1 Confirm the details of the insolvency.
Find out if the company has officially closed its doors before filing a claim to obtain your money back from them.
When a business is put into administration, an insolvency practitioner is immediately appointed to the position of administrator.
You should make every effort to obtain the contact information of the administrator who is dealing with the firm, as they will be temporarily in charge of the company’s operations.
Find out if the company has entered into insolvency procedures, especially if it is a lone trader or a partnership. An example of a sole trader is a tradesperson who works on their own.
Checking the insolvency announcements section of local newspapers or the Individual Insolvency Register are also excellent options for accomplishing this goal.
You can research the company on Companies House if it is organised as a limited liability company.
Liquidation vs administration
The objective of the administration is to assist the company in repaying its debts in the hopes of avoiding insolvency.
If it is successful, administration can lead to the recovery of the company; nevertheless, unfortunately, most of the time administration results in the company being liquidated.
Before a corporation is totally dissolved, it must first go through the process of liquidation, which entails selling off all of its assets.
2 Submit a claim
In the event that the company has been put into liquidation, you will need to submit a letter to the administrator dealing with the company in order to register your claim. In the letter, you will need to specify the amount of money you are owed as well as the reason for the debt.
Because it is likely that the corporation owes a lot of money, there is no assurance that you will get any of your money back, let alone all of it.
However, if you do not submit a claim to the administrators in writing, then there is no way that you will be eligible to receive a refund of any of your money. We believe that you should give it a shot at the very least.
3 Security measures for credit cards
When compared to paying for products or services with cash or a check, using a credit or debit card affords you additional security in the event that something goes wrong with your transaction.
If something goes wrong with an item that you’ve purchased, you have the right to file a claim against the company that issued your credit card under Section 75 of the Consumer Credit Act.
Because of Section 75, if something goes wrong with your credit card, the company that issued the card will also be held jointly accountable. This indicates that it has the same level of responsibility for the products or services that you have purchased as the merchant or trader.
Therefore, if the retailer declares bankruptcy and the price of the goods or services you paid for was between one hundred and thirty thousand pounds, then you are eligible for the complete protection afforded by Section 75 and can make a claim against your credit card company.
You are welcome to make use of our letter form when writing to the corporation that issued your credit card with the specifics of your claim.
4 The only payment made was the credit card deposit
It is not necessary for you to have paid off the entire balance on your credit card. Even if you merely used your card to make a portion of the payment, like a deposit, the card company is still liable for the entire amount.
It is not the amount that is paid on the card but rather the worth of the items that are being purchased that is important.
If you ordered a new sofa from a furniture store, paid a deposit of £500 with your credit card, and then paid the balance of £1,000 by cheque, you would be covered for the entire £1,500 if the company went out of business and you didn’t receive your sofa. One example of this is if you paid a deposit of £500 with your credit card and then paid the balance of £1,000 by cheque.
5 Chargebacks for payments made with debit cards
If you paid with a debit card, you may also be eligible to make a claim by chargeback, provided that more than 120 days have not passed between the time you paid with your debit card and the time you made your claim.
Although chargeback is not codified in law, it is included in the Scheme Rules, which all participating banks are required to follow.
It is applicable to all things that can be purchased with a debit card, however the specific restrictions may differ between the networks used by Visa, Maestro, and American Express.
You may get additional information regarding the use of chargeback by reading our comprehensive guide.
6 Take care of any defective products.
If the store goes out of business while you still have faulty items purchased from them, you can still be covered under the guarantee offered by the manufacturer or another third party.
Check the documentation that came with the product to determine if this is the case; if it is, this may help you get a refund, a replacement, or the problem fixed.
You may be able to seek a replacement or a refund for your item in the normal way in accordance with the Consumer Rights Act if you have been supplied with faulty products notwithstanding the fact that the firm that supplied them to you has been placed into administration but is still in business.
How to lodge a complaint and get your money back in the event that a company fails to operate
1. Obtain information regarding insolvency; determine whether or not the company has indeed closed its doors for good, and obtain the name and address of the insolvency firm that has been appointed as administrator.
2. File a claim by writing to the administrator to register your claim and provide an explanation of exactly how much money you are owed and the purpose of the money.
3. Make use of your warranty; in the event that the merchant goes out of business and the items are defective, you may still be covered by the warranty offered by the manufacturer or another third party.
4. Make a claim under the Consumer Rights Act If you have been supplied with faulty goods and the company has been placed into administration but is still trading, you may be able to get a replacement or a refund for your item in the normal way by making a claim under the Consumer Rights Act. This is because the company is still allowed to trade after it has been put into administration.
5. File a claim with the credit card company. If you purchased the goods in question using a credit card and the supplier subsequently declares bankruptcy, you have the right to file a claim for a refund with the credit card company in accordance with Section 75 of the Consumer Credit Act.
6 Redeeming coupons in the event that a business fails
Having a voucher or gift card for a high street shop and then finding out that it will no longer be accepted because the chain has gone into administration is one of the most irritating things that can happen.
Even though they have previously taken consumers’ money to purchase the vouchers or gift cards in the past, several high street retailers have begun refusing to let customers use vouchers or gift cards once they have gone into administration.
7 If you have a voucher, why do they not accept it?
When large retail businesses in the high street go out of business, the administrators consider customers who have gift cards and vouchers to be debtors.
This indicates that in order to try to collect back any money that is owed to you, you will need to get in line with all of your other creditors, such as the Inland Revenue, mortgage firms, loan companies, and the government.
The administrators are obligated to treat all unsecured creditors in an equal manner and are prohibited from giving any one a higher priority than the others.
8 How can I retrieve the money that was deducted from my voucher?
If the retail store chain with which you are dealing would not accept your voucher or gift card and you did not pay for it using a debit or credit card, then you should submit a claim to the administrators of the programme in writing.
It is necessary for you to submit a claim to the administrators in writing together with evidence of your vouchers or gift cards.
The names of the administrators may typically be found on the website of the business that has entered administration. [Citation needed]
However, there is no assurance that you will get any of your money back, and the correct processing of the claim could take as long as a year. The time frame for this possibility is not specified.
This strategy, however, won’t be adopted by every single administrator. For example, Woolworths accepted vouchers up until the day it shut down, and the Adams network of children’s apparel stores accepted vouchers up to the day it went out of business.
If you did not purchase the voucher or gift card, you should get in touch with the person who did and inquire as to whether or not they paid for it with a debit or credit card; if they did, you should file a claim against the company that issued the card. If you did not purchase the voucher or gift card, you should ask the person who did.