Deposit

Christie

Morning 😃 
Looking for a bit of advice on the safest way to  pay large deposit. 
We are having a large shed with internal stables built, it is not a standard size, bespoke, and I totally understand why the manufacturer wants a 50% deposit. What I need to know is what is the safest way to pay. Would using a debit card / credit card or bank transfer give me any security if it all went wrong. TIA

Undervalued

Christie said:

Morning 😃 
Looking for a bit of advice on the safest way to  pay large deposit. 
We are having a large shed with internal stables built, it is not a standard size, bespoke, and I totally understand why the manufacturer wants a 50% deposit. What I need to know is what is the safest way to pay. Would using a debit card / credit card or bank transfer give me any security if it all went wrong. TIA

Only using a credit card would protect you against the firm going bust etc as, with a credit agreement the credit card company is jointly liable. A debit card or bank transfer give you little or no protection.

soolin

Are you buying as a consumer or as part of a business? Also what sort of price (ball park figure) as that can make a difference 

If a consumer then a card is the best way, a bank transfer is basically just handing them cash. If they don't want to take the whole 50% on the card then see if they will take a part payment by credit card , at least £100 and the rest by other means.

Christie

The full cost is £40,000
Not a business, just for domestic use, replacing an old stable block.
The company has a lot of good reviews and seem decent but I have seen a couple of bad rebiews and it makes me a bit wary lol.
Saying that almost every other place I looked had a couple of bad reviews too.

Manxman_in_exile

If it's £40 grand I don't think s75 credit card protection will cover it.

I think the upper limit is £30k?

I don't think either a credit or debit card will give any protection.

But I'm sure others will know for sure...

[Edit:  Yeah, £40k is too much for s75 protection

75  Liability of creditor for breaches by supplier.

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor...

(3) Subsection (1) does not apply to a claim—

...

(b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000 ...  ]

eskbanker

Undervalued said:

Only using a credit card would protect you against the firm going bust etc as, with a credit agreement the credit card company is jointly liable. A debit card or bank transfer give you little or no protection.

Manxman_in_exile said:

If it's £40 grand I don't think s75 credit card protection will cover it.

I think the upper limit is £30k?

I don't think either a credit or debit card will give any protection.

But I'm sure others will know for sure...

I don't believe that there's any upper value limit for chargeback claims, so that should be a viable alternative to s75, and is available if paying by credit or debit card, offering protection against the company folding, non-delivery, faulty goods/services, etc, etc:

https://www.moneysavingexpert.com/reclaim/visa-mastercard-chargeback/

It may not be a statutory right in the way that s75 is, and has some limitations on time (claim within 120 days) and value (card payment value only not entire item cost), but is a very useful option to have, and certainly offers way more protection than a bank transfer.

Manxman_in_exile

Thanks

I did wonder if chargeback had an upper limit but - as you may be aware - I don't like chargeback very much and try to know as little about it as possible.

If there is no upper limit then a debit card payment might be the best option (so long as it's built at the correct address!     )

Of course the builder might also be reluctant to allow full payment on a debit card if he knows it might leave him open to chargeback...


[Edit: I find the conditions applied to chargeback a bit (shall we say?) arbitrary.  If I were the OP I think I'd want to confirm with my bank/card provider in advance that I'd be eligible for chargeback protection.  Perhaps @born_again might be able to advise]

eskbanker

Manxman_in_exile said:

Edit: I find the conditions applied to chargeback a bit (shall we say?) arbitrary.  If I were the OP I think I'd want to confirm with my bank/card provider in advance that I'd be eligible for chargeback protection.  Perhaps @born_again might be able to advise

Arbitrary in what way?  Both s75 and chargeback are subject to a variety of conditions, many of which aren't especially transparent, e.g. s75's requirement for the unbroken debtor-creditor-supplier chain comes as a surprise to many (despite being mentioned in the legislation), but I have to say that I do find some of the comments about chargeback are far more dismissive than they ought to be, given its near equivalence to s75 in terms of the practicalities of consumer protection.

born_again

Undervalued said:

Christie said:

Morning 😃 
Looking for a bit of advice on the safest way to  pay large deposit. 
We are having a large shed with internal stables built, it is not a standard size, bespoke, and I totally understand why the manufacturer wants a 50% deposit. What I need to know is what is the safest way to pay. Would using a debit card / credit card or bank transfer give me any security if it all went wrong. TIA

Only using a credit card would protect you against the firm going bust etc as, with a credit agreement the credit card company is jointly liable. A debit card or bank transfer give you little or no protection.

Sorry but you are wrong.
Using either a debit or credit card gives you chargeback option with would cover non receipt of goods ( No limit )

In OP's case only S75A might come into play, 

S.75A does not apply where “the cash value of the goods or service is £30,000 or less” (s.75A(6)(a)), or (subject to one irrelevant exception) where “the linked credit agreement is for credit which exceeds £60,260”.

So, in broad terms, s.75A has effect in a £30,000 to £60,260 band. Using a CC is not linked Credit agreement

Alderbank

Establishing liability might not be a problem but actually extracting the money from a small company is often the sticking point.
That is the beauty of s75, the bank is jointly liable and has deep pockets.

Banks don't bother about an upper limit for chargeback because it is not their money which is at risk. It is just a transaction where they transfer funds from the trader's bank account to yours. If there's no money there, or not enough, then your only recourse would be to the courts against that trader with the empty bank account.

The best way to manage risk with a project of this size is tight financial control by the project manager. Usually this would be a combination of paying in stages for materials and ensuring that title in the materials passes to the client, and paying for labour in arrears after confirming each stage has been completed as per contract.
If I were project manager here I would be proactive, making several visits to their premises during construction and watching invoices closely.

Trying to recover afterwards might be a case of bolting the stable door (if they had even got round to making the stable door).

eskbanker

Alderbank said:

Banks don't bother about an upper limit for chargeback because it is not their money which is at risk. It is just a transaction where they transfer funds from the trader's bank account to yours. If there's no money there, or not enough, then your only recourse would be to the courts against that trader with the empty bank account.

My understanding was that the card-issuing bank reclaims the funds from the merchant's acquiring bank, but that this isn't subject to there being an adequate balance as such, i.e. if there isn't then the merchant's bank would ultimately take the hit rather than the customer.  In other words, I'm not aware of 'insufficient funds' being a reason for an attempted chargeback claim to fail, but happy to be corrected if this isn't the case....