Bank refusing to help with PayPal fraud

[MoonBuggy]

I did actually post this in another thread, but I figured it was probably lost in the flow of conversation, so I hope it's OK to put it here:

 

I've been trying to sort out a £270 purchase I made on PayPal (the item never arrived, the seller is a [EDIT]) - since I know that PayPal doesn't cover me to the full amount, I requested a chargeback from the credit card company. After about a month of hassle, they have finally sent me a letter stating that PayPal's duty was simply to process the payment and that as they have done so correctly, there are no grounds for a chargeback. I honestly don't know what to do now - I was under the strong impression that the credit card companies had to cover you against cases exactly like this, and I'm more than happy to push the issue as far as I need to, but realistically I don't know where to start. Any ideas, anyone?

[JonCris]

They do They don't like reversing Paypal payments (PP as a client of Barclays) give them a hard time

 

Tough for them remind them of their obligations under sec 75 of the CCA & also to move funds in a fraudulent transaction is money laundering

 

& why are you not covered by PayPal???

[MoonBuggy]

I'm not fully covered by PayPal simply because they only provide £150 buyer protection on a lot of transactions - I know it's better than nothing, but it still would leave me out of pocket for something that I had absolutely no control over.

 

The letter sent claims that section 75 of the CCA doesn't apply. I've scanned and OCRed the letter, full text is below. I disagree with some of their points (particularly the comparison to sending a cheque - that analogy completely negates the role that PayPal play in the transaction) and I get the general impression that I'm not being given all of the information I need, but I unfortunately don't know how to go about dismantling their argument.

 

 

Dear XXXX,

 

Your Credit Card Account Number: X.

 

I write following your recent contact about the transaction of £270.00 to Paypal * XXXX.

 

I feel it is important to explain that the Ombudsman has recently been looking at issues around section 75 of the Consumer Credit Act 1974 and Paypal-type transactions - specifically whether or not section 75 applies. The conclusion reached was that transactions involving an 'electronic money institution', i.e. Paypal, is 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). Consequently there is no debtor-creditor-supplier relationship between the Bank and the supplier of the goods.

 

For section 75 to apply the law says there has to be a "debtor-creditor-supplier" agreement involving an actual or contemplated pre-existing 'arrangement' between the creditor and the supplier. Our relationship is with Paypal, who fulfilled their obligations by forwarding the funds to the supplier/seller of the goods. We do not have a relationship with the supplier/seller of the goods.

 

To further clarify this, the Ombudsman explained "...the cardholder is in the same position as he would have been if he had used his credit card to pay money into his current bank account and had then written a cheque to the seller."

 

As we are unable to help you any more, I can only suggest that you continue to pursue the matter via Paypal and Buyer Protection or seek independent advice.

 

Yours Sincerely,

 

Steve Morris

Manager, CCA Claims

Dispute Processing

[JonCris]

The banks reverse paypal payment transactions all the time

[MoonBuggy]

That's what I thought, but it seems like they've decided to start trying anything they can to avoid it, and unfortunately I don't know where to start in terms of getting my money back.

[JonCris]

Get the name & address of the seller (they must give you it) & sue them, paypal & Barclays

[MoonBuggy]

I'll certainly request the details from PayPal again - when I tried to do so before they informed me that they couldn't provide them to me directly, only to the police. I have not yet reported it to the police, as I was hoping that it would just be sorted through the banks and PayPal, and because I had previously been informed that it was a civil, not criminal, matter. If that is not the case, however, I'll certainly do so.

 

In terms of taking further action against the bank (it's Lloyds TSB, not Barclays, by the way) or PayPal, I don't know what grounds I could do so on. That was really the crux of my original question - obviously I'll push it first to them, and secondly through the courts, but I don't know what grounds I can do so on when they claim that the CCA doesn't apply - I know from experience that big companies often do everything they can to avoid fulfiling their legal obligations, and that they often give in when presented with the facts and shown that the customer is willing to take it as far as necessary, but I can't seem to find any reference points as to what the facts actually are here, other than the (presumably biased) interpretation they gave me.

 

I really do appreciate your taking the time to help me here, I'm so glad that there's at least somewhere to discuss matters like this. Thanks.

[noomill060]

Has paypoo reimbursed you the £150 they claim you are covered for?

 

They are a nightmare to deal with.

[Conniff]

How can stealing money from someone be a civil matter? theft is theft however it is wrapped up.

[MoonBuggy]

I've looked at the financial ombudsman's website, and it does appear that the letter from Lloyds TSB could be accurate - they seem to have decided that section 75 doesn't apply if PayPal is involved. Frankly I find that unbelievable - not only am I left with no recourse, I can't even lodge a complaint because the very people I'm meant to complain to are the ones who say I have no rights! On principal, apart from anything else, it is just completely unacceptable.

 

The only thing I have not yet had a chance to check is the regulations that the FSA place on PayPal in situations like this - since the ombudsman has decided the banks are not liable, I guess there is still some hope that the liability has simply been transferred to PayPal.

 

Has paypoo reimbursed you the £150 they claim you are covered for?

 

They are a nightmare to deal with.

Not yet. Not only that, they are now claiming that they'll only cover me for £100 since the seller was registered from the US but with a UK address. The fact that this was at no point mentioned, and that the eBay auction did clearly state £150 coverage, means that I will at least have some grounds to complain about that, but it's just another hassle.

 

How can stealing money from someone be a civil matter? theft is theft however it is wrapped up.

Quite correct, now that I look at it more closely - that'll teach me to believe what I'm told! I'll certainly take it to the police, but I still must assume that the chances of them actually recovering my money are slim, are they not? I know it's only £120 (assuming PayPal fulfil their obligations) but it's still enough to irritate me, not to mention the principal of the thing.

[JonCris]

I'm absolutely fed up seeing companies erroneously hide behind the DPA to avoid giving details of thieves to their victims

 

The DPA was never intended to allow those guilty of a criminal offence to be anonymous & they should know that

[JonCris]

as for the ombudsman they are a joke & their decisions are more & more frequently ignored, or even critized, by the courts

[noomill060]

If they dont cough up, start a small claim action for the whole amount you were scammed for.

[MoonBuggy]

as for the ombudsman they are a joke & their decisions are more & more frequently ignored, or even critized, by the courts

That's interesting - I don't suppose you happen to have any examples? I googled it a bit but couldn't seem to find anything relevant. Citing a few situations in which the ombudsman has been ignored or overruled would certainly help to give me a better position against Lloyds TSB's claims they made in the letter they sent me.

[JonCris]

Start here

 

Interview: Chief ombudsman spells it out | This is Money -

[shoeshopper]

Get as much back from Paypal as you can. I have had dealings with them recently ( private seller/ not a [EDIT]) and it seems to me that they have far too many powers to move peoples money around without any notification and/or authority.

 

There a few dedicated websites, detailing Paypal problems, who may be able to assist.

 

UK Auction Help may be of use.

 

Good Luck Moonbuggy!