An added Paypal question
FoggyTown
protection afforded by credit cards? Is Paypal the first stop for
redress? Is the CC protection still available if the payment is
through Paypal?
Fran
"FoggyTown" <fogg...@aol.com> wrote in message
news:fff80a59-ea88-436c...@21g2000yqj.googlegroups.com...
No formal relationship at all. I do both if I'm at all twitchy. Some CCs
offer protection, some count it as a cash advance or weasel out in some
other way.
Peter Crosland
news:fff80a59-ea88-436c...@21g2000yqj.googlegroups.com...
If you paid via PayPal then they are the people you should approach first.
PayPal transactions give specific protecion as set out in their terms and
conditions. Remember that your credit card only gives protection, for
transactions of �100 or more.
Peter Crosland
Peter Parry
<fogg...@aol.com> wrote:
>Is the CC protection still available if the payment is
>through Paypal?
There is no statutory (Consumer Credit Act S75) protection for a
purchase if the payment is via Paypal. Your credit card may have some
contractual protection scheme which may cover purchases via Paypal but
you would need to read the T's&C's.
Peter Crosland
news:8uo4j51vsnke89rl6...@4ax.com...
> On Tue, 22 Dec 2009 06:58:08 -0800 (PST), FoggyTown
> <fogg...@aol.com> wrote:
>
>>Is the CC protection still available if the payment is
>>through Paypal?
>
> There is no statutory (Consumer Credit Act S75) protection for a
> purchase if the payment is via Paypal.
Really? Care to explain why?
Peter Crosland
Peter Parry
Because you are buying e-money from Paypal and then spending it. Much
the same as when you go to a cash machine, get cash and then spend it.
Any purchase you make with the cash is not covered by S75. Your
credit card company completed the transaction with you successfully
when you bought PayPal's e-money.
Peter Crosland
Thanks for the reference that I note is some four years old. If, as I
suspect, a large percentage of PayPal transactions are under �100 then they
would not be covered by S75 anyway. As I recall PayPal have altered their
terms significantly in that time as far as goods bought through eBay are
concerned as they are now offering more than a simple transfer of money that
is described in the reference above. It seems to me that PayPal are acting
as agents of the seller rather than just a means of transferring funds from
buyer to seller. When I make a purchase via PayPal this is regarded by my
credit card company as a normal purchase and crucially not as a cash
advance. Furthermore my credit card company have confirmed that they do not
regard purchases through PayPal as cash transactions but if one wished to
just transfer money via PayPal then this would be. About a year ago when a
supplier went bust I was successful in claiming from my credit card company
without any need to resort to litigation, or even the threat of it. So my
contention is that using PayPal as an intermediary when buying on eBay does
not remove the normal protection one enjoys by using a credit card for
Peter Parry
<g6...@yahoo.co.uk> wrote:
>"Peter Parry" <pe...@wpp.ltd.uk> wrote
>> Because you are buying e-money from Paypal and then spending it. Much
>> the same as when you go to a cash machine, get cash and then spend it.
>> Any purchase you make with the cash is not covered by S75. Your
>> credit card company completed the transaction with you successfully
>> when you bought PayPal's e-money.
>>
>> http://www.wider-implications.info/case_studies/wi_03.html
>
>Thanks for the reference that I note is some four years old.
I can't imagine they feel it necessary to repeat the process unless
something changes. If the situation had changed I imagine Paypal
would have been first in the queue to ask them to revisit that ruling.
>As I recall PayPal have altered their
>terms significantly in that time as far as goods bought through eBay are
>concerned as they are now offering more than a simple transfer of money that
>is described in the reference above. It seems to me that PayPal are acting
>as agents of the seller rather than just a means of transferring funds from
>buyer to seller.
Nope, they are acting (as they quite clearly state) as an e-money
supplier. Doing that does not prevent them offering parallel
services.
>When I make a purchase via PayPal this is regarded by my
>credit card company as a normal purchase and crucially not as a cash
>advance.
Some credit card companies do consider it as a cash advance and treat
it as so, others do not. It is of no significance.
>Furthermore my credit card company have confirmed that they do not
>regard purchases through PayPal as cash transactions but if one wished to
>just transfer money via PayPal then this would be.
Some see a commercial advantage in not doing so (as I said). However
that means your cover is contractual rather than statutory.
>. So my
>contention is that using PayPal as an intermediary when buying on eBay does
>not remove the normal protection one enjoys by using a credit card for
>transactions of �100 or more.
