If you were buying something, would you give cash to a company you’d never heard of without receiving the goods there and then? Probably not.
But if you pay by bank or money transfer, you’re taking a risk if you don’t know the company because there’s very little protection if things go wrong.
Here are some of the things you need to consider before making a bank transfer.
Contents
- What does paying by bank transfer involve?
- What kind of scams involve bank transfers?
- Why can’t I get my money back if I pay by bank transfer and change my mind?
- I thought I could get my money back if fraud was involved?
- How should I pay if I’m buying something from a company I’ve not dealt with before?
- How do I know if a website I’m buying from is safe?
What does paying by bank transfer involve?
Paying someone this way – usually online or by phone – means the money goes straight from your account to theirs. It’s not the same as paying over the phone by credit or debit card, or setting up a regular payment from your debit or credit card. It’s simply where you make a payment directly from your bank account to the person or company you’re buying something from.
What kind of scams involve bank transfers?
Unfortunately, the answer is a huge range of scams. One that is becoming more common is where a fraudster hijacks a solicitor or company’s email and asks a house buyer or someone having work done to make the deposit payment to a ‘new’ account. Another scam is a ‘vishing’ scam where someone is told to transfer money to a so-called safe account which turns out to be anything but safe. Find out more about scams in our guide Types of scam and how to avoid them.
Why can’t I get my money back if I pay by bank transfer and change my mind?
Paying online or over the phone where money is transferred directly from your account to the retailer/suppliers is similar to paying by cash in that there’s no consumer protection if things go wrong.
Since the beginning of the year, banks have transferred money between accounts in a matter of minutes and — if you have second thoughts — you would probably only be able to get the transaction stopped if you contacted the bank immediately. Even then you may be too late.
I thought I could get my money back if fraud was involved?
If money is taken from your bank account fraudulently, your bank must refund it unless it can show you have been grossly negligent. Unless it can show that the fraudulent transaction should be investigated further (to establish whether or not you were negligent) it must refund the money within days.
However, there’s no such obligation on the bank if you buy something from a person or company that turns out to be fraudulent.
How should I pay if I’m buying something from a company I’ve not dealt with before?
Pay by credit card, if you can. If you pay by credit card and the item costs £100 or more (but less than £30,000), and it doesn’t arrive, isn’t as described or the company selling it goes bust, you should be able to make a claim against your credit card provider under Section 75 of the Consumer Credit Act. This Act makes the credit card company equally liable if the contract is broken.
If you can’t make a claim under Section 75, because the items cost less than £100, or you paid by debit card, ask your credit or debit card company to make a ‘chargeback’. This essentially is a reversal of the transaction. There’s no lower limit as to how much the items must have cost, but there are time limits for making your claim (anything from 45 to 180 days from when you paid, depending on the brand of credit card).
It’s not a legal requirement for credit or debit card companies to offer chargeback, but the card brands (such as Visa etc) have decided to do this. Debit card transactions are also covered by chargeback.
How do I know if a website I’m buying from is safe?
There’s no guarantee, but there are some steps you can take to protect yourself.
1. Don’t assume that a website address that ends in .co.uk is owned by a company based in the UK. Anyone (virtually) can buy a .co.uk web address. It doesn’t tell you anything about where the company is based.
2. Look for a physical address and contact number. If the goods don’t arrive, you’ll probably want to be able to speak to someone, rather than only be able to send an email to its customer service department.
3. Find out what customers are saying. Type the company’s name into a search engine, and check out review sites. Add the name ‘problem’ or ‘complaint’ to double check. It doesn’t mean that you shouldn’t buy from the site just because there have been complaints, but if there are a lot of unhappy customers or there’s a common thread between the complaints, it may be better to buy from someone else.
4. Make sure the site accepts secure payments. This is a tricky one because different websites use different security systems. You can look for a golden padlock sign, which will normally be in the browser bar. However, the padlock system may appear elsewhere or the website may use a different security system that doesn’t produce the padlock symbol.