Credit card protections not extended to Paypal deals


Consumers who use credit cards with the online payment system Paypal have been warned that they will not be protected by the Consumer Credit Act.

What Consumer, a customer advice portal, explained that credit cards are generally protected by Section 75 of the act, which means that the credit card provider will pay out for transactions over £100 that go wrong -- such as goods turning out to be fake. However, consumers using credit cards to make purchases through Paypal will not be covered by the act, according to the What Consumer.

Paypal does have a protection scheme for buyers, but What Consumer claimed that it is "inadequate," as a dispute process must be started within 45 days of payment and can only be escalated within 20 days of the initial complaint being raised.

Rob Skinner, head of public relations for Paypal UK, told SC Magazine that the payment system is far from "unsecure."

"We have taken the time to explain to our customers how [buyer protection] works and how it benefits them, we're always looking at ways to improve communications with our customers and the benefits we offer as well," he added.


Published: 26 March 2009