Your contention is wrong. While there are a number of mechanisms
which might still protect a buyer such as the ability to institute a
chargeback or contractual cover the fact remains that there is no
statutory S75 protection for payment made through Paypal or similar
e-money vendors.
Peter Crosland
news:MPG.259dace97...@news.virginmedia.com...
> So my contention is that using PayPal as an intermediary when
> buying on eBay does not remove the normal protection one enjoys
> by using a credit card for transactions of �100 or more.
>With the greatest of respect, your contention is as relevant as PayPal
>changing their terms and conditions are. Neither supercedes UK law or
>construes any form of legal precedent.
>Some CC companies *will* make refunds through S75 for PayPal, that is
>not disputed, what is disputed is that they are obligated to. Some
>companies have decided not to - resulting in consumers trying to take
>further action to force them, with the end result being that every
>single case that has been brought before the Financial Ombudsman has
>failed.
>If you wish to view that as evidence that S75 protection is guaranteed,
>that's your perogative. To me however, it merely states that there is a
>good chance they *will* refund, but if they decide not to (which they
>appear to be well within their rights to do), well, you're fk'ed :)
I don't think so! Neither do I think a major credit card company would
routinely pay up if they did not think that they did have an obligation
under S75. The crucial point is what the payment to PayPal is for. The
example cited stated that the buyer paid the amount with his credit card to
PayPal and then PayPal paid the money to the seller. If that were the case
then it would be a simple money transfer and S75 would not apply. However,
what happens now with eBay purchases, is that when the buyer pays Paypal for
the item with their credit card PayPal offers certain guarantees as well as
passing the funds, minus their fee, to the seller. This change of the way
PayPal handles payments is crucial. Hence it seems to me that under the new
PayPal rules the payment by the buyer is a normal purchase rather than a
simple money transfer.
As for the question of precedent perhaps you can provide a cite for the
cases that have been decided by the Financial Ombudsman in the way you
claim.
Peter Crosland
Peter Parry
<g6...@yahoo.co.uk> wrote:
>I don't think so! Neither do I think a major credit card company would
>routinely pay up if they did not think that they did have an obligation
>under S75.
Of course they do. They perceive it as offering a commercial benefit
which makes them more attractive to card holders. It is no different
from the "free" insurance on purchases some offer.
>The crucial point is what the payment to PayPal is for. The
>example cited stated that the buyer paid the amount with his credit card to
>PayPal and then PayPal paid the money to the seller.
That is exactly what happens and is what e-money is all about.
>If that were the case
>then it would be a simple money transfer and S75 would not apply.
It isn't a money transfer as e-money is covered by separate
legislation. However it does mean S75 does not apply.
>However,
>what happens now with eBay purchases, is that when the buyer pays Paypal for
>the item with their credit card PayPal offers certain guarantees as well as
>passing the funds, minus their fee, to the seller. This change of the way
>PayPal handles payments is crucial.
There is no change, it is still a simple e-money transaction. Extra
contractual guarantees offered to encourage people to use the e-money
service do not alter the nature of the service. No matter what Paypal
may do it does not establish the essential debtor-creditor-supplier
relationship between the card issuer and supplier of goods.
Transactions involving an 'electronic money institution', i.e. Paypal,
are a four-party transaction, involving the cardholder (debtor), the
card issuer (creditor), the electronic money institution (supplier of
remittance), who then forwards the funds to the supplier of goods
(supplier/seller).
For section 75 to apply there has to be a "debtor-creditor-supplier"
agreement involving an actual or contemplated pre-existing
'arrangement' between the card issuer and the supplier.
The card issuers relationship is with Paypal as an e-money supplier,,
Paypal fulfil their obligations by forwarding the funds to the seller
of the goods. The card issuer has no relationship with the seller of
the goods so S75 cannot apply.
Peter Crosland
--
Peter Crosland
"Peter Parry" <pe...@wpp.ltd.uk> wrote in message
news:9ac7j5dqkhivdvvjv...@4ax.com...
The PayPal agreement for payment for eBay purchases is quite distinct from
that when PayPal are providing separate electronic money transfers. Hence
most of your comments above are meaningless and irrelevant nonsense.
Peter Crosland
Fran
"Peter Crosland" <g6...@yahoo.co.uk> wrote in message
news:HM6dnQQ23N14FavW...@brightview.co.uk...
> The PayPal agreement for payment for eBay purchases is quite distinct from
> that when PayPal are providing separate electronic money transfers. Hence
> most of your comments above are meaningless and irrelevant nonsense.
