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Online Credit Card Payment Protection


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In the UK anyone making a purchase over £100 with a credit card is covered under section 75 of the Consumer Credit Act 1974. Under section 75, in certain circumstances, the provider of credit is equally liable with the provider of goods or services in cases where there has been misrepresentation or a breach of contract.

On TV this morning they have highlighted that many websites etc use third party payment providers such as Skrill (example they gave) are not covered by section 75 of the Consumer Credit Act 1974 because the payment is taken by the third party (e.g. Skrill) and then passed on to the service/product provider. Becasue the payment doesn't go directly to the company/person providing the service or product but via a third party a claim under section 75 will be turned down by the credit card provider.

So anyone thinking they are automatically protected by section 75 when shopping online may well not be.

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In the majority of cases payments will go via a third party before it arrives in the account of the service/product provider. The usual process (simplified) is that it comes out of the customers credit card account, goes via central clearing (third party) to the providers bank.

Most companies are using a third party to get the money from the customer to themselves, as the majority of credit card companies use third party processors.

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