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Credit card payment.

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Credit card payment.

If you purchase an item for £100 or more using a credit card and the firm you buy it from goes bust then the card company will refund your money.
Less well know is the following, you pay a deposit of £100 or more for an expensive item such as a holiday and have to pay the balance off in full, often 6 weeks with holidays,
so you pay the remainder in cash as some holiday firms charge 4% for payment by credit card. Just after you have paid the balance in full the firm goes bust, so how much of your money will you get back ?
The answer is the full amount !
I Gave the example of a holiday but it could be any item where you have to pay the balance in full before you get it.
9 REPLIES
itsme
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Re: Credit card payment.

Quote from: gleneagles
you pay a deposit of £100 or more for an expensive item such as a holiday and have to pay the balance off in full,

The deposit don't have to be £100, it can be as little as £10. So long as the full amount is more than £100 you are covered by section 75.
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Re: Credit card payment.

There is an upper limit of £30,000 and credit card cheques do not have the same cover.
Also, you're not necessarily covered if the supplier is not the same as the company that accepts payment.
credit cards - equal liability under section 75 of the Consumer Credit Act 1974
Quote
However, credit card cheques are not covered because they can be made payable to anyone – not just to the suppliers appointed to accept the credit card. And the credit card company would not share liability if the card was used to withdraw cash to pay for the purchase.

Quote
There can be problems if the card is accepted by a different business from the one that provided the goods and services. We see this situation most frequently in connection with timeshare and holiday club membership, where it is not unusual for the timeshare or holiday club company to use the credit card facilities of another business. The business accepting the payment may simply be acting as agent for the supplier, in which case section 75 will not apply. In order for section 75 to apply, the business that accepts the payment and the supplier have to be "associates", as defined in the Consumer Credit Act.

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Re: Credit card payment.

Just out of interest what is the situation when using paypal to purchase goods as you are giving them the money to pass on to a firm.
In other words if that firm went bust and Paypal refused to refund your money would you not have any protection from the credit card company ?
Community Veteran
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Re: Credit card payment.

Steady on there gleneagles, paypal has only been around since the 90's.. you don't expect the law to have taken that into account yet do you?
I need a new signature... i'm bored of the old one!
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Re: Credit card payment.

Quote from: gleneagles
Just out of interest what is the situation when using paypal to purchase goods as you are giving them the money to pass on to a firm.
In other words if that firm went bust and Paypal refused to refund your money would you not have any protection from the credit card company ?

Wouldn't that be covered by the second quote in my previous post? Undecided

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Re: Credit card payment.

Yes, Paypal payments are not covered as they are indirect.  A similar situation occurs if you buy an airline ticket from a travel agent.  If the airline goes bust you can't claim t as your transaction is indirect.  In this instant you may well be covered by ATOL, however.
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Re: Credit card payment.

Shouldn't PayPal come under some FSA rule or the like.
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Re: Credit card payment.

I think this may answer your question:
Quote
n Europe, PayPal is registered as a bank in Luxembourg under the legal name PayPal (Europe) Sàrl et Cie SCA, a company regulated centrally by the Luxembourg bank authority, the Commission de Surveillance du Secteur Financier (CSSF)[ (note that all of the company's European accounts were transferred to PayPal's bank in Luxembourg on July 2, 2007. Prior to this move, PayPal had been registered in the UK as PayPal (Europe) Ltd, an entity which was licensed as an Electronic Money Issuer with the UK's Financial Services Authority (FSA) from 2004. This ceased in 2007, when the company moved to Luxembourg. It is therefore not possible for UK customers to obtain legal redress from the company in the English, Scottish, or Northern Irish Courts.
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Re: Credit card payment.

Interesting reply.
Must admit I have never had a problem with Paypal but looking on the forums it's seems a number of people have not been as lucky.
I Think they have swung more in favour of the purchaser rather than the seller if things go wrong and are quick to refund money.