Section 75 rights – Think Twice Before Using PayPal with Your Credit Card

Disclaimer:
While we’ve made every effort to ensure the accuracy of this information, it does not constitute legal advice specific to your situation. Any actions you take based on this article are at your own risk. We cannot accept responsibility for any loss or damage resulting from its use.

You Could Be Losing Valuable Consumer Protection

What Is Section 75?

According to the Consumer Credit Act 1974, the card issuer must help you recover your money in these scenarios.

Note: Section 75 only applies to credit cards—not debit cards, prepaid cards, or payments made with cash or cheques. Debit card users might instead rely on the less robust chargeback scheme.

When Does Section 75 Apply?

To qualify for Section 75, a direct relationship must exist between:

• You (the debtor),
• The card provider (the creditor),
• And The retailer (the supplier).

This relationship is often called the DCS link. If that link is broken—such as when a third party processes the payment—your rights may be voided.

For instance, paying a shop directly with a credit card keeps that link intact. But if you take out a loan and then use the funds to buy something, the legal connection is lost.

Why PayPal Puts Your Rights at Risk

When you use PayPal, you’re not technically paying the retailer—you’re paying PayPal, which then pays the seller. This interruption in the payment chain can invalidate the direct link needed for Section 75 to apply.

🔎 When You ARE Protected Using PayPal

✅ PayPal as a Payment Processor Without Logging In
If you use your credit card at a retailer's checkout and don’t log into PayPal, but PayPal simply processes the payment in the background, you may still be covered.

✅ Using PayPal Credit
PayPal Credit (introduced in the UK in 2016) is treated like a credit card and qualifies for Section 75. This protection applies only when the payment comes from the PayPal Credit balance—not your PayPal balance or a linked card.

⚠️ Grey Areas

⚠️ Logged into PayPal, But It's a Payment Processor
If you were logged into your PayPal account while making the purchase, it becomes less clear whether PayPal was acting merely as a processor or as an intermediary. Some providers might still honour Section 75, but there’s no guarantee.

❌ When You Are NOT Covered

✅ Best Practice: If in Doubt, Log Out

To ensure Section 75 eligibility when paying via PayPal:

• Avoid logging in to PayPal if possible.
• Use your credit card directly at checkout.
• Use PayPal Credit only if you're familiar with how it works.

Is PayPal Buyer Protection Enough?

How to Make a Section 75 Claim

If you think you're eligible:

• Contact your credit card provider directly, not PayPal.
• This can usually be done via online banking, mobile apps, or phone.
• Include:
  • Retailer name
  • What you bought
  • What went wrong (with evidence)
  • Total amount paid

If unresolved after 8 weeks, escalate your claim to the Financial Ombudsman Service

Using other Payment Methods: Are You Covered by Section 75?

“Modern payment methods can complicate your rights.

Always consider the chain.”

FAQs

Does chargeback apply to PayPal purchases?

Yes—but only if the card is used directly. If you fund PayPal from a card, but then use the balance, chargeback won’t apply.

What’s the best credit card for protection?

Any credit card will do, but if you don’t carry a balance, consider using a cashback credit card. If you do borrow, look for one with 0% on purchases.

Conclusion

• Use your credit card directly, or
• Use PayPal Credit, or
• Log out of PayPal when checking out.