Which are the safest ways to pay for things?

There are lots of different ways to pay for goods and services these days. Yet the way you pay can have a huge impact on your consumer rights - and on getting your money back if things go wrong. Here’s my guide.

Credit cards

Credit cards can charge you ludicrous levels of interest. However, they are the best way you can protect your purchases. That’s because the Consumer Credit Act says you can claim your money back from your card provider if the goods are misrepresented, don’t work or don’t turn up.

If you want to keep smiling while shopping this autumn, don't fall for scams (Picture: Adobe)

Each item you buy must cost over £100 and under £30,000. However, make sure you pay off the credit card before interest is applied.

There are, of course, lots of catches with these claims (known as ‘section 75 claims’). You have to buy direct from the seller of the goods and not use a third party company, for example. You aren’t guaranteed to get a refund either. But if you are worried about a business going under, it’s the best level of protection you have.

Debit cards and ‘chargeback’

There are two words to remember if you’ve paid for goods or services with a debit (or a credit) card: ‘chargeback’.

If you’ve been tricked or conned, things you’ve bought haven’t turned up, a firm looks like it’s going to go bust or a refund hasn’t materialised, just ask the card provider to charge back the money.

This is an industry-run scheme so it’s not the law, but it is considered to be ‘good practice’ – so you can go to the Financial Ombudsman if you’re not happy.

There are time limits for making a claim, usually 120 days from the date you make your purchase (this varies with some card providers). In addition, complaints over the quality of goods can be subjective. If it’s not straightforward, you might get sent back to the retailer to sort out the problem. Chargeback usually won’t work when a retailer has officially gone bust either.

Bank transfers

Transferring money from your online bank account or app might seem straightforward. But bank transfers are the favourite method scammers use to part you from your cash. That’s because once you’ve transferred the money, it’s much harder to get back.

Fraudsters know this – and a sure sign that you are dealing with a scammer is when they ask you to pay for things by bank transfer. Only use this function to pay people that you know well.

PayPal and e-payment services

E-payment services are another popular way to pay. These services are regulated and complaints are dealt with through each company’s dispute resolution schemes.

There are still ways that fraudsters can exploit the system though. PayPal’s ‘friends and family’ option is a way for you to transfer money to those close to you without the processing fees. However, this type of payment works in the same way as a bank transfer. So when the money has gone, it’s gone – leaving you nowhere to turn.

Again, many scammers will tell you to use the friends and family function and will offer you a discount to do so. Don’t fall for it.

Cash, cheques and wire transfers

If you use an international transfer service like Western Union, once you’ve sent money it’s not coming back. This method of transfer is often used in scams that suggest friends or family members are in trouble or stuck abroad. Only use the service if you are sure who you are sending the money to.

Cash payments are having a bit of a renaissance at the moment, but remember that you can’t prove you made a purchase unless you keep a receipt. Keep an eye on that change too for foreign or fake coins or notes.

Cheques and drafts can now be banked with scans or photos but still don’t formally clear for six working days, even though the money is available to spend on day four. So don’t hand over goods until you know the money is in your account for keeps.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. Read more from Martyn at this link.