S75 Claim - Mastercard & PayPal - Case Law Help Please?‏

[bustthematrix]

Hello All

 

I have a situation where I have presented what I consider to be a valid S75 claim against my Mastercard. The value exceeds £500. With S75 claims of course it's assumed there is either a dodgy vendor refusing to refund or that can't refund due to liquidation or being incontactible. In this case it's the former.

 

So far, the lender/creditor has denied my claim on what I consider a rather dodgy basis. They have not gone down the route of saying my claim is invalid due to T&C's or some other such, they've said the following:

 

1. The payment reference on the Credit Card statement has a reference to both PayPal and the vendor/supplier. They are insisting that this makes PayPal the supplier under the CCA 1974. They have chosen to disregard the portion of the statement text showing the name of the company I actually bought from! How devious. Had the statement simply shown only PayPal as the 'supplier', this might have been different but even then, that would still be devious as there's no reference to PayPal at all on any of the vendor documents!

 

I've also informed them that both on the card payment form and on the T&C's (a copy of which I've sent to the creditor) there is NO reference to PayPal so how can they be construed as my supplier?

 

PLEASE NOTE THAT THIS IS NOT A NORMAL PAYPAL TRANSACTION WHERE ONE WOULD PAY USING their PAYPAL Account LINKED TO A CREDIT/DEBIT CARD. This is a completely seperate offline transaction between myself and a vendor company (supplier) using my credit card as the means of payment. Funny enough, the very reason I used my credit card to pay for this transaction was to cover me should there be issues with the vendor!!!

 

They've stated this twice now, in writing. I've had enough and am at the stage where I'm considering small claims. Before that however (and to that end should I get there), I'd like to know what case law/useful rulings/references may exist that address this issue. I've read elsewhere on CAG that case law exists but need help find it please.

 

It would be entirely unfair to consumers who may, like me chose to pay for higher value transactions using their CC purely due to the added benefits of S75 only to find out that behind the scenes, creditors and suplliers are engaging in funnies like this to make a nonsense of S75 and thereby, the "will of parliament"!

 

Basically the creditor is using what I see as 'name obfuscation' to try and wriggle out of their S75 obligations and it's totally wrong.

[steampowered]

Did you pay the supplier directly? Or did you pay through paypal?

 

If you paid through paypal, my understanding is that s75 doesn't apply. You may find the FOS website useful: http://www.financial-ombudsman.org.uk/publications/technical_notes/goods-and-services-bought-with-credit.html

Edited April 18, 2013 by steampowered

[BRIGADIER2JCS]

Escalate the matter to a Formal Complaint, to get a ''final response'' after which you can involve the relevant regulatory bodies.

[bustthematrix]

Did you pay the supplier directly? Or did you pay through paypal?

 

If you paid through paypal, my understanding is that s75 doesn't apply. You may find the FOS website useful: http://www.financial-ombudsman.org.uk/publications/technical_notes/goods-and-services-bought-with-credit.html

Thanks.

I certainly did NOT pay via PayPal. I paid direct to the supplier. The first I heard of PayPal having anything to do with it is that their name is part of the text for the suppliers reference on my credit card statement.

 

As far as I'm concerned, PayPal is no more than a merchant/payment service used by the supplier in this transaction. For Mastercard to claim they are the Supplier under S75 seems ludicrous to me.

 

As already said, it's already been suggested by others that my view is correct and that there is case law which already confirms this. It's this case law/guidance I really need. I'm almost certain that if I can spout the case law to the Creditor, they'll back off and refund me. They do not dispute the fact that the Supplier has committed misrepresentation (hence my claim under S75), they're just saying the Supplier is PayPal which is utter tosh!

 

Site Team, can you help please?

[seanamarts]

they're just saying the Supplier is PayPal which is utter tosh!

 

Paypal are used for money transactions only, they do not supply any goods at all.

 

If said transaction did go through them then you would have a better chance of getting monies returned, any reason why they would mention paypal.

