Author Topic: Paying by Credit Card  (Read 647 times)

Paying by Credit Card
« on: May 21, 2020, 08:23:21 pm »
Perhaps one for the legal/financial bods:  Mrs L and I are getting new double-glazing installed at Legs Towers and it comes in around the £17k mark.  We’re going to be getting them from a small but reputable local firm. There’s a deposit to pay of about £7k.  We’ve got the means to pay cash or cheque but are a bit nervous in the current climate about parting with our deposit, the firm folding and poor Mr and Mrs Legs ending up way down the list of creditors.  We could pay by credit card but there’s a fee of 2.5% which is the best part of £200.

If we pay part of the deposit by credit card and the majority in cash, would that give us the financial protection on the entire transaction?


robgul

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Re: Paying by Credit Card
« Reply #2 on: May 21, 2020, 09:17:40 pm »
I would pay by credit card - I'm pretty sure that it's now illegal to add a fee for cards???   - check the position but I think you get the same protection with a debit card which the supplier may prefer as he has a low fixed fee from his bank and not a % of the value he has a with a credit card merchant account.

I would absolutely NOT pay anything prior to satisfactory completion in cash/cheque.

Rob

Re: Paying by Credit Card
« Reply #3 on: May 21, 2020, 09:28:08 pm »
Section 75 of the Consumer Credit Act protects credit card payments only and for single item transactions over £100.

Credit card payment charges were made illegal in January 2018.

Re: Paying by Credit Card
« Reply #4 on: May 21, 2020, 09:29:15 pm »
For clarity, your large deposit would be covered if you pay by credit card.

Re: Paying by Credit Card
« Reply #5 on: May 21, 2020, 10:05:29 pm »
Thanks for the replies, folks.

For clarity, the fee is a passing-on of the transaction cost rather than a 'hidden' charge - does that make any difference?

I'm leaning towards making all the payments on the credit card anyway.

Re: Paying by Credit Card
« Reply #6 on: May 21, 2020, 10:50:54 pm »
Thanks for the replies, folks.

For clarity, the fee is a passing-on of the transaction cost rather than a 'hidden' charge - does that make any difference?

No (AIUI, I'm no expert). The companies should charge people the same regardless of their payment method[1]. If they need to charge more to cover the cost of fees from the card merchants they either need to increase the base cost of the product or just suck up the lower margin as a cost of doing business.

1. Personal debit cards and personal credit cards at least. I think it's still possible to legally add on a fee for corporate credit cards - at least I think there was a specific fee for these types of cards when I paid my VED the other week and that would have been a Government website.
"Yes please" said Squirrel "biscuits are our favourite things."

cygnet

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Re: Paying by Credit Card
« Reply #7 on: May 21, 2020, 11:01:14 pm »
Visa chargeback might provide the protection you're looking for
https://www.visa.co.uk/how-you-pay-matters/chargeback-purchase-disputes.html
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Re: Paying by Credit Card
« Reply #8 on: May 21, 2020, 11:23:57 pm »
Apparently, if you pay the deposit (or even a part of the deposit) by credit card you're covered for the whole amount if things go wrong.

https://www.moneysavingexpert.com/shopping/section75-protect-your-purchases/

Quote
pay the deposit by credit card and you're covered

The law's specific on this, you get the protection for the whole cost of an item or service, even if you only pay for a part of it – even just 1p would count – on credit. The only condition is that what you're buying costs more than £100 and less than £30,000.

Therefore if you want protection…

As long as it costs more than £100, pay for even a fraction on a credit card and you're protected.

    Here's a Section 75 deposit-only success story to give you some inspiration...

    I ordered and paid £15,991 in full for a new car but before I took delivery, the trader went into liquidation.

    Thankfully I had paid the first £100 deposit on my Barclaycard credit card. So I made a Section 75 claim. It took six months, but this week I received a credit to my card of the whole amount, just from having paid the first £100 on my card.
    And a success story that ended up with the Ombudsman and proves persistence pays off...

    Linda Marriott and her husband had bought a £22,400 kitchen, and following this guide paid £200 as a deposit on a credit card for extra protection. The firm went bust so they asked the card firm for all the cash back – as they were due – but it said no.

    They went to the Financial Ombudsman. It ordered the card to pay out the full whack, plus 8% statutory interest, plus £200 extra for 'inconvenience caused'. For inspiration see Linda's full I got £23k back story.

    Martin's always said to keep going with a claim. Tesco tried to say the name of the business owner was different to his real name so it wasn't the same person. But I kept going back on MoneySavingExpert and reading about Section 75 and I kept thinking, 'don't give up, keep going, keep fighting' as I knew we were right.

