Not upheld: buyer protection claim denial complaint against PayPal UK Ltd

Decision detail

Summary

Ms P paid a builder via PayPal for custom-made building work that was not completed and was of poor standard. She raised multiple buyer protection claims, which PayPal declined. Ms P subsequently obtained a court judgement against the builder for breach of the Consumer Rights Act 2015 and complained to the FOS. The ombudsman upheld PayPal's decision, finding that the payments were ineligible under PayPal's buyer protection policy, which explicitly excludes custom-made items. Although sympathetic to Ms P's situation, the ombudsman concluded that PayPal had no obligation to refund and suggested Ms P pursue enforcement of her court judgement instead.

The Ombudsman's reasoning

PayPal's buyer protection is a contractual term, not a statutory right. The policy explicitly excludes 'Significantly not as described' claims for wholly or partly custom-made items. Ms P's payments were for custom-made building work (labour, materials, deposit, and regulatory agreements), making them ineligible. Although the ombudsman acknowledged the poor quality and incomplete work, and accepted Ms P felt defrauded, this does not extend PayPal's buyer protection to cover the transaction. The court judgement against the builder does not create an obligation for PayPal to refund, as PayPal merely facilitated payments and did not supply the service. Additionally, the judgement prevents double recovery under buyer protection.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website