A friend of mine asked me for advice on PayPal disputes, which raises a few interesting points for consideration.


He lives in the Isle of Man and ordered a product from a supplier in the UK. He returned it with a tracking number and has not received a response by e-mail through PayPal or a refund.

The dispute escalated, the seller reported my friend to the Isle of Man Constabulary for fraud and the Police paid him a visit at his home address.



My initial response was, “I would raise it as a fraudulent transaction with PayPal and try and contact the supplier direct. If you paid by credit card direct for over £100, the card provider is jointly and severally liable under Section 75 of the Consumer Credit Act 1974 for breach of contract and you can enact a chargeback. Small Claims Court is also an option if all else fails”.

This elicited the following reply, “I have tried to contact the supplier through PayPal but they have not given me a solution. Do I open a dispute with PayPal or do I contact my credit card and do a chargeback? If this got lost in the post, who is liable for the goods returned as I have returned them? Am I still covered by the credit card company?”

My answer was, “Open a dispute with PayPal and contact the credit card to try and enact a chargeback if it’s over £100. You should have returned it tracked. If not, just pursue it down those avenues and see how you get on as you are still covered for breach of contract”.


The nub of this is that you need to have been seen to have exhausted all avenues before trying to enact a chargeback under Section 75 of the Consumer Credit Act 1974, which holds the credit card company jointly and severally liable for purchases over £100 that have failed due to a breach of contract. This only applies if you have entered in to a contract direct with the supplier. You cannot do this if you enter in to a tri-party contract via PayPal.

The Small Claims Court is the final and nuclear option. You need to demonstrate that you have tried everything possible to resolve your dispute as this is factored as a consideration in any judgements made.

You need to return any products by tracked recorded delivery to evidence proof of purchase because it makes it difficult to resolve a dispute otherwise. It’s nigh on impossible to resolve a disputed breach of contract if a product has been lost in the post, even though a breach of contract initiated the chain of events.

Nevertheless, you could still try and enact a chargeback with your credit card company. It is likely that the supplier would simply say that they supplied the product and will have evidence of that with no proof of a return being made or received.

I have also covered Facebook fraud, Amazon fraud, SIM phone card scams and other types of fraud in this blog.

Have you been involved in PayPal disputes? If so, what was the outcome?

Pin It on Pinterest

Share This

Share this post with your friends!