Payment using a credit card - loophole?

[RandAbuild]

We're about to pay the 50% up front deposit for our new stairs. I've asked the supplier to split it so that we pay £100 with a credit card and the balance of the initial payment by BACS, in order to obtain Section 75 protection.

 

However, the supplier says they use Worldpay for credit card payments and they have had awful problems in the past getting payment from them. Further digging suggests there might be a glitch where an intermediary is involved.

 

Martin Lewis's website has some interesting things to say about how credit card companies can refuse to meet the full cost in the event of a default, as Worldpay stands between the debtor and the supplier - see http://www.moneysavingexpert.com/news/cards/2017/04/revealed-section-75-credit-card-protection-may-fail-due-to-payment-processing-loophole---shoppers-beware

 

Anyone come across this? How can I secure some protection using a credit card or other means?

[bassanclan]

What about payment by debit card? You can use Visa chargeback, although not a legal right they do offer protection

[jamiehamy]

Hmm, the relationship between the supplier and their credit card merchant is nothing to do with you - and most certainly should not be used as an excuse to put you off using credit card (if I'm reading rightly). If what they say is true, they should move to another provider. 

 

Re: Section75 - interesting but nothing much we mere mortals can do about it tbh. 

 

I pay virtually everything I can on credit card, paying it off every month to get the benefit (I have a Flybe card). I avoid ever paying anything directly from my bank account except any contractors. 

[PeterW]

That's crap - Worldpay are one of the biggest merchant providers and are very good at what they do. We used to put circa £70m through them with no problems. Sounds like the supplier has not been entirely truthful about something like a chargeback and WorldPay have withheld payment. 

 

Martin Lewis is partially correct but you need to know if it's a merchant you are using. 

The difference is whether they are a merchant provider or a third party provider. For example, PayAnywhere and iZettle are not merchants in their own right, they only act as intermediaries and will then settle via another provider. Worldpay is a merchant and settles directly as do Barclaycard, HSBC and a few others such as LBC, Payzone and Sage Pay. 

 

Fairly easy to check via the web too. 

[Temp]

I was aware that using PayPal meant you loose protection because they are considered a third party  intermediary. Hadn't occured to me that other payment processing companies like Worldpay might also be considered third parties but I can see why that might be the case. Thanks for the warning.

 

 

[Temp]

Down here it mentions a problem with sage pay..

 

https://www.lovemoney.com/news/3303/section-75-consumer-credit-act-card-shops-protection-claim-refund-your-rights

[PeterW]

Again that's incorrect ...

 

SagePay are a merchant, they are registered as such and they provide full merchant services. PayPal is a grey area as some of their services are NOT merchant services, they are deemed to be payment providers and there is a very big difference. 

 

The simple check is to find who the retailer is paid by. Card companies do not like Section 75 it's as simple as that ..!

[Temp]

Have done some more digging and found this court case care of another forum....

 

http://www.bailii.org/ew/cases/EWCA/Civ/2006/268.html

 

Its a judgement from 2006 involving the OFT and some credit card companies (Lloyds, Tesco, Amex). It looked at transactions involving four parties (you, the seller, the credit card co and an intermediary) as well as transactions abroad. They concluded...

 

..we have reached the conclusion that

connected lender liability under section 75 of the Act attaches to all transactions entered into using credit cards issued under consumer credit agreements regulated by the Consumer Credit Act 1974, whether they take place within a three- or four-party structure and whether they are entered into in the United Kingdom or elsewhere.

 

It's interesting that Amex supported the view that section 75 applied to four party transactions. They only objected to it being applied abroad. So that might suggest Amex are more likely to pay up under section 75 than other card suppliers.

 

So unless this judgement has been overturned at a higher court it seems clear that you are covered when an intermediary is involved. 

[Temp]

It appears Lloyds only appealed to the Lords about the ruling on overseas transactions and that was rejected meaning overseas transactions are covered under S75.

https://www.publications.parliament.uk/pa/ld200607/ldjudgmt/jd071031/lloyds.pdf

 

I haven't yet found details of an appeal to the Lords on the four party connected lender liability issue.

[RandAbuild]

Thanks for all your contributions. I'll post what happens next,,.

[Construction Channel]

You guys need an Amex centurion card. Can't see an issue paying on one of those ?

 

 

[RandAbuild]

Our First Direct card is black. Maybe we'll use that

[richi]

On 07/07/2017 at 17:16, RandAbuild said:

Thanks for all your contributions. I'll post what happens next,,.

Best of luck. We're rooting for you...

[RandAbuild]

A quick update on this. I needn't have worried - Wooden Stairs delivered and fitted the stairs on time and budget. We're very pleased with the result!