PayPal was no friend in need

We thought we were protected by paying through PayPal – but it won't return money taken by bogus MMA car insurance brokers

My son took out a £1,300 car insurance policy – or so he thought – with the insurer MMA. I encouraged him to play safe and use my PayPal account for the transaction. After a couple of months, he discovered that the car was not insured. MMA claimed he had been a victim of fraudulent brokers, who had set up bogus policies in MMA's name, and that police were investigating similar cases.

Since he can't afford new insurance he has had to sell his car. I contacted PayPal, who said they couldn't help as I was outside their 45-day period for claiming a refund. I always thought PayPal was the best method, but now I wish I'd used my credit card. It will take me a long time to save £1,300 again. LB, Hyde, Cheshire

• I bought a balloon trip voucher as a Christmas present for my son and his girlfriend and paid the £181.99 through PayPal. Two days before the booked flight the company, Go Ballooning, went into administration. PayPal insists the claim is not valid because it was made outside of its 45-day refund window, even though the voucher is valid for one year and the company only operated flights between April and October. Is there any way I can reclaim my money? JW, Hertford, Hertfordshire

"The safest way to pay," boasts PayPal. Baloney! If both of you had paid directly for your purchases by credit card you would have been protected by Section 75 of the Consumer Credit Act, which does not impose a deadline for refund claims when a contract is breached. And Mastercard, Visa and American Express allow up to 120 days for debit card customers to lodge a claim.

Moreover, unlike the bank card schemes, PayPal protection only covers goods, not services, so even if circumstances had allowed you to lodge a complaint in time you would not have been covered.

PayPal, after pondering its own logic for six weeks, says its safety claims are based on the fact that users don't have to disclose their card details to individual traders. It insists its 45-day rule was calculated to allow buyers enough time to identify a problem and lodge a complaint without incommoding sellers with too lengthy a dispute period. However, PayPal, as a one-off goodwill gesture, has offered JW a full refund. MMA says that you, LB, are the victim of "ghost broking" in which customers are deceived into buying non-existent insurance. Sadly, in your case, no refund is forthcoming.

If you need help email Anna Tims at or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number. We regret Anna cannot reply to letters individually.


Anna Tims

The GuardianTramp

Related Content

Article image
Cash request from a Facebook ‘friend’ left me £300 out of pocket
I was defrauded by a hacker posing as someone I knew who said he needed help

Anna Tims

03, Jul, 2019 @6:00 AM

PayPal was no friend when I needed some protection
The company that sold me my tickets went into administration. Now I can't get my money back

Anna Tims

10, Mar, 2013 @6:59 AM

I need my money but PayPal has frozen me out

I used PayPal to transfer money from my Australian account to use in the UK, but can't get it out

Margaret Dibben

16, Jul, 2011 @9:59 PM

Parked and taken for a ride over dodgy whiplash insurance claim
Why is Admiral is insisting on shared liability after woman reserves into parked car at 3mph – and then claims for whiplash

Anna Tims

20, Oct, 2012 @9:59 PM

Article image
PayPal refused protection as a known fraudster bags my £3,100
I lost my Dior tote and eBay refunded me but PayPal is issuing a chargeback

Anna Tims

16, Oct, 2019 @8:00 AM

Article image
Is a PayPal payment protected?
I want to book a Spanish villa and this is the suggested method of payment

Anna Tims

26, May, 2016 @6:00 AM

Article image
‘Help form’ of little assistance in getting Asos coat refund
Asos says it has cancelled by coat order – so why haven’t I got back my £40 payment?

Anna Tims

24, Dec, 2014 @7:00 AM

Article image
PayPal refund disguises real reason behind missing money

I made a payment which disappeared, but PayPal have been less than helpful in sorting it out

Anna Tims

01, Sep, 2013 @6:00 AM

Article image
When is Airbnb not Airbnb? When it suddenly turns into a scam email
We thought we had made a legitimate booking through the site … now we have lost £824

Anna Tims

13, May, 2015 @6:00 AM

Article image
Sky scam warning: late-night caller wanted my bank details

Beware message advising you need a replacement viewing card

Anna Tims

16, Mar, 2014 @7:00 AM