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Thread: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

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    Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    I tend to use Paypal quite a bit these days, but I'm just wondering how I would stand if I were to buy an item over £100 & pay for it using my credit card, but through Paypal? I assume that I'd be covered under section 75 of the CCA, - so if the item is misrepresented, or the company I buy it from goes out of business, I can get my money back - but is this still the case when using Paypal? Paypal do offer their own guarantees of course, but there is an upper limit of £500 I think. Does the fact that I'm using Paypal as an intermediary make any difference?

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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    I'm about 99% sure you won't be covered.

    You aren't paying for goods (the "item" you mentioned) with a credit card, but with PayPal. The credit card company therefore aren't a party to the contract for goods, and aren't jointly liable.

    You have, if you like, two contracts in play ...

    1) You and the seller, for the goods, with PayPal as paying mechanism.

    2) You and PayPal for a service, that is, paying for stuff, with your credit card funding THAT, not the purchase of goods.

    I am not a lawyer, and I stand to be proven wrong, but as far as I remember, this point is clearly established and you aren't covered.

    But if in doubt, why not ask your credit card company?

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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    Quote Originally Posted by Saracen View Post
    But if in doubt, why not ask your credit card company?
    That would be the best advice as it does seem like a grey area, but PayPal usually work by paying funds into your PayPal account and then paying the vendor from there. The analogy would be getting cash out of a machine using your credit card and paying for goods with the cash.

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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    Thanks for the info, I will check with my credit card company. It's another good reason NOT to use Paypal, anyway

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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    From my experience you are covered by your credit card company although your mileage may vary as always... A good few years back I bought a laptop through eBay and paid by Paypal which deducted the amount from my Barclaycard. The laptop was faulty and was returned. However, the seller did not refund the cash and Paypal suddenly said that I was only due back the "maximum they could refund" of £200 (out of £420). No surprisingly I wasn't happy and phoned up Barclaycard who refunded me the difference of £220.

    That was about ten years ago now so the average credit card company may well have changed their stance.
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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    As above. If I remember the t&c's correctly it will state that you are covered for goods and services you directly pay for with the card.

    You could claim it back through your CC company (as paypal provide a shielded payment service) but paypal would then be chasing you for the payment the CC company have claimed back.

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    Re: Credit card payments through Paypal, & Section 75 of Consumer Credit Act

    A lawyer friend tells me that you MIGHT be covered, because a year or so ago, Paypal changed arrangements with a lot of supplidrs via a Commercial Entity Agreement, and that that links Paypal and the supplier, meaning in my earlier example, the link is now CC company to Paypal supplier, rather than PayPal being a cut-out between CC company and supplier.

    So IF the payment goes direct to the supplier, AND a CEA is in place you should be covered.

    In other words, it's a definite maybe.

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