Bennetts crisis: what are your rights as a customer?
PUBLISHED: 17:28 12 March 2011
Archant Norfolk Photographic Â© 2011
Consumers who have paid for goods but have not yet received them often lose out when a company goes into administration. Or they may have items that go wrong while still under warranty – but no supplier to take them back to. But all is not necessarily lost, even if the service provider is unable to fulfil its obligations.
Your first point of contact should always be the retailer. It may be hard getting a reply because things can often be chaotic when a business comes off the rails – and if you manage to get through to company employees rather than the administrators, don’t forget that they themselves are probably also victims. They might be losing their jobs, after all. If it looks as though you will not be getting what you have paid for (or if you cannot get an answer), you are still in a strong position if you paid by credit card (and the item you bought was worth more than £100).
Under Section 75 of the Consumer Credit Act, your credit card company is “jointly and severally liable” for any breach of contract by the supplier. That means you can put your claim to the card company and you should be refunded in full. Even if you made only part-payment for an item on your card, the entire item is covered under the act. So if you paid a £25 deposit for a flat-screen television on your credit card and then paid the balance of £500 with a cheque, only to find that you won’t be receiving your television after all, you can make a claim for the full £525 against your card provider.
If you paid with a debit card (or used a credit card for an item costing less than £100), you can attempt to get a refund via something called chargeback – although only the portion of the transaction you put on your card will be covered. Which?, the consumer rights group, said: “Chargeback is not enshrined in law like Section 75, but it is part of Scheme Rules, which participating banks subscribe to. It applies to all debit cards, although exact rules may vary between the Visa, Maestro and American Express networks. Chargeback also applies to credit cards and is particularly useful where Section 75 is not applicable – for goods costing less than £100, for instance.” A word of warning, though – don’t be put off if your card provider denies any knowledge of the chargeback scheme. According to Which?, it is less well known than Section 75, and bank staff might not be aware of it. Unfortunately, the news is less bright if you paid for goods or services by cash or cheque. It is certainly worth chasing the supplier or the administrators to see if there is any chance of receiving what you paid for, but it’s rare to get a refund. With most administrations, after all, the supplier has run out of money. The sad fact is that you are far less likely to get any joy than if you had paid for your goods with plastic.
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