Ways to pay
Each method of payment - cash, cheque, card, in shops, on line or by telephone - has it’s own risk.
- Writing payment card details on a form or giving details over the phone is inherently less secure that using a secure web site due to the human interactions involved.
- Giving your debit card bank or other account details to another person may lead to fraud.
- Never email card details to a company (or person) - they should have a secure web site.
- When buying online, make sure that you are using a secure web site. Look for a green address bar with padlock showing the exact name of the company you are trading with and web address beginning HTTPS: one letter difference can mean fraud.
Paying by Card
Debit and Credit cards function in the same way but there are differences.
- Debit cards are usually linked to bank accounts and fraud can result in holders becoming overdrawn and not able to withdraw cash whilst waiting for a replacement card.
- Problems with debit cards may also mean that normal automated bank payments are rejected.
- Credit cards provide extra security if the item or service you are buying is priced over £100 and at or under £30,000.
- Through Section 75 of the Consumer Credit Act 1974, the credit card company will be jointly liable for the goods or services purchased and must redress you in case of any problems or issues in the same way that the seller is liable. There is no time limit and the seller and credit card company are both liable. This right applies even if you only part pay by credit card and the remainder in cash.
- Note that most companies use a ‘payment services provider’ to process their on-line payments. This may not be apparent to the user but is secure.
- Beware, if you pay with a credit card through an intermediary, such as PayPal or Google checkout, you do not benefit from the Section 75 protection. It applies only if you pay the seller with the credit card directly.
New rules introduced in November 2007, now make cheque payments safer.
- Cheques now take 6 working days to fully clear.
- Do not issue refunds on cheques until at least 7 working days have elapsed.
- Make certain that the money is in your account.
Checking Bank Details
Bank sort codes may be checked using the Payment council’s sort code checker.
If receiving a bank draft, it needs to be from a UK bank. Ensure that you check with your bank before parting with your goods. For private transactions this is not a recommended means of payment.
- Drafts can be recalled at any time after they have been received, even as many as 2 years after they were created.
- You cannot 100% safely trust any draft from a foreign bank. Months, even years, after it has been credited to your account it could be recalled.
Using a money transfer service is a way to send money to people that you know and trust. Money transfer providers offer fast, convenient and reliable options for consumers to send and receive money worldwide. Money transfer services are often used by fraudsters in connection with many types of fraud.
Whilst the receiver of the money has to produce ID, fraudsters use forged documents and give false addresses in order to collect the money, which is then untraceable.
- Never let a fraudster educate you on how a money transfer service works - only take advice from the money transfer company.
- Never ignore the warnings or make false statements on money transfer documents. The information is there to protect you.
- Do not pay for items bought online, including via Auction sites, using a money transfer service. Providers of money transfer services are not responsible for the satisfactory receipt of goods or services paid for by means of a money transfer.
- Never share details of a money transfer with a third party to prove the availability of funds. Doing so may enable the money transfer to be paid to that third party. This is known as a ‘Proof of Funds’ fraud.
Many people become victims of fraud due to a relationship they have over the internet. This may be persuasive selling or a long term romance scam lasting months.
Escrow is a secure payment service where the money is held by a trusted third party during the time in which goods are delivered or services are provided.
- The Escrow Service must be FSA Authorised
If you are buying a second-hand car privately, paying a builder, buying a ticket etc, or anytime the seller cannot take credit card payment, then genuine FSA Authorised escrow services offer protection – both for you as the buyer and to the seller to ensure that they receive their full payment due.
There are many fraudulent escrow services around, most of them also offer to ship goods and have elaborate, impressive web sites.
Always follow these rules when dealing with an escrow service:
- Only deal with an escrow service listed on the FSA online register as an Authorised Payment Institution.
- Escrow services listed on the FSA register as Small Payment Institutions do not offer the same level of protection and security as FSA Authorised Payment Institutions.
- If the name of a website is not listed exactly on the FSA online register, then do not use it – it is almost certainly a scam and fraud. Even one letter difference means a fraudulent escrow website.
- Make sure that you are using a secure web site. Look for a green address bar and a padlock showing the exact name of the company you are trading with and web address beginning HTTPS:
- Never trust a phone-call or email, even from a genuine escrow service. A genuine escrow service will never give you payment instructions over the phone or by email – only on their secure website.
Follow these tips in setting up the escrow transaction:
- Agree a competent and fair referee is set as the arbitrator, should the transaction come to dispute.
- Ensure that the escrow conditions cover and protect you against every eventuality. Once your money is gone from escrow, you no longer have any protection. So don’t allow payment to the seller until you are absolutely certain that the agreed conditions have and will be met.
- It is quite possible to safely buy something worthless through escrow and pay a large and significant sum of money for it. Escrow only protects your payment, ensures you get what you were promised, but does not guarantee the quality of the product or service, after final payment has been made.
- Buying with escrow means that you are sure of getting everything you were promised in the escrow conditions, or your money back.
(Source: Met Police)