Paypal credit - section 75 22 August 2022 at 11:03PM in Credit cards 6 replies 216 views

crazyoldmaurice

Does PayPal credit provide any protection in the way a bank credit card has a section 75? 

I haven't used my bank credit card in a long time and it won't let me make a transfer of cash anywhere. I want to put down a deposit for a puppy (500) and I would rather do this with some protection incase I get scammed. I'm waiting to hear back from my banks customer services but I noticed I do have PayPal credit up to 4k on my PayPal account. 

Just wondering if PayPal credit offers any form of section 75 where I could do a charge back if the puppy breeder suddenly disappears?

grumbler

crazyoldmaurice said:

Just wondering if PayPal credit offers any form of section 75 where I could do a charge back if the puppy breeder suddenly disappears?

Chargeback and s75 protection are different things.

Debit & credit card chargeback

Section 75 refunds: credit card protection

PayPal does offer some sort of protection similar to chargeback.

Credit card providers don't just 'offer' the extra protection. This is imposed on all credit providers, including PayPal Credit, by Section 75 of of the Consumer Credit Act .

https://www.paypal.com/uk/webapps/mpp/credit-promotion-terms >> 10.3.

DullGreyGuy

crazyoldmaurice said:

Just wondering if PayPal credit offers any form of section 75 where I could do a charge back if the puppy breeder suddenly disappears?

You are mixing up two different things...

Chargeback is a series of rules operated by Visa, Mastercard, AmEx and Diners club etc which everyone has to agree to when getting a card or getting the facilities to accept card payments. This doesn't apply to PayPal Credit however PayPal has its own Buyer Protection scheme which if applicable for a particular transactions is roughly similar (though notably different time periods)

S75 applies to any form of credit given to a consumer in the UK that is regulated by the Consumer Credit Act. That generally means almost all consumer credit in the UK is however there are notable exceptions like Klama who say debts have to be paid in 3 payments in under 12 months meaning they fall outside the scope of the CCA (CCA require debts to be for 4 or more payment or over 12 months)

PayPal Credit therefore falls in scope of the CCA. For S75 to apply there are other conditions such as the value of the item and most problematically the relationship between the Debtor (you), Creditor (PayPal) and Supplier. This is why if you took £1,000 out of a cash machine and then paid a merchant with that cash you wouldnt get S75 protection because the three way relationship has been broken.

I dont know how PayPal Credit functions to definitively say the D-C-S relationship would be intact for S75 to apply. As noted in clause 10.3 linked to by Grumbler, PayPal state it MAY apply without further explanation as to why it may not apply. Its easy to think of a few where it wouldnt apply but it leaves the door open for other reasons such as the D-C-S chain.

Thankfully the likes of https://www.financial-ombudsman.org.uk/decision/DRN1073193.pdf seems to suggest the Ombudsman looks favourably on these types of cases even if PayPal tries to hide behind its T&Cs

born_again

Re above & the mention of Klana.
PayPal credit works in the same way. Buy now pay in instalments. 

So the water is very muddy. 🤷‍♂️

https://www.paypal.com/uk/webapps/mpp/paypal-virtual-credit?

MEM62

crazyoldmaurice said:

Does PayPal credit provide any protection in the way a bank credit card has a section 75? 

I haven't used my bank credit card in a long time and it won't let me make a transfer of cash anywhere. I want to put down a deposit for a puppy (500) and I would rather do this with some protection incase I get scammed. I'm waiting to hear back from my banks customer services but I noticed I do have PayPal credit up to 4k on my PayPal account. 

Just wondering if PayPal credit offers any form of section 75 where I could do a charge back if the puppy breeder suddenly disappears?

The prudent course of action here is to do your research on the breeder before parting with any money - not relying on S75 if things go wrong.  Any reputable breeder would be able to offer proper assurances.  And don't for get all the other prudent steps when buying puppy - such as seeing it with its mother in the home environment.     

born_again

To go back to the OP. Will the breeder take PayPal credit as a method of payment? While we paid via paypal for our dogs. It was a straight payment. No credit involved. 
I'm not sure that anyone one that just has a paypal account can use paypal credit as a means of payment. So might need to be business based.

>>Once you have a PayPal Credit account, you will be given the option to choose it as a payment method during the checkout process if the merchant offers it. <<

S75 is not a coverall insurance policy.

DullGreyGuy

born_again said:

Re above & the mention of Klana.
PayPal credit works in the same way. Buy now pay in instalments. 

So the water is very muddy. 🤷‍♂️

https://www.paypal.com/uk/webapps/mpp/paypal-virtual-credit?

The key is how many payments... if its 4 or more payments then its in scope for the CCA or if the agreement is for 12 months or longer. If its just 3 payments and under 12 months its outside the scope.

Its been a while since I looked at the CCA but when the rules changed and introduced the need for annual statements etc then one of the options we looked at was reducing the payments from 11 to 3 to bring them out of regulation if we didn't win the internal discussion that non-compliance wasn't a significant issue because debts are never heavily chased, we just turn off the service and block the customer from returning.