I’m thinking of booking a villa in Spain for a week in July. It’s advertised through a third-party website and I am advised that payment to the owner can be made by credit card using PayPal.
Can you advise what protection is afforded to me if I choose to use this method. JH, Gloucester
You are wise to ask, for the fact is you lose vital protection by using a credit card to pay by PayPal. Generally speaking, if you pay £100 or more for an item or a service you are shielded by section 75 of the Consumer Credit Act if the transaction goes awry. This holds the card issuer jointly liable should the seller refuse to refund you and enables you to claim your money back via the bank.
Furthermore, if the card company refuses to cough up, you can take your case to the Financial Ombudsman Service rather than having to rely on the small claims court.
However, section 75 doesn’t apply if you pay a third-party agent such as PayPal, Amazon third-party sellers or a travel agent. Although PayPal will appear as the merchant on your credit card statement, it is merely an intermediary charged with passing your money on.
PayPal does offer its own protection, but this is not enshrined in law, nor is it as all embracing as Section 75. Decisions are taken solely at PayPal’s discretion and there is a 180-day time limit on filing a claim. You should, therefore, insist that you make the payment direct to the property owner via credit card.
If you need help email Anna Tims at your.problems@observer.co.uk or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.
