It is all too common these days for retailers to go into administration and it is imperative that consumers protect themselves and know what their right are if the shop they have ordered from goes bust.
It is not just the small shops that are closing down but large household names such as MFI, Woolworths and Zavvi; and there will many more shutting up shop throughout 2009.
Buying from a shop in administration
It is safe to buy from shops that have gone into administration, but you have to remember that you may not be able to get your money back even if an item is faulty. You will have to wait in line with the rest of the creditors and that assumes that the company hasn’t been completely wound down.
To protect yourself in these circumstances you have a number of options:
- If the item you are buying is more than £100 it is wise to pay by credit card to make the credit card company is equally liable under the Sale of Goods Act. This is a provision of the Consumer Credit Act 1974 as defined in Section 75.
- If the item is less than £100 or your don’t have a credit card you should pay using a Visa Debit Card as you will then be protected by the Visa Debit Chargeback Scheme. However, many banks continue to make it difficult for consumers to make a claim and many call centre staff do not know about it. It is also worth pointing that you have to make your claim within 120 days of the company going bust, so if the item becomes faulty on day 121 you won’t be covered.
- If you cannot pay by credit card or the item is below £100 then it might be worth considering buying an extended warranty for peace of mind. In fact, this is probably the only circumstance where we would recommend buying an extended warranty.
Your order hasn’t arrived and the shop has gone bust
It depends really on the exact situation and whether the item is available and ready to be delivered. If the shop is still trading while in administration the chances are you will get the goods. If you don’t and you can’t make a claim under section 75 of the Consumer Credit Act or the Visa Chargeback Scheme then you will be put on a list of creditors and you might get back a proportion of the amount you paid – hopefully all of it.
Returning goods
If you are returning something which you simply don’t like, chances are you won’t be able to. If the item is faulty, you still have the right to an exchange or a credit note, in line with your consumer rights. If however you would like a refund on a faulty item, this may well not be possible and you will have to register a claim with the administrators.
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If you have paid for goods by credit card and the company goes bust.
Does the original sale invoice for the goods have to have the same name as the name on the credit card used to pay for the purchase or is the Credit Card transaction slip sufficient to make claim from the Credit Card provider.
My example is that my credit card was used to purchase a kitchen using a trade account in my sons name.
Section 75 of the CCA governs transaction between the card holder and the supplier. Therefore the name on the invoice will be irrelevant. However S 75 covers only consumer credit agreements made with consumers or partnerships. Therefore if you are a limited company, you won’t benefit from protection.
Can you confirm for me that if I pay some of the balance of my holiday (minimum £100) by credit card and the remainder by other means (cash or debit card) – that in the event that the travel operator/agent goes bust we will be protected.
Thanks
The total value has to be over £100, you can pay as little as 1p on the credit card to be protected by Section 75 of the Consumer Credit Act.
I have a prolonged on going dispute with HSBC Mastercard & HSBC bank ref a full refund of monies lost when xl (travel city direct) went bust before we could take our holidays, we made low deposit on a credit card, then the rest on 3 payments with my debit card (all from same account) this was for 6 people (me,the wife, son, his fiancee & 2 friends of ours). the bank have made an offer of only refunding 2/3 of the money paid as they claim that sec75 of CCA 1974 only covers close family members! 1 are they talking rubbish? 2 as at this stage I can not afford court fees what can i do now as i am getting to the end of my tether.
Hi Malcolm,
There is no mention of non-family members being excluded in the Consumer Credit Act. Trading Standards will write a letter on your behalf to HSBC for a small fee – this should do the trick. Alternatively, if the transaction was less than £5000 you could go through the Small Claims Court, which is affordable.
This thread on the forum will be of interest: http://WHATCONSUMER.CO.UK/forum/holidays/876-xl-holiday-issue.html
I purchased some furniture from a company that has gone into administration and the furniture has not yet arrived. I paid by visa debit and so not covered for claiming back on my credit card. I am told there is little chance of me receiving the items and even less that i will get my money back.
The shop i purchased the items from still have display items on the shop floor. Can’t i just take those items as lets face it, i have paid for them.
What if:
I pay for a course using a bank loan
The firm providing the course goes bankrupt
I get a new job
The bank then offers alternative course
BUT I dont need it as I have a job
I can’t go on it as I am at work?
hi, i purchased some curtains of ebay, in the advert it stated that they where laura ashley and was in her catologue. The seller had 100% feedback so took the chance. when recieving them it not trade marks/labels at all stating they where laura ashley. And after numerous messages to the seller, i was told that (quote): “it is obvious that thay are laura ashley, with or without and trade marks, what does it matter anyway,and thats what i was told”.
I don’t know how to get a full refund, because as you can see, she stated in her advert that they WAS laura ashley , then after much messaging says other wise. They wasn’t that dear, but i really can not afford to loose that amount of cash(£65). I am having problems getting her to return the money and i have taken it to the resolution part within paypal, but its not looking good.