    But when we heard the adjudicator had found in our favour, I burst into tears. I just couldn't believe it. Although at times we felt like giving up, I was so convinced we were right having re-read the information on this site and even quoting a case you had on here, that I kept going.

    The Ombudsman says the legislation doesn't specify a minimum deposit size – so in theory a consumer could pay as little as a penny. But some retailers may set a minimum amount that you have to pay by card, it says, and this will vary depending on the store.


Re: Paying by Credit Card
« Reply #9 on: May 21, 2020, 11:33:33 pm »
From Martin Lewis's site:-

https://www.moneysavingexpert.com/shopping/section75-protect-your-purchases/

and:-

A trick to help – pay the deposit by credit card and you're covered

The law's specific on this, you get the protection for the whole cost of an item or service, even if you only pay for a part of it – even just 1p would count – on credit. The only condition is that what you're buying costs more than £100 and less than £30,000.

Therefore if you want protection…

As long as it costs more than £100, pay for even a fraction on a credit card and you're protected.

End quote

So pay a pound you're covered, so for 2.5p charge Ah
OK so make it a £2 part deposit and suck up the 5p penalty and jobs a good un.  ;D

Re: Paying by Credit Card
« Reply #10 on: May 22, 2020, 07:55:00 am »
Another thing to check is that the credit card you have actually provides the protection you are looking for.

I used to assume that they all did but, about 10 years ago, I had a Barclaycard and had cause to rely on protection after buying from a seller who refused to accept return of a mis-described item, and found that they didn't offer it.  Since then I've switched to cards that do.

robgul

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Re: Paying by Credit Card
« Reply #11 on: May 22, 2020, 07:56:26 am »
.... based on the price level my reaction would be to be saying "This is what I'm prepared to pay, on a credit card, do you want the work or not?"   

Rob

Re: Paying by Credit Card
« Reply #12 on: May 22, 2020, 03:41:55 pm »
I believe that in order to qualify for protection under s.75 your card payment needs to be a minimum of £100.  Yes, you get cover for anything up to £30k but that cover does not kick in until the card transaction is £100 or greater.

So, you could pay £100 on your credit card and receive full cover but nothing less.

iddu

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Re: Paying by Credit Card
« Reply #13 on: May 22, 2020, 10:00:17 pm »
"75 Liability of creditor for breaches by supplier.

(1) If the debtor under a debtor-creditor-supplier agreement falling within section 12(b) or (c) has, in relation to a transaction financed by the agreement, any claim against the supplier in respect of a misrepresentation or breach of contract, he shall have a like claim against the creditor, who, with the supplier, shall accordingly be jointly and severally liable to the debtor.

(2) Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

(3)  Subsection (1) does not apply to a claim—

      (a) under a non-commercial agreement,

      (b) so far as the claim relates to any single item to which the supplier has attached a cash price not exceeding £100 or more than £30,000

      (c) under a debtor-creditor-supplier agreement for running-account credit—

          (i)  which provides for the making of payments by the debtor in relation to specified periods which, in the case of an agreement which is not secured
               on land, do not exceed three months, and

          (ii) which requires that the number of payments to be made by the debtor in repayments of the whole amount of the credit provided in each such
               period shall not exceed one.

(4)  This section applies notwithstanding that the debtor, in entering into the transaction, exceeded the credit limit or otherwise contravened any term of the agreement.

(5) In an action brought against the creditor under subsection (1) he shall be entitled, in accordance with rules of court, to have the supplier made a party to the proceedings."

------------------

(My bold)

So AFAICS it has to be a tri-party arrangement, you, the supplier, and the CC Co. and it's the price the Supplier places on the item, not the amount you settle on the CC, which in theory could therefore be as little as 1p.
I'd offer you some moral support - but I have questionable morals.

Re: Paying by Credit Card
« Reply #14 on: May 22, 2020, 11:38:35 pm »
That's certainly what the MSE site says about it - where you're buying an item priced from £100.01 to £30k, and paying any part of it on tick from a third party, that third party is also liable for any defects in the product or issues with the sale.

Relevant third parties aren't limited to credit card providers - they also include your bank if the transaction uses your overdraft, and the finance company if your window company or car dealer has offered finance but doesn't do it themselves (as they generally don't).

HP arrangements (eg for a car) aren't included, finance provided by the seller themselves (eg a catalogue company) isn't included, and 3rd party payment processors (eg paypal) will often break the debtor-creditor-supplier chain, depending on the exact terms of the agreement between the seller and the payment processor.

iddu

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Re: Paying by Credit Card
« Reply #15 on: May 23, 2020, 01:05:18 am »
That's certainly what the MSE site says about it - where you're buying an item priced from £100.01 to £30k, and paying any part of it on tick from a third party, that third party is also liable for any defects in the product or issues with the sale.

