Cs, however despite this they are going to refund me.