>
You'd know all about that.
petrolcan
The Older Gentleman
Anti-racist rant imminent!
--
BMW K1100LT Ducati 750SS Honda CB400F Triumph Street Triple
Suzuki TS250ER GN250 Damn, back to six bikes!
Try Googling before asking a damn silly question.
chateau dot murray at idnet dot com
petrolcan
Older Gentleman says...
>
> petrolcan <petrol...@gmail.com> wrote:
>
> > In article <hh61gv$qrp$1...@news.eternal-september.org>, Fran says...
> > >
> > > "Peter Crosland" <g6...@yahoo.co.uk> wrote in message
> > > news:HM6dnQQ23N14FavW...@brightview.co.uk...
> > >
> > > > The PayPal agreement for payment for eBay purchases is quite distinct from
> > > > that when PayPal are providing separate electronic money transfers. Hence
> > > > most of your comments above are meaningless and irrelevant nonsense.
> > > >
> > >
> > > You'd know all about that.
> >
> > Pot/kettle interface overload!
>
> Anti-racist rant imminent!
Don't you just love his smugness.
Peter Parry
<g6...@yahoo.co.uk> wrote:
>"Peter Parry" <pe...@wpp.ltd.uk> wrote in message
It would be helpful if you could both use a sig separator at the end
of the text parts of your message and not place one at the beginning
of the text of some of your messages.
>> Your contention is wrong. While there are a number of mechanisms
>> which might still protect a buyer such as the ability to institute a
>> chargeback or contractual cover the fact remains that there is no
>> statutory S75 protection for payment made through Paypal or similar
>> e-money vendors.
>
>The PayPal agreement for payment for eBay purchases is quite distinct from
>that when PayPal are providing separate electronic money transfers.
What PayPal are offering in the way of extra services is irrelevant.
What matters, as far as the Consumer Credit Act is concerned, is the
relationship between the buyers credit card company and the seller.
In any event the PayPal agreement linked from
Http://pages.ebay.co.uk/paypal/
and
both lead to the identical document
Here is an extract :-
"1.1 PayPal is only a Payment Service Provider.
PayPal�s main business is the issuance of E-money and the provision of
services closely related to the issuance of E-money. A description of
the main characteristics of the PayPal Service is set out in the Key
Payment and Service Information document which is accessible via the
Legal Agreements link of each page of the PayPal website(s). Since the
service is limited to E-money, which does not qualify as a deposit or
an investment service in the sense of the Law, you are not protected
by the Luxembourg deposit guarantee schemes provided by the
Association pour la Garantie des D�p�ts Luxembourg (AGDL). PayPal
enables you to make payments to and accept payments from third
parties. PayPal is an independent contractor for all purposes. PayPal
does not have control of nor assumes the liability or legality for the
products or services that are paid for with our Service."
Now that clearly states Paypal is simply an e-money provider.
They amplify this in their "Key Payment and Service Information"
document at :-
"What is PayPal?
PayPal enables individuals and businesses to send and receive
electronic money online....
"Funding an account
To fund an account, a User must ...:
Purchase electronic money from us via their funding source(s). In
practice, this means that each time a User requests PayPal to send
money, PayPal simultaneously debits the chosen amount from the User�s
default funding source (PayPal balance, bank account, debit card or
credit card). PayPal then sends this online payment to the intended
recipient...
To send a payment to a third party via the Service, a User usually
provides the email address of the intended recipient (the
�recipient�). By doing so, the User sending the payment (the �sender�)
instructs us to transfer electronic money from their PayPal account to
the account of the recipient. If the payment is accepted by the
recipient, we complete the transfer..."
That makes it fairly clear what PayPal is and what it is not. It makes
it clear the money goes from your credit card to your Paypal account
and then from your PayPal account to the seller. It does _not_ go
directly from you to the seller.
There is no "debtor-creditor-supplier" relationship between the buyers
credit card company and the seller of goods. Without such a
relationship S75 cannot apply..
Extra features of the service do not alter this fundamental aspect of
the e-money service in any way.
>Hence
>most of your comments above are meaningless and irrelevant nonsense.
Would care are to elaborate?
Peter Parry
wrote:
>Would care are to elaborate?
Or even "Would you care to elaborate"
Peter Crosland
>> >If you wish to view that as evidence that S75 protection is guaranteed,
>> >that's your perogative. To me however, it merely states that there is a
>> >good chance they *will* refund, but if they decide not to (which they
>> >appear to be well within their rights to do), well, you're fk'ed :)
>>
>> I don't think so!
