Credit card protection for online transactions
rentalforever
Forumite 92 Posts
in Credit cards
I made a purchase online with a split transaction of £200 by card and £1000 by bank transfer. The thinking here was that by paying over £100 by card would protect the whole transaction. The retailer failed to supply the goods and agreed to refund me in full.
Despite many sources citing this approach to protecting your online purchases, I have learned the hard way that it's not strictly true. The retailer refunded the card portion but has failed to return the rest despite several months of chasing. I eventually filed a Section 75 claim with my card provider and three months later got the result of their review where they're saying they can't uphold my claim for this reason:
...your transaction was submitted through a third-party business (or aggregator), Stripe. We understand that Stripe provides a service whereby businesses or individuals can accept payments without having to sign up as a merchant directly with merchant acquirers. We consider that the use of Stripe breaks the link between the Debtor, Creditor and Supplier. Therefore, regrettably, we are not in a position to consider your claim as it falls outside the scope of Section 75.
From what I can tell, Stripe is a common card processor for many retailers and there are many others like them. You probably won't see their branding anywhere as their services are used behind-the-scenes so you wouldn't know. My purchase was done through a Shopify ecommerce site which offers Stripe payment integration. The likelihood is that if you're not buying from Amazon, you're probably using a Shopify checkout system and they're probably processing the payment using Stripe.
If for any reason you need to do a split transaction, you should be aware that the cash portion is unlikely to be protected or only protected in theory and the likelihood of recovery through your card provider is unlikely. Usually for the card portions or transactions that are 100% paid for by card, the card providers are good at freezing repayment or refunding back to your card.
I have filled out a report to the Financial Ombudsman as the reasons given for not upholding my claim sounds like a dodge. If it does turn out to be a valid dodge then it's a pretty big loophole that people should be made aware of - it's a ripe opportunity for scammers to capitalise on the savvy and non-savvy alike.
Despite many sources citing this approach to protecting your online purchases, I have learned the hard way that it's not strictly true. The retailer refunded the card portion but has failed to return the rest despite several months of chasing. I eventually filed a Section 75 claim with my card provider and three months later got the result of their review where they're saying they can't uphold my claim for this reason:
...your transaction was submitted through a third-party business (or aggregator), Stripe. We understand that Stripe provides a service whereby businesses or individuals can accept payments without having to sign up as a merchant directly with merchant acquirers. We consider that the use of Stripe breaks the link between the Debtor, Creditor and Supplier. Therefore, regrettably, we are not in a position to consider your claim as it falls outside the scope of Section 75.
From what I can tell, Stripe is a common card processor for many retailers and there are many others like them. You probably won't see their branding anywhere as their services are used behind-the-scenes so you wouldn't know. My purchase was done through a Shopify ecommerce site which offers Stripe payment integration. The likelihood is that if you're not buying from Amazon, you're probably using a Shopify checkout system and they're probably processing the payment using Stripe.
If for any reason you need to do a split transaction, you should be aware that the cash portion is unlikely to be protected or only protected in theory and the likelihood of recovery through your card provider is unlikely. Usually for the card portions or transactions that are 100% paid for by card, the card providers are good at freezing repayment or refunding back to your card.
I have filled out a report to the Financial Ombudsman as the reasons given for not upholding my claim sounds like a dodge. If it does turn out to be a valid dodge then it's a pretty big loophole that people should be made aware of - it's a ripe opportunity for scammers to capitalise on the savvy and non-savvy alike.
0
Latest MSE News and Guides
Replies
As for Amazon, you only get Section 75 for products bought directly from Amazon. If it's a third party seller that is listed on Amazon's web site then I don't think you are covered.
In my experience, using paypal is often better these days.
But I only now know it's in the "grey area" because my card provider has told me the transaction was processed by Stripe. The site I bought from does not mention Stripe is the card processor, the domain never changes to anything other than the retailers own site and there's no branding or fine print that refers to Stripe. I now take the view that if the retailer uses a checkout process that looks like a Shopify system (they all look and work the same), then I'm probably not going be protected under Section 75.
Incidentally, your early statement about 'paying over £100 by card to protect the whole transaction' is a myth - paying anything on a credit card (even a penny) secures s75 protection for the whole transaction, provided all other s75 conditions are met, such as the item value exceeding £100 (but no more than £30K) and no fourth parties being present to break the D-C-S chain.
https://www.financial-ombudsman.org.uk/decision/DRN2964727.pdf
On the plus side there are cases like the above where the ombudsman has determined that some middlemen payment processors don't break the D-C-S chain
Thus could be looked at that their side of the contract was not breached.
Don't forget you still have the option of taking retailer to court to recover the £1000, which will not be that expensive.