SumUp purchase treated as cash advance?!?

mouseysarah

Hi all - in case anyone wonders what happened here, I complained to NatWest and eventually had a reply from them saying they rejected my complaint but would refund the cash advance fee and interest charged so far as a goodwill gesture. The complaint rejection didn't say anything about the MCC codes or anything like that, it just repeated that there are fees and interest payable on cash advance and so it was correct that I was charged.

Since I've had the refund I don't think there's much point taking it further (although it's irritating as it means I can't use the credit card to pay for music lessons any more) but I do think it's unfair of the bank to levy a charge that it was impossible for me to know I would be subject to until the transaction has happened. I don't think it would be reasonable to expect customers in small retailers to quiz the staff on what the MCC code is before making payment and frankly I don't imagine the staff in the music shop would know if I did!

Nasqueron

HillStreetBlues said:

born_again said:

HillStreetBlues said:

Nasqueron said:

If you think about it, anyone with a suitable friend could do a cash advance on their card and then knock up an invoice saying it was a purchase and then ask the bank to refund it.

The bank can investigate if this has happened or not. A bank certainly can't rule out all evidence their customer might provide of the off chance  that it might be fake. 

Nothing to investigate other than looking at MCC. That is all the banks has to do. If a retailer miss reports, then that is their issue, not the banks.

Not if the bank makes the charge to their customer. It's a certain lose for the bank if they just point to the retailer and says it's their fault.

The bank would win the FOS case as they were charging as they were told to*

The MCC code causes the charge
The shop sends the MCC code to the bank
The bank is allowed to charge for any transaction under any MCC code they classify as cash per their terms
Again, the bank did nothing wrong, the retailer is at fault for causing the charge by using the wrong MCC

As I predicted earlier, the bank did indeed refund the charges as it's cheaper than arguing the case with the customer as it'll be a small sum and OP got the desired outcome.

100% they will apply the charge again if the OP uses the shop again and gets the same MCC presented, end of story.

*see FOS case DRN-363715 for example where the FOS (at adjudicator and ombudsman stage) agreed with Revolut about cash advance charges being applied and them not being responsible for them due to the MCC code they presented resulting in charges by his bank

*see also FOS case DRN-2884531 which is similar - Monzo were taken to the FOS for allowing gambling transactions, they won the case (again both at adjudicator and ombudsman) because the company the complainant used to gamble gave the wrong MCC code meaning a gambling transaction went through - again, it was not the fault of the card provider processing payment using correct MCC codes

molerat

What description does your statement give for the service supplied / seller ?  Most likely found in your on line account.

DullGreyGuy

km1500 said:

a customer, when they apply for a credit card, signs the terms and conditions and any reasonable person if a customer buys something with the reasonable expectation that this is an ordinary credit transaction then they should not be charged a cash advance fee and should complain

Yes and no @km1500

The "no" is in relation to the fact the customer has to consider what transaction is really happening. So the other day we had a "Cash Advance" complaint on here with the person saying they'd bought a telly (or something, can't remember) and had been charged as a Cash Advance. When we dug into it they had actually bought the telly using Klana 0% credit and then paid one of the instalments using a credit card. Repaying a loan is reasonably a cash advance.

So yes, they don't need to understand the MCC mechanism etc but they need to realise repaying a instalments isn't the same as buying a physical product. A similar thing can potentially be said about using payment intermediaries like PayPal... you are technically paying PayPal to pay the merchant not paying the merchant "directly" hence the S75 issue 

born_again

mouseysarah said:

Hi all - in case anyone wonders what happened here, I complained to NatWest and eventually had a reply from them saying they rejected my complaint but would refund the cash advance fee and interest charged so far as a goodwill gesture. The complaint rejection didn't say anything about the MCC codes or anything like that, it just repeated that there are fees and interest payable on cash advance and so it was correct that I was charged.

Since I've had the refund I don't think there's much point taking it further (although it's irritating as it means I can't use the credit card to pay for music lessons any more) but I do think it's unfair of the bank to levy a charge that it was impossible for me to know I would be subject to until the transaction has happened. I don't think it would be reasonable to expect customers in small retailers to quiz the staff on what the MCC code is before making payment and frankly I don't imagine the staff in the music shop would know if I did!

I would have a word with music shop & get them to check that the sum-up device is registered for the correct MCC.

Bank can only go by info provided to them by retailer, and description on statement is not one of the criteria that is used.

As usual in these case a simple request about charges & saying you were not aware given the purchase made, often gets the same result 1st time. Without the stress of a complaint 👍

prowla

I've used my card with several SumUp merchants and have never seen a cash transaction; if it did happen, I would likely decline SumUp in future.

It seems curious that a shop could charge a cash transaction (ie. they had given the customer cash) for goods.

HillStreetBlues

Nasqueron said:

HillStreetBlues said:

born_again said:

HillStreetBlues said:

Nasqueron said:

If you think about it, anyone with a suitable friend could do a cash advance on their card and then knock up an invoice saying it was a purchase and then ask the bank to refund it.

The bank can investigate if this has happened or not. A bank certainly can't rule out all evidence their customer might provide of the off chance  that it might be fake. 

Nothing to investigate other than looking at MCC. That is all the banks has to do. If a retailer miss reports, then that is their issue, not the banks.