[seanamarts]

Sorry just reread your first post. Im just wondering if the transaction went through paypal on their side of things, even if you paid with your card, it could have gone to thier paypal account.

[bhall]

s.75 should apply as long as the payment was not processed via Paypal,

 

To make a claim under s.75 there must be a valid debtor (you) /creditor (your credit card provider) /supplier (the supplier of the ordered goods) relationship. Unfortunately Paypal breaks the links in that chain between the debtor and the supplier of the goods

 

When Paypal is used, the debtor buys electronic money from Paypal, so Paypal is the supplier in the debtor/creditor/supplier chain required for a s.75 claim to succeed. S.75 would then apply to the purchase of the electronic money rather than the purchase of goods.

 

If Paypal was used, all is not lost in terms of a refund. You could try (time permitting) to raise a claim via the Paypal Buyer Protection Scheme. Unfortunately this is a little hit and miss in terms of success

 

Alternatively, you could ask your credit card provider to trace the payment. This would determine if the payment was credited to a Paypal account or directly to the suppliers account.

Edited April 22, 2013 by bhall

[PRBrown]

s.75 should apply as long as the payment was not processed via Paypal,

 

To make a claim under s.75 there must be a valid debtor (you) /creditor (your credit card provider) /supplier (the supplier of the ordered goods) relationship. Unfortunately Paypal breaks the links in that chain between the debtor and the supplier of the goods

 

When Paypal is used, the debtor buys electronic money from Paypal, so Paypal is the supplier in the debtor/creditor/supplier chain required for a s.75 claim to succeed. S.75 would then apply to the purchase of the electronic money rather than the purchase of goods.

 

If Paypal was used, all is not lost in terms of a refund. You could try (time permitting) to raise a claim via the Paypal Buyer Protection Scheme. Unfortunately this is a little hit and miss in terms of success

 

Alternatively, you could ask your credit card provider to trace the payment. This would determine if the payment was credited to a Paypal account or directly to the suppliers account.

Misunderstood the original post about providing payment details directly to the supplier who then chose Paypal as the company to process that payment without your knowledge of who would process the payment. Just ignore my post. I understand the moral arguement, but I don't know the legal one in this case.

Edited April 23, 2013 by PRBrown
Misread the original post - please ignore me.

[bustthematrix]

Hi All

Thanks for your comments and input so far.

Just to be clear, I did NOT pay the supplier using PayPal. I paid using a credit card with card details filled in on a payment form, signed etc. PayPal was no where in sight.

 

PayPal only comes into it because it appears the supplier has used PayPal to 'process' the card payment in some way.

My card provider (creditor) is now alleging that PayPal is my supplier under S75 not the original supplier! This cannot be true and I'm told there's case law that addresses this and that's what I'm hunting for.

Many thanks all.

[bustthematrix]

Also, I can't go down the PayPal Buyer Protection route as this is not a PayPal transaction - there's no payment reference and no basis on which I can take this up direct with PayPal!!!

[ericsbrother]

your supplier is using paypal as a card payment processor a bit like I use RBS/streamline. I am fairly certain this does not create a contract with paypal just as no contract is created with RBS when my customers pay me via their auto system. It is clear that your supplier is avoiding refunding you and you are correctly holding the CC company equally liable. Now, their problem is that they cant do a chargeback to the supplier because paypal has got in their way so they are denying you your rights because they dont want to lose out. I think that this will need someone to intervene who has a bit of clout with the card company and possible even paypal. the financial agony aunts of the national newspapers may be your best bet as their contacts will have the means of reaching the right people in each organisation and get things moving.

If they cant help then a complaint to the FOS about the CC company.

[bustthematrix]

Thanks EB. I have a bit of a relationship with my MP, do you think a letter from him might help?

 

Another friend has suggested I MCOL them because he's confident a judge will agree with me. He thinks they'll payup before it gets to hearing, but still I'm looking for that precious s75 ruling - which addresses this issue in my(debtor's) favour - that I'm told exists somewhere!

