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Manxman_in_exile

eskbanker said:

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.

To help me understand better can you explain the justification for the condition that a chargeback is not available where there is proof of delivery - even though that proof of delivery conclusively demonstrates that the trader delivered to the wrong address?

The consumer is out of pocket through no fault of their own - the trader being at fault - but if payment was made by debit card, chargeback will not refund the consumer.

That seems a pretty arbitrary restriction to me, and I'm not sure what the logical rationale behind it is.  But if there is one, I'd love to know what it is.

Nor am I convinced of its "near equivalence to s75 in terms of the practicalities of consumer protection" given, for example, (1) the above scenario and (2) that claims for a faulty item can't be made after initial inspection has revealed no problems.  Whereas under s75 the consumer could still have a claim against their credit card provider under the CRA irrespective of what was apparent on delivery.

I wouldn't deny that chargeback offers the consumer some protection on purchases costing under £100 (and possibly over £30,000) but I think that to say it is nearly equivalent to s75 protection is more than a bit over-enthusiastic.

For purchases protected by s75 I think a consumer would need to be "seriously confused" to choose to pay by debit card if they had the option to pay by credit card.  If they were almost equivalent you could "nearly" afford to toss a coin to choose between the two.

[Edit:  Also there's no danger of being sued after you've been successful with a s75 claim]

eskbanker

Manxman_in_exile said:

To help me understand better can you explain the justification for the condition that a chargeback is not available where there is proof of delivery - even though that proof of delivery conclusively demonstrates that the trader delivered to the wrong address?

The consumer is out of pocket through no fault of their own - the trader being at fault - but if payment was made by debit card, chargeback will not refund the consumer.

That seems a pretty arbitrary restriction to me, and I'm not sure what the logical rationale behind it is.  But if there is one, I'd love to know what it is.

Point taken, I have no idea about why that quirk exists and agree that it seems arbitrary!

Manxman_in_exile said:

Nor am I convinced of its "near equivalence to s75 in terms of the practicalities of consumer protection" given, for example, (1) the above scenario and (2) that claims for a faulty item can't be made after initial inspection has revealed no problems.  Whereas under s75 the consumer could still have a claim against their credit card provider under the CRA irrespective of what was apparent on delivery.

I wouldn't deny that chargeback offers the consumer some protection on purchases costing under £100 (and possibly over £30,000) but I think that to say it is nearly equivalent to s75 protection is more than a bit over-enthusiastic.

I'd still see those two examples as being relatively niche though and was really comparing the primary high level features rather than getting down into that sort of detail, although as you point out some of these favour chargeback over s75, in that as well as the lack of value constraints there's also none of the D-C-S chain stuff.  There is also the benefit that some payments can only be made by debit card rather than credit card.

Manxman_in_exile said:

For purchases protected by s75 I think a consumer would need to be "seriously confused" to choose to pay by debit card if they had the option to pay by credit card.  If they were almost equivalent you could "nearly" afford to toss a coin to choose between the two.

I'm not sure where you're quoting "seriously confused" from, but yes, I agree that paying by credit card gives the choice and would be the obvious route to keeping one's options open, but I was (and am) challenging the notion expressed earlier that debit card payments entail "little or no protection".

Manxman_in_exile said:

[Edit:  Also there's no danger of being sued after you've been successful with a s75 claim]

I wouldn't go so far as to say no danger, but agree that it's much more likely with chargeback - I'm sure I've seen a thread on here recently where a merchant was pursuing a customer after a s75 claim, the implication being that the card provider had (unusually) recovered costs from the merchant.

Manxman_in_exile

eskbanker said:

I'm not sure where you're quoting "seriously confused" from, but yes, I agree that paying by credit card gives the choice and would be the obvious route to keeping one's options open, but I was (and am) challenging the notion expressed earlier that debit card payments entail "little or no protection".

I worked for 25 years in a NHS psychiatric hospital.  It's a familiar euphemism I hoped would get by the forum censors!  

Apart from that I understand the points you try to make.

I'm simply not a fan of chargeback...

eskbanker

Manxman_in_exile said:

I'm simply not a fan of chargeback...

Fair enough - I wasn't actually trying to evangelise about it, but just wanted to ensure that OP was aware that, as the only protection open to them for this >£30K purchase (other than arranging purchase-specific financing to qualify for s75a), it's not likely to be far behind s75 in terms of its value in protecting this spend.

In other words, the answer to

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

is very much 'yes' to paying by card, contrary to what OP was initially advised!

Manxman_in_exile

Yes.

In this case you might need to be "seriously confused" to use a credit card rather than a debit card.  (Assuming the builder will accept it...)

HillStreetBlues

A question I've thought of.

As I understand it if someone build a dolls house and the 4 sides cost £25 and the roof £25, then S75 wouldn't apply as each item is under £100. But if it was bought as a kit for £125 then it would be covered.

So if "shed" is billed as £40k  then no S75
But if it's broken down in stages and nothing over £30k then would it be covered?

Manxman_in_exile

Shouldn't you be recuperating rather than asking questions that are too difficult for a Friday evening?

(But you might be right.  I suppose it depends on how the work or the invoice is broken up - if at all - into constituent parts.  I don't really know a lot about how the upper and lower limits apply in s75 claims)

eskbanker

HillStreetBlues said:

A question I've thought of.

As I understand it if someone build a dolls house and the 4 sides cost £25 and the roof £25, then S75 wouldn't apply as each item is under £100. But if it was bought as a kit for £125 then it would be covered.

So if "shed" is billed as £40k  then no S75
But if it's broken down in stages and nothing over £30k then would it be covered?

This has come up before, typically in the context of new kitchens, and my recollection is that, despite s75 clearly applying at item level, a cohesive job entailing the purchase and fitting of many parts will generally be considered at total job level.

Edit: here's one of the threads I was thinking of, where the issue is debated:

https://forums.moneysavingexpert.com/discussion/6376775/section-75-can-i-claim-if-total-is-30k-but-on-two-separate-credit-cards

born_again

Alderbank said:

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).

Another statement that is wrong. 🤷‍♀️
How do you think that people get refunded using chargebacks when companies go bust? Do you hear of them all going to court?

The funds come from the retailers merchant bank. How they get it back. I have no idea, not my side of the system.

born_again

Manxman_in_exile said:

Yes.

In this case you might need to be "seriously confused" to use a credit card rather than a debit card.  (Assuming the builder will accept it...)

Chargeback is the same on Debit & Credit cards, so either will do.
Just Op will have no S75

Bank transfer = Just like giving cash.