It’s safest not to use third party payment schemes
Using PayPal? You might not be protected if your purchase goes wrong, says Paul Lewis
One of our most valuable consumer protections is called Section 75 or s.75, named after where it is found in the Consumer Credit Act 1974. When we buy something for more than £100 on a credit card (not a debit card), then the bank is equally liable with the retailer if something goes wrong with our purchase. If the item does not arrive, or an online retailer refuses to refund you if you send it back within 14 days, you can get the money back from your credit card provider.
If an item goes wrong after a few weeks or was a fraud – or a holiday firm goes bust – then you can get a full refund from the bank. (Normally we would try to get the retailer to sort it out first, though strictly speaking that’s not necessary: the bank is jointly liable and must refund you if you ask.)
But, Radio Times reader Celia emailed me to ask, “If I pay by credit card through a third party, for example PayPal, do I lose my rights?” The answer is, “Yes, probably, but perhaps not always!”
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There are circumstances when you still keep those rights, but many where you lose them. This is because s.75 rights apply only if you pay for the item directly with a credit card. If a third party comes between your card and the retailer then you lose the right and the bank has no liability if problems occur.
If you have a balance on PayPal and use that to buy the goods, then you do not have s.75 rights. If you use PayPal as a means to pay, have no balance on it, and pay in full from your credit card using PayPal to transfer the money, then you probably keep your s.75 rights. But it will depend on the precise circumstances.
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PayPal has its own buyer protection scheme against goods not arriving, not working, or being a fraud, so you will be covered by that. However, it is safest not to use PayPal or any other third party payment scheme such as Buy Now Pay Later if you want to be sure you have your s.75 rights. Pay directly to the retailer with your credit card instead.
QUESTIONS? Send any questions to Paul.Lewis@radiotimes.com. Paul cannot answer you personally, but I will reflect them in his column.