Retailer in administration – your rights

BHS your rights when a company goes into administration

 

With the news last week of BHS going into administration following close behind Austin Reed, I thought it would be useful to provide details on your rights.

 

Gift vouchers

  • If the voucher is for any amount over £100 and was paid for by credit card then you have protection from the credit company under Section 75 of the Consumer Credit Act.
  • It is possible that if you paid through your bank you could get your money back through Cashback. This is a voluntary scheme and you will need to check with your bank.
  • If the company is taken over by another one it does not have to honour the voucher but always worth checking. They may well be of the opinion that if they honour the voucher that you will return and if they don’t you will not go there ever and tell your friends so!
  • If you have bought your vouchers through a third party website it is worth contacting them. They do not legally have to refund you the money but they may as a goodwill gesture.
  • If the company isn’t honouring vouchers contact the administration company as soon as possible. You will be added to the creditors list, along with staff wages, the taxman etc., so it is highly unlikely that you will get your money but you have no chance at all if you don’t register your interest!
  • Keep hold of your vouchers. Even if the company goes into an administration a buyer may be found which may honour the vouchers.

Still selling whilst in administration

  • Your rights remain the same. If an item has become faulty you are covered by the Consumer Rights Act 2015. However the administrators may just add you to the creditors list.
  • You have protection from the credit company under Section 75 of the Consumer Credit Act if you bought the item on a credit card and the item was more than £100.
  • It is possible that if you paid through your bank you could get your money back through Cashback. This is a voluntary scheme and you will need to check with your bank.
  • The administrators will want to raise as much cash as possible so will continue to sell goods if trader is a retailer. This is where you may find some bargains and if you buy online you should still be able to return within 14 days under the Consumer Contracts Regulations. 
  • Remember though, that if any item you buy becomes faulty you may well not be able to return it if no buyer is found for the retailer!

Half way through a purchase or service

  • If you have ordered a conservatory and it is half built, you might well be stuck. It will be down to the administrators as to whether they will honour the rest of the work or whether you join the creditors.
  • If you have bought an item it may depend on where your purchase is in the system and what the administrators decide to do.
  • See above for claiming from the credit card company or bank. You may also be able to claim for finishing off the work.

Move quickly

  • Soon as you hear a company may be in trouble use your gift vouchers.
  • If you have had that broken item ready to return sitting around waiting to be taken back do it soon as possible.
  • If you need to register as a creditor do it quickly. Remember though that you will be very low down the list and if you do get anything back it will be a percentage of the amount. Some administrators will see giving the majority of people a small return rather than fewer people a large percentage as a fairer way of spreading the money left.
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