>
>
>> Neither do I think a major credit card company would routinely pay up
>> if they did not think that they did have an obligation under S75.
>
> moment it's not clearly defined under any actual legislation, making a
> fuss about it would bring it under closer scrutiny and possibly alter
> the situation. At the moment they get to use discretion, and that's
> always preferable to being forced to do something...
>
>> As for the question of precedent perhaps you can provide a cite for
>> the cases that have been decided by the Financial Ombudsman in the
>> way you claim.
>
> yourself, nor do I feel the need to search for and provide you with
> evidence for something that is already well known. Suffice it to say
> that, should you be so inclined to search for yourself, you will find
> that the Financial Ombudsman says that S75 does not cover PayPal, and
> also that PayPal has *voluntarily* agreed to abide by the decisions that
> the Financial Ombudsman makes - even though they are not legally
> required to.
The reason I asked for a cite was that the decision previously listed
referred to a time when the PayPal service via was, AFAIK, a purely an
electronic money transfer. The crucial point is that now PayPal option of
settling eBay transactions is quite different i.e. in offers protection
against certain seller defaults as well as payment to the seller. AFAIK this
current PayPal system has not been ruled on by the ombudsman and that was
what I was asking about. As the question of how credit card companies treat
payments to PayPal if they don't treat them as cash transactions then it is
difficult to see how they can avoid S75 liability.
Peter Crosland
bcc97
> On Tue, 22 Dec 2009 06:58:08 -0800 (PST), FoggyTown
>
> >Is the CC protection still available if the payment is
> >through Paypal?
>
> There is no statutory (Consumer Credit Act S75) protection for a
> purchase if the payment is via Paypal. Your credit card may have some
> contractual protection scheme which may cover purchases via Paypal but
> you would need to read the T's&C's.
This question is far from settled. S.75 applies where there are
'arrangements' between the creditor (i.e. the card issuer) and the
supplier (i.e. the seller). The arrangements we're talking about here
are the arrangements that allow suppliers to accept card-funded
payments via an e-money provider for specific transactions for the
supply of goods or services. There is a strong argument that these
amount to the necessary arrangements under the Consumer Credit Act.
If card issuers genuinely thought that the insertion of an e-money
provider into the chain of 'arrangements' would defeat s.75 liability,
then all credit and debit card payments would be processed through e-
money providers instead of 'merchant acquirers' (i.e. all merchant
acquirers would morph into e-money providers).
The FOS opinion on this question has been publicised without any
indication of the reasoning behind it. In my view, it doesn't stand
up to scrutiny, nor is it consistent with the relevant case law (inc.
the OFT case on 4-party transactions and Truman).
This question has been debated fully on this forum (or a similar one)
before, and nothing has changed since then to make the law any
clearer. The argument in favour of s.75 applying is still strong
enough to dissuade card issuers from mounting defences to individual
cases (so long as the cardholder intimates that they intend to take
the case to Court rather than the FOS).
Peter Parry
wrote:
>On 23 Dec, 18:41, Peter Parry <pe...@wpp.ltd.uk> wrote:
>> There is no statutory (Consumer Credit Act S75) protection for a
>> purchase if the payment is via Paypal. �Your credit card may have some
>> contractual protection scheme which may cover purchases via Paypal but
>> you would need to read the T's&C's.
>
>This question is far from settled.
In practice it is as no one so far has had the money or inclination to
challenge it and it is unlikely such a case will ever come along.
Until it does the FOS assessment in such "wider implication" cases is
intended to provide the equivalent of precedence until something
stronger comes along.
>S.75 applies where there are
>'arrangements' between the creditor (i.e. the card issuer) and the
>supplier (i.e. the seller). The arrangements we're talking about here
>are the arrangements that allow suppliers to accept card-funded
>payments via an e-money provider for specific transactions for the
>supply of goods or services. There is a strong argument that these
>amount to the necessary arrangements under the Consumer Credit Act.
The fundamental problem is that the CCA was written before the general
use of credit cards and credit card transactions were not even
considered during it's drafting. The idea of "e-money" simply didn't
exist. S75 protection is largely serendipitous as far as credit cards
are concerned. As a result it has no real logic for credit cards and
trying to fit modern credit card usage, and the e-commerce directive
in particular, around it is challenging. There is little question
that the e-commerce directive and the general progress in EU
e-commerce and in particular the desire to make e-money the same as
cash has no room for S75 in its present form. If S75 applies to
e-money issuing then e-money is dead in the water.
