Re: Consumer Credit Act section 75

On Mon, 16 Apr 2007 22:41:43 +0100, "tim....."
<tims_new_home@xxxxxxxxxxx> wrote:


"Peter Parry" <peter@xxxxxxxxxx> wrote

I should also add that a number of credit card issuers are also
planning to treat purchases through electronic money companies as
cash advances so there will be no interest free period as there is
for normal purchases. The customer will start paying interest to the
credit card company immediately the transaction is made.

As has already been said. My clicking on a retailer's
'checkout' and then being presented with a third party
payment company, which just happens to also be a
company that processe e-money, does not make my
purchase a money purchase.

Yes it does, that is why you don't have s75 protection. PayPal and
Nochex are not merchant processors.

What happens when you purchase goods through PayPal is that there are
two quite distinct transactions. In the first PayPal sells you a
quantity of money. Your Credit Card payment does not go to the
merchant but to PayPal.

When your CC transaction with PayPal is carried out successfully
there is a second transaction in which PayPal (not the buyer)
transfers an equivalent sum to the seller.

It isn't the Credit Card companies who have come up with a system
which deprives you of much of the protection a credit card offers but
PayPal and their like. Because they treat the primary transaction as
a fund transfer between you and them not only do you lose the s75
protection but also the contractual ability to pursue a cashback
charge against the CC company (although some still allow it).
Normally, if you order goods with a credit card and the don't turn up
you can ask your credit card company to reverse the transaction. With
a PayPal or Nochex or similar payment you cannot because the
transaction - the transfer of money from you to PayPal - was carried
out successfully. What PayPal then did with the money is not the
responsibility of the Credit Card Company.

Banks protect themselves against charge-backs with their Merchant
Service agreement which sellers wanting to take credit cards directly
have to agree to. This allows the acquiring bank to transfer
liability for payments of charge-backs to the merchant. No such
agreement (in fact no contractual agreement of any sort) exists
between the CC company and a seller using PayPal so you can hardly
expect the CC company to bear responsibility for something over which
it has no control at all.

The major issue is not so much that this situation exists but that
PayPal and similar do nothing to inform users that a payment through
them is not a credit card payment to the seller and that the
customers protection is compromised.

--
Peter Parry.
http://www.wpp.ltd.uk/
.

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