PAYPAL is a website which enables worldwide digital money transfers. However, those with a Paypal account should be wary, as credit card transfers over £100 on the site have no legal protection.
Many consumers like to pay by credit card as the plastic offers protection for purchases that cost between £100 and £30,000.
This means that the credit card provider is liable for the cost of the purchase if you don’t receive the item, if the item is faulty and the company refuses to help, or the company goes out of business.
These protections are available thanks to Section 75, which grants consumers this right.
This news comes after it was revealed that credit card charges will be banned, as of Saturday.
Section 75 does not apply to debit cards, which is why many people prefer to pay by credit - especially for expensive items.
Many people don’t know that using Paypal wavers your Section 75 rights, potentially leaving you seriously out of pocket.
This is because there is no direct link established in the purchases between the seller and the customer, due to the fact you are paying through a third party or agency.
Technically Paypal pays for the product, meaning you are not protected.
The same wavering of Section 75 rights goes for buying through other agencies too.
This can include buying tickets through a ticket agency or even booking flights via a travel agent.
Which? recommends: “Where possible, make any credit card payment direct to the company actually supplying the goods or services.”
He said: “While cash feels real, and convenient, it’s risky."
A woman once sent me an email desperate for help for her very nearly 90 year-old-dad. He’d paid a restaurant a decent sized cash deposit to book to celebrate his birthday with the family.
“The restaurant went bust beforehand and she wanted to know how to get his money back. Sadly I’d no answer. Had he paid by plastic, it’d have been different.”