I paid for these through paypal via my barclays connect visa debit.
Can anyone advise on how to get my money for these items back please.
would appreciate any advise in advance
ps also the curtains where not in good condition asstated either, they where in a terrible state. Have report this to and the fact that they are fake, but don’t seem to be getting any where with ebay or paypal, can the bank or any other oragnisation help?
hi, i purchased some curtains of ebay, in the advert it stated that they where laura ashley and was in her catologue. The seller had 100% feedback so took the chance. when recieving them it not trade marks/labels at all stating they where laura ashley. And after numerous messages to the seller, i was told that (quote): “it is obvious that thay are laura ashley, with or without and trade marks, what does it matter anyway,and thats what i was told”.
I don’t know how to get a full refund, because as you can see, she stated in her advert that they WAS laura ashley , then after much messaging says other wise. They wasn’t that dear, but i really can not afford to loose that amount of cash(£65). I am having problems getting her to return the money and i have taken it to the resolution part within paypal, but its not looking good.
I paid for these through paypal via my barclays connect visa debit.
Can anyone advise on how to get my money for these items back please.
would appreciate any advise in advance
ps also the curtains where not in good condition asstated either, they where in a terrible state. Have report this to and the fact that they are fake, but don’t seem to be getting any where with ebay or paypal, can the bank or any other oragnisation help?
It is terrible when you buy from Ebay and you pay with Paypal because you think you are protected ( and you are not). I have had the same recent problem with a purchase for £332 the goods were stolen but Paypal does not want to know and Ebay does not want to know either.
A friend of mine informed me they threatened getting the police involved and the TV / media ( not good for their business ) a long shot I know but you have nothing to lose, the other thing is to post the curtains back recorded delivery keep receipt and email it to Ebay informing them the goods have been returned they have to refund you then.
Good luck
Bernadette.
Hi. I recently bought new kitchen units from Focus DIY who have now appointed administrators. They have sent the wrong end units. This was purchased on finance through them. What are my rights regarding getting them replaced, or can I withold any payments as the units are completly different to those ordered.
Regards
Martin
hi help pls my ps3 pad broken bought brand new one offical ps3 in offical pakageing 42.99 rejuced to 35.00 that pad broke went back shop gone sut down no falwading address rang sony up told them bought pad 3 weeks ago and retailer no longer there thay said it nowt to do with us we only cover consoles is this right were do i stand
ps sorry about spelling i am dislxic many thanks
hi, help
i bought a camera £299 off camerabox, yet they claimed i failed a security check- i then cancelled my order.
after this they (4days later) they took the money from my account, via direct debit.
i had not received any goods.
i wrote emails and letters, and called but tiresomely no reply.
then 2 weeks later i went on the website and they claimed they had gone into administration, 10 days after my order.
what is the next best step?
please help
Hi,
We have booked a holiday through a German tour operator, if we pay the deposit on our Mastercard(about £500) and the holiday company go bust, would we be covered for a full refund of the holiday? And, if not, would we be covered for a full refund if we paid for the whole holiday on the mastercard?
Thanks
Eve
Hi,
We ordered a bespoke 12′ settee costing £5000 from Sofa Workshop in Reading. This was delivered at the end of March 2011. By August, one end was sagging and it was then we found the shop had gone. It took me several months to find out that the company had been sold in administration to JC and MP Smith who refuse to accept any liability. We believe the company knew they were in trouble and the settee was constructed with substandard materials.
We bought this furniture on the basis it had a 25 yr guarantee on the framework (stated verbally and in their advertising material). They also sold us a stainguard guarantee which covers the framework but this does not kick in until the furniture is over 12 months old.
We paid by credit card but having tried to claim for a refund from Nationwide, they state that we must have it assessed by an independent furniture repairer. This will mean having it taken apart at our own cost with no guarantee that we will receive reimbursement.
What are our rights with regard to the credit card company? I am insisting on a refund based on the fact that the problems arose within six months of purchase but it took time to find out information about the supplier and manufacturer.
Advice would be much appreciated.
Deborah
jvc tv purchased 17 months ago from Comet. Tv now not working. Comet no longer trading and jvc say they are not responsible. Help?
We have the same issue with a Panasonic 15 months old comet in administration help???? Annoying as a known fault!!
My fiancee left her engagement ring with a jewellers to make a wedding ring to match. She received a handwritten receipt for it. The Jewellers have since gone into liquidation (two months before we were going to receive the newly made wedding ring).
We paid for the ring to be made via a credit card so will make an application for our money back via them but will the receivers keep the engagement ring? Will we have to wait in line as creditors to get our engagement ring back?
What is the situation when the company in administration is a concession in a store that is still trading and the money was paid to the store though the order is being managed by the concession via the store?