Relevant third parties aren't limited to credit card providers - they also include your bank if the transaction uses your overdraft, and the finance company if your window company or car dealer has offered finance but doesn't do it themselves (as they generally don't).

HP arrangements (eg for a car) aren't included, finance provided by the seller themselves (eg a catalogue company) isn't included, and 3rd party payment processors (eg paypal) will often break the debtor-creditor-supplier chain, depending on the exact terms of the agreement between the seller and the payment processor.

But (there's always a but) it effectively has to be tri-party, where the credit provider has direct relationship with the supplier(*)

        +<-> CC Co
You <-> +                                      RATHER THAN   You <-> CC Co <-> Supplier
        +<-> Payment Processor <-> Supplier                   + -- (indirect) -- +

This is the 'get out' that many CC Co's use against a s75 claim when the flow of funds is the former route, because they claim there's no direct relationship from them to supplier - but it's hard for you to know if the Supplier is contracted to a Payment Pocessor acting as agent for them, rather than direct to the CC Co's, unless you ask / spot e.g. "SagePay" etc. on the card reader...and what are you supposed to do if (like AFAIK the majority these days) they are using a Payment Processor - walk away?

Really needs some case law / s75 updating to disregard agents acting as Payment Processors...

(*) Pretty much I suspect because NOT having a direct relationship negates their protection of s75.2, whereby they can go after the supplier if they're still trading, but that's just my take on the "it's not your money, it's ours..." PoV.
I'd offer you some moral support - but I have questionable morals.

Re: Paying by Credit Card
« Reply #16 on: May 23, 2020, 09:03:03 am »
It looks like a big deposit, I assume for custom products that they wouldn't want to be lumbered with if for some reason you changed your mind.  I'd be a bit nervous of a business who needed the cost of materials upfront for any other reason.  Have you talked to the supplier?  It's possible they're members of a professional body who offer an escrow scheme, which ought to offer mutual security.

Re: Paying by Credit Card
« Reply #17 on: May 23, 2020, 09:26:11 am »
That's certainly what the MSE site says about it - where you're buying an item priced from £100.01 to £30k, and paying any part of it on tick from a third party, that third party is also liable for any defects in the product or issues with the sale.

Relevant third parties aren't limited to credit card providers - they also include your bank if the transaction uses your overdraft, and the finance company if your window company or car dealer has offered finance but doesn't do it themselves (as they generally don't).

HP arrangements (eg for a car) aren't included, finance provided by the seller themselves (eg a catalogue company) isn't included, and 3rd party payment processors (eg paypal) will often break the debtor-creditor-supplier chain, depending on the exact terms of the agreement between the seller and the payment processor.

But (there's always a but) it effectively has to be tri-party, where the credit provider has direct relationship with the supplier(*)

        +<-> CC Co
You <-> +                                      RATHER THAN   You <-> CC Co <-> Supplier
        +<-> Payment Processor <-> Supplier                   + -- (indirect) -- +

This is the 'get out' that many CC Co's use against a s75 claim when the flow of funds is the former route, because they claim there's no direct relationship from them to supplier - but it's hard for you to know if the Supplier is contracted to a Payment Pocessor acting as agent for them, rather than direct to the CC Co's, unless you ask / spot e.g. "SagePay" etc. on the card reader...and what are you supposed to do if (like AFAIK the majority these days) they are using a Payment Processor - walk away?

Really needs some case law / s75 updating to disregard agents acting as Payment Processors...

(*) Pretty much I suspect because NOT having a direct relationship negates their protection of s75.2, whereby they can go after the supplier if they're still trading, but that's just my take on the "it's not your money, it's ours..." PoV.

Ain't that what I said? (Granted, you're expanding, not contradicting ...)

I'd slightly naively assumed that if you're in a shop using the terminal or clicking the 'Pay with card' button online, then it doesn't matter what comes up on screen - you think you're paying the retailer, and because you've got no way of telling whether the intermediary step is that of an old-style merchant acquirer or new-style payment processor, the financial services ombudsman will side with you as a consumer.

The grey area is where you click the 'Pay with paypal' button instead - it's more obvious that you're paying paypal and paypal is paying the retailer, especially as you might be funding the paypal transaction from different sources, even if they do include a credit card.

iddu

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Re: Paying by Credit Card
« Reply #18 on: May 23, 2020, 10:27:53 am »
Yeah, but as ever a 'picture' of "Follow the money" makes it easier for people to comprehend; if some smart alec dreamed up Payment Processors as a circumvention method I hope they wangled a (very small) % cut of a (very big) daily transactional sum for the idea, and are sipping Tequila's by the pool :P

And no, it seems to be a lottery ATM as to whether the FSO will come down on the debtors side, depending on their overall view of the transaction, thus the uncertainty.
I'd offer you some moral support - but I have questionable morals.