[steampowered]

I had a brief look at the headnotes of all cases citing section 75 on a legal database and there was nothing which would assist you.

 

I am not confident which way this would go in court. For section 75 to apply there must be a debtor-creditor-supplier-relationship under section 12 of the Act. If there is no direct contractual relationship between the bank and the end supplier, because paypal sits in the middle, then there is no debtor-creditor-supplier relationship. There is an explanation of this near the bottom of the FOS link I posted earlier.

 

Pure payment processing services like WorldPay do not get involved in the process. Legally they act as an "agent" of the supplier. I suspect the situation with paypal will be different depending on how the payment was processed and what paypal's T&Cs say. I'm assuming you went through paypal's site at some point. Even though the result is the same as using WorldPay, if the debtor-creditor-supplier chain is broken there is no section 75 claim. This is a technicality but that is what section 75 says.

 

Writing to your MP would not serve anything because your card provider is not a public body. MPs won't get involved in private legal disputes.

 

Might be a good idea to have a chat with the FOS?

[bustthematrix]

I'm assuming you went through paypal's site at some point. Even though the result is the same as using WorldPay, if the debtor-creditor-supplier chain is broken there is no section 75 claim. This is a technicality but that is what section 75 says.

Thanks for your input steampowered.

 

As I've already stated, at no time did I go through PayPal or have anything to do with them myself. I paid direct to the supplier with my credit card, on a normal paper form with signature etc which many people use when paying with a credit card.

It seems the supplier I bought from, the training company - used them for payment processing. The first I heard of any involvement from PayPal is that my card company is claiming PayPal are the supplier.

[945trujcan]

The leading case law was the OFT case relating to 4-party transactions. The logic of the judgment extends quite naturally to 5- or more-party chains of arrangements, and this chain is not broken by the pretence that you are buying eMoney -- whether you are knowingly buying 'via' PayPal or not.

 

As it happens, I've just posted a blog which looks at the case law in a little more detail. The full OFT judgment is available freely online, but not so with the Truman judgment unfortunately. (I can't post a link just now as I've not posted often enough, I'm happy to provide a link via PM).

 

I think that the FOS are wrong on this one, although I obviously can't make any guarantee that the Courts will agree.

[bustthematrix]

945trujcan

 

Can please share more about both the OFT judgement AND the Truman judgement? Thanks

[945trujcan]

Sorry, looks like I'm not allowed to send a PM yet either! The article is entitled 'eMoney and s.75: Am I covered?' and although Google appears not to have picked it up yet, Bing has. Hope that helps.

[bustthematrix]

Hi

 

Is this your blog link to the above article?

 

http://conradmeehan.wordpress.com/2013/05/22/emoney-and-s-75-am-i-covered/

[bustthematrix]

Here it is more fully set out.

 

1. Relevant Case Law

 

Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2006] EWCA Civ 268 (22 March 2006)

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

 

2. Blog post that puts the above ruling into context.

 

http://conradmeehan.wordpress.com/2013/05/22/emoney-and-s-75-am-i-covered/

 

Is this what we've been looking for folks?

 

Rgds

S

[bustthematrix]

Office of Fair Trading v Lloyds TSB Bank Plc & Ors [2006] EWCA Civ 268 (22 March 2006)

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

I liked this bit...

"6. Summary

 

122

 

For these reasons 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. We therefore allow the appeal and dismiss the cross-appeal."

Emphasis mine!

[BRIGADIER2JCS]

Would seem conclusive if not superseded.

[bustthematrix]

Would seem conclusive if not superseded.

Please clarify? Where and when please?

[BRIGADIER2JCS]

Please clarify? Where and when please?

I would suggest checking that the case law has not been overturned by a more recent

case just to be on the safe side.

[BRIGADIER2JCS]

I'm of the opinion that section 75 applies however removed the payment may be.

[bustthematrix]

I would suggest checking that the case law has not been overturned by a more recent

case just to be on the safe side.

Phew! I thought you meant it already had!

Ok, will do my best but I'm not the best with Bailii.org and the others so if you can have a look too please?