Is a PayPal payment protected?

I want to book a Spanish villa and this is the suggested method of payment

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 or write to Your Problems, The Observer, Kings Place, 90 York Way, London N1 9GU. Include an address and phone number.


Anna Tims

The GuardianTramp

Related Content

Article image
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

Anna Tims

19, May, 2013 @6:00 AM

Article image
Halifax’s incompetence has left me with a poor credit rating for months
A system error at the bank means my card applications were recorded as ‘hard searches’ on my credit history

Anna Tims

28, Dec, 2017 @7:00 AM

Article image
RBS reported me to three credit reference agencies for one missed payment
I have always paid off my credit card on time, but the bank refuses to send a notice of correction

Anna Tims

30, Aug, 2017 @6:00 AM

PayPal leaves a hole in the net

I paid for a mattress by credit card via PayPay but when it fell apart, I found I wasn't covered by consumer protection

Miles Brignall

28, Oct, 2011 @10:02 PM

Article image
PayPal says my mouse mat violates international sanctions
I ordered a ‘Persian rug’ pad from Etsy and then had to prove where it was made

Anna Tims

12, Aug, 2021 @6:00 AM

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

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

Article image
Caught between PayPal, eBay and Royal Mail over the return of a faulty phone
They all agree I should get my money back for a faulty phone … but won’t take responsibility

Anna Tims

11, Nov, 2020 @7:00 AM

Article image
Payment shock: bank customers could get zapped for overspending
New technology can link wearable device to bank accounts and give electric shocks to help customers manage their spending

Rupert Jones

19, May, 2016 @2:35 PM

Article image
PayPal snubbed me after a fraudster shut my account
Online bank offered a refund, but then said it couldn’t help as I didn’t have a PayPal account

Anna Tims

07, Nov, 2018 @5:59 AM