Not if the bank makes the charge to their customer. It's a certain lose for the bank if they just point to the retailer and says it's their fault.

*see FOS case DRN-363715 for example where the FOS (at adjudicator and ombudsman stage) agreed with Revolut about cash advance charges being applied and them not being responsible for them due to the MCC code they presented resulting in charges by his bank

The decision backs up my view, in that case Mr V went after Revolut, he should have gone after the credit card company, that's why he lost.
It is even stated as stated as such.

Ultimately it is for each credit card provider to decide what they charge for certain types of

payments, and how they categorise them according to their fee structure. Mr V’s credit card
provider set its own fee structure in its terms and conditions. So I’m not holding Revolut
liable for the fees the credit card provider charged Mr V, since how a credit card provider
categorises certain payments is not something in the control of Revolut, nor indeed is it the
responsibility of Revolut.

The credit card company is in this case is the Natwest bank, so as the bank provided the CC they are at fault.

born_again

HillStreetBlues said:

Nasqueron said:

HillStreetBlues said:

born_again said:

HillStreetBlues said:

Nasqueron said:

If you think about it, anyone with a suitable friend could do a cash advance on their card and then knock up an invoice saying it was a purchase and then ask the bank to refund it.

The bank can investigate if this has happened or not. A bank certainly can't rule out all evidence their customer might provide of the off chance  that it might be fake. 

Nothing to investigate other than looking at MCC. That is all the banks has to do. If a retailer miss reports, then that is their issue, not the banks.

Not if the bank makes the charge to their customer. It's a certain lose for the bank if they just point to the retailer and says it's their fault.

*see FOS case DRN-363715 for example where the FOS (at adjudicator and ombudsman stage) agreed with Revolut about cash advance charges being applied and them not being responsible for them due to the MCC code they presented resulting in charges by his bank

The decision backs up my view, in that case Mr V went after Revolut, he should have gone after the credit card company, that's why he lost.
It is even stated as stated as such.

Ultimately it is for each credit card provider to decide what they charge for certain types of

payments, and how they categorise them according to their fee structure. Mr V’s credit card
provider set its own fee structure in its terms and conditions. So I’m not holding Revolut
liable for the fees the credit card provider charged Mr V, since how a credit card provider
categorises certain payments is not something in the control of Revolut, nor indeed is it the
responsibility of Revolut.

The credit card company is in this case is the Natwest bank, so as the bank provided the CC they are at fault.

That is not what the ombudsman said...🤦‍♀️

Ultimately it is for each credit card provider to decide what they charge for certain types of

payments, and how they categorise them according to their fee structure. Mr V’s credit card
provider set its own fee structure in its terms and conditions.

Makes no mention of fault. Only their policy 👍

HillStreetBlues

born_again said:

HillStreetBlues said:

Nasqueron said:

HillStreetBlues said:

born_again said:

HillStreetBlues said:

Nasqueron said:

If you think about it, anyone with a suitable friend could do a cash advance on their card and then knock up an invoice saying it was a purchase and then ask the bank to refund it.

The bank can investigate if this has happened or not. A bank certainly can't rule out all evidence their customer might provide of the off chance  that it might be fake. 

Nothing to investigate other than looking at MCC. That is all the banks has to do. If a retailer miss reports, then that is their issue, not the banks.

Not if the bank makes the charge to their customer. It's a certain lose for the bank if they just point to the retailer and says it's their fault.

*see FOS case DRN-363715 for example where the FOS (at adjudicator and ombudsman stage) agreed with Revolut about cash advance charges being applied and them not being responsible for them due to the MCC code they presented resulting in charges by his bank

The decision backs up my view, in that case Mr V went after Revolut, he should have gone after the credit card company, that's why he lost.
It is even stated as stated as such.

Ultimately it is for each credit card provider to decide what they charge for certain types of

payments, and how they categorise them according to their fee structure. Mr V’s credit card
provider set its own fee structure in its terms and conditions. So I’m not holding Revolut
liable for the fees the credit card provider charged Mr V, since how a credit card provider
categorises certain payments is not something in the control of Revolut, nor indeed is it the
responsibility of Revolut.

The credit card company is in this case is the Natwest bank, so as the bank provided the CC they are at fault.

That is not what the ombudsman said...🤦‍♀️

Ultimately it is for each credit card provider to decide what they charge for certain types of

payments, and how they categorise them according to their fee structure. Mr V’s credit card
provider set its own fee structure in its terms and conditions.

Makes no mention of fault. Only their policy 👍

I agree with the ombudsman we share the same view.
Their fee structure is not to have any for the OP purchase, so should be categorise as such.
The Ombudsman makes it very clear it's the fee that determines the category, but in the OP's case,  it's the  category that has determining the fee, and that is the wrong way round.
   

born_again

HillStreetBlues said:

I agree with the ombudsman we share the same view.
Their fee structure is not to have any for the OP purchase, so should be categorise as such.
The Ombudsman makes it very clear it's the fee that determines the category, but in the OP's case,  it's the  category that has determining the fee, and that is the wrong way round.
   

The category of the retailer is not set by the credit card co, so all they can do is take the data given against the data they use for fee's.
Retailer needs to take it up with either sumup, or their merchant bank who set the category.