Lloyds Bank ordered to settle two-year-old Section 75 claim involving PayPal

Sandtree

Tim11111000111 said:

It's an interesting decision. I find it odd that there is a supposed distinction depending on whether or not you are logged in to your account in order to make the purchase. I typically log in to my Paypal account when making a purchase because it has my card details already saved and logging in is easier than digging out a card and typing in the number. I'm no lawyer, but I don't see how doing so breaks the "chain" any more than using the guest checkout process. As far as I can tell, PayPal's role is still no more than a payment processor. It appears on my credit card bill as "PayPal * Storename" which is the same format as other payment processors (e.g. iZettle appears as "iZ * Storename"). 

Obviously that's different to using money from my "PayPal balance" - I'm not sure I can top up my "Paypal balance" directly from a credit card, but if I could then that I can see that would break the "chain".

But that is how PayPal works if you log in... you card payment is used to increase your account balance and then transferred to the other account holder hence it looks like: 


Zettle, as they now are and are owned by PayPal, is another one where a question mark has been raised on if they break the chain or not because it being a non-traditional acquirer. They've said they dont think they do because effectively all the buyers are equivalent of a "Guest" but the counter argument is that the money doesnt go straight into a bank account in the name of the merchant.

Jenni_D

Just musing ... wouldn't this have been a better fit for the Credit Cards board?

born_again

arthurfowler said:

born_again said:

Time S75 had a total overhaul as it was never designed for credit cards. It was intended to cover the likes of hire purchase where the lender was almost tied to the seller. As you had no choice but to use the retailers chosen credit provider.

Would really help if there was a link to the actual FOS case.

Why does it need an overhaul? Whether it was designed in this way or not, it is one of the only legitimate ways a consumer has to take action. Other ways are far more laborious and difficult. It's not like they hand out refunds, they still investigate the issues first. 

They do hand out the refund. Any investigation is based on the paperwork received. You do not think the CC chase the retailer for the payout do you? As they do not.

Remember without S75 you can still take retailer to small claim court.

S75 is simply not fit for the purpose it was designed for. Cases like this prove that claim. 

arthurfowler

born_again said:

arthurfowler said:

born_again said:

Time S75 had a total overhaul as it was never designed for credit cards. It was intended to cover the likes of hire purchase where the lender was almost tied to the seller. As you had no choice but to use the retailers chosen credit provider.

Would really help if there was a link to the actual FOS case.

Why does it need an overhaul? Whether it was designed in this way or not, it is one of the only legitimate ways a consumer has to take action. Other ways are far more laborious and difficult. It's not like they hand out refunds, they still investigate the issues first. 

They do hand out the refund. Any investigation is based on the paperwork received. You do not think the CC chase the retailer for the payout do you? As they do not.

Remember without S75 you can still take retailer to small claim court.

S75 is simply not fit for the purpose it was designed for. Cases like this prove that claim. 

I doubt they chase the retailer, so it's only affecting the profits of credit card companies, which in my opinion, is absolutely fine. 

Small Claims court vs Section 75 - I don't think consumers would think twice before deciding which road to go down. 

I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

born_again

arthurfowler said:

I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

So you are happy for the retailer to get away scot free? So they can just carry on scamming customers? On this a consumer rights forum...

 In the end everybody who has a credit card is paying for the payouts. Why do you think the interest rate is so high?

Sandtree

arthurfowler said:
I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

The question is why should a credit card company be the one providing the protection? Its ultimately funded by other customers. 

Plus why do only credit card users get such protection if its needed? Why doesnt someone with a debit card equally need protecting? Or people that have to pay cash because they're fighting debt.

If no innocent person should be out of pocket surely its then for the government to set up a fund to provide such monies and then the protection isnt just for the credit worthy.

The theoretical argument previously was that when S75 was created there was a direct relationship between the lender and the supplier and so the lender had to consider the supplier's trustworthiness when decide if they'd allow them to offer their finance. If they considered them worthy then they had to put their necks on the line too. Since the proliferation of credit cards though that relationship no longer exists... I can open a Zettle account in minutes and charge people's Natwest or Barclaycard cards (debit and credit) thousands and the issuing banks have little to no say in the matter and yet for some reason they are on the hook for that money, but only for the credit card customers.

MarvinDay

born_again said:

arthurfowler said:

I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

So you are happy for the retailer to get away scot free? So they can just carry on scamming customers? On this a consumer rights forum...

 In the end everybody who has a credit card is paying for the payouts. Why do you think the interest rate is so high?

Everyone?
I've got two different credit cards (one Visa, one Mastercard) and I would estimate that a good 90-95% of my purchases go on these cards yet since I've had them, I've never paid a penny in interest on either one of them.
In fact, due to cashback I've received over the years, the credit card companies have been paying me.

Sandtree

MarvinDay said:

born_again said:

arthurfowler said:

I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

So you are happy for the retailer to get away scot free? So they can just carry on scamming customers? On this a consumer rights forum...

 In the end everybody who has a credit card is paying for the payouts. Why do you think the interest rate is so high?

Everyone?
I've got two different credit cards (one Visa, one Mastercard) and I would estimate that a good 90-95% of my purchases go on these cards yet since I've had them, I've never paid a penny in interest on either one of them.
In fact, due to cashback I've received over the years, the credit card companies have been paying me.

Then arguably vulnerable customers who've gotten themselves into debt and those who are just bad at managing their money... are these really the people who should be covering the !!!!!! of bad trades people @MarvinDay?

Obviously banks also get the card fees which you've been paying via shops charging more for goods to cover card fees.

MarvinDay

Sandtree said:

Then arguably vulnerable customers who've gotten themselves into debt and those who are just bad at managing their money... are these really the people who should be covering the !!!!!! of bad trades people @MarvinDay?

Obviously banks also get the card fees which you've been paying via shops charging more for goods to cover card fees.

I fully agree with what you've posted but this doesn't change the fact that the blanket statement of:

In the end everybody who has a credit card is paying for the payouts

is incorrect as there are a lot of people like myself who always pay off their credit card bills in full and therefore are not paying a penny towards any S75 payouts.

arthurfowler

born_again said:

arthurfowler said:

I still don't understand why you think it's not fit for purpose or needs an overhaul. It is there and helps protect consumers from unfair traders. 

So you are happy for the retailer to get away scot free? So they can just carry on scamming customers? On this a consumer rights forum...

 In the end everybody who has a credit card is paying for the payouts. Why do you think the interest rate is so high?

And the alternative you mentioned of the small claims court can be expensive, especially depending on the amount you are claiming for. The amount of people who will actually go through with small claims will be far lower than those who claim on Section 75, and therefore even more people will lose out on bad traders. 

Who is going to want to go to small claims court because Currys won't replace/repair their £200 vaccum? In the end, it's the consumer who will lose. 

I very much doubt interest rates would go down if Section 75 were suddenly removed. They would just pocket even more profit and keep them as is. 

I do agree that this protection should be for everyone, however which way you choose to pay, but currently it's either Section 75 or small claims court really,