>If card issuers genuinely thought that the insertion of an e-money
>provider into the chain of 'arrangements' would defeat s.75 liability,
>then all credit and debit card payments would be processed through e-
>money providers instead of 'merchant acquirers' (i.e. all merchant
>acquirers would morph into e-money providers).
As S75 claims are pretty insignificant in value I doubt if this is a
factor especially as the controls on e-money providers are more
onerous than those on merchant service providers.
>The FOS opinion on this question has been publicised without any
>indication of the reasoning behind it. In my view, it doesn't stand
>up to scrutiny, nor is it consistent with the relevant case law (inc.
>the OFT case on 4-party transactions and Truman).
It has been revisited since the 4 party case and somewhere is quite a
lengthy article on the subject which includes much of the original
background material. Unfortunately I can't find the reference at the
moment. The conclusion was that e-money and cash were equivalent,
that the buyer bought e-money from PayPal who then sent it to the
seller and that no credit agreement existed. The buyer had the same
rights as if he had bought the goods using cash or indeed if they had
used a "credit card cheque".
>This question has been debated fully on this forum (or a similar one)
>before, and nothing has changed since then to make the law any
>clearer. The argument in favour of s.75 applying is still strong
>enough to dissuade card issuers from mounting defences to individual
>cases (so long as the cardholder intimates that they intend to take
>the case to Court rather than the FOS).
There appears to be little evidence that this is occurring (and many
people mixing up charge backs (which can be done against Paypal
payments) with S75 claims). There are however quite a few people
reporting quite the opposite, for example :-
http://www.highland.gov.uk/yourcouncil/news/newsreleases/2009/September/2009-09-07-12.htm
Which? "Your rights when paying by credit card. Chargeback on credit
and Visa debit cards"..."...Although payments made through online
payment systems such as PayPal are not covered by section 75, they
should be covered by the charge back rules, so it's worth putting in a
claim."
"After 5 weeks of sending and receiving letters from the financial
ombudsman explaining everything in full and sending them Barclaycards
Final response letter, which states they will do nothing to help, the
FO have informed me they can do nothing to help. Under section 75
Barclaycard do not have to refund me simply because my 'contract' is
with PayPal. Barclaycard have fulfilled their part as their contract
is with PayPal (the merchant in their eyes)" (Sept 2009)
http://forums.moneysavingexpert.com/showthread.html?t=1789553&page=2
"I phoned Barclaycard, they could have refunded my payment under my
normal terms and conditions of use under faulty goods BUT because the
transaction had gone through PayPal they could not!!!!" (Jul 2009)
http://forums.moneysavingexpert.com/showthread.html?t=1787599&highlight=paypal+s75
" We have considered your claim for a refund, but regret to inform you
that because you used PayPal to make your purchase, you do not have a
valid claim against HFC (as the Creditor) under section 75 of the
Consumer Credit Act 1974.
Section 75 of the Consumer Credit Act only applies to agreements
involving 3 parties, namely a Debtor, a Creditor and a Supplier, where
a Debtor has used the Creditors credit card to make a purchase from a
Supplier.
For example a Debtor would be our cardholder, namely you. A Creditor
would be HFC Bank as the credit card provider and the Supplier would
be William Young.
A purchase made using PayPal adds another party to the transaction.
Section 75 of the Consumer Credit Act 1974 does not apply to
transactions where there are either more or less parties involved than
a Debtor, Creditor and a Supplier.
Based on the above facts, such a claim under Section S75 of the
Consumer Credit Act is therefore not applicable. "(Sept 2007)
http://forums.moneysavingexpert.com/showthread.html?t=562077&highlight=paypal+s75
<http://docs.google.com/viewer?a=v&q=cache:2qDXNs0n9kQJ:www.era.lib.ed.ac.uk/bitstream/1842/2262/1/paypal.pdf+s75+paypal+failed&hl=en&gl=uk&pid=bl&srcid=ADGEESgTKeHnpHkvNWuAob9hrAHfQVEPpwqhlPzSVVQmjHhSIVVTsEDtDC51TSuUBq40EyuqtvodWewZkYEDUblSTQuAxktF6dqABFJ1fXYeP7QYCIgJVnGYnVknToaXRhRmLv5ptKJB&sig=AHIEtbQQybPgg4mEywxXEh4H27PHYdQIfg>
Is an interesting article on the subject.
Currently the FOS opinion is the next best thing to precedence and
until someone has the time and money to take a case to a court of
record is the definitive word on the subject.