The Observer letters section on 24th June 2012, highlights the lack of consumer protection for PayPal users.
Consumers are not protected under Section 75 of the 1974 consumer credit card act when using PayPal, unlike when you use a Visa or Mastercard credit card, as a means of payment. Click here
Does Paypal actually offer extra protection? Click here
If you pay for an item costing £100 or more using your credit card, you are protected under Section 75 of the Consumer Credit Act. So if the retailer goes bust, fails to deliver the goods or the goods it supplies are not up to scratch, you have the statutory right to compensation from your credit card provider.
But this statutory right does NOT apply if you pay for something on your credit card via Paypal. In this case, the very safeguard you sought - having a middleman - means you no longer have a direct, legal contract with your credit card provider.
Inst Further article on PayPal's lack of consumer protection click here , you will have to make a claim for compensation with Paypal. And that means Paypal gets to decide whether your dispute is valid. You no longer have the protection of the law.
Posted by Bruce Gibson