Thousands out of pocket as retailers go bust


Many shoppers face being out of pocket as four highstreet brands go bust in one week.

Fashion brands Internacionale, ModelZone and Ark, and furniture retailer Dwell, have all filed for administration. Consumers are urged to contact their credit card issuers for refunds if they are awaiting the delivery of goods.

Clothing group Internacionale, which has almost 150 stores, has filed a notice to appoint Ernst & Young as administrator. ModelZone, which has 47 stores nationwide, has appointed Deloitte. Begbies Traynor has been appointed as administrator for Ark and its 17 stores.

Meanwhile Dwell has confirmed Duff & Phelps as administrators following the closure of its 23 stores last week.

Out of pocket
Dwell customers are most affected by the news, as many are awaiting the delivery of goods purchased in store or through the website. Dwell has announced that it will not be honouring these purchases.

According to the Guardian, online orders were still being taken as late as last Wednesday evening, ahead of the company's announcement the following day that the website and stores were to close, and no further deliveries will be made.

Angry customers took to the firm's Facebook page to vent their frustration, accusing Dwell of taking money despite knowing it would be unable to meet orders.

One customer said they are awaiting the arrival of £2,500 worth of goods ordered last last week, while another had a refund agreed of a £750 bed in store two weeks ago but is still awaiting the arrival of funds in their account.

Credit card purchases
When a company goes into administration, anyone owed money or goods is classed as a creditor. Therefore those who have made purchases but not received their goods are advised to make a claim to the administrator to get their money back.

However, purchases made by credit card have additional protection. Under Section 75 of the Consumer Credit Act, credit card providers are jointly liable with the retailer if something goes wrong.

This means you can make a claim to your credit card company if you haven't received your goods. In the case of Dwell, where it has said orders won't be honoured, you can put in a claim immediately to your credit card company.

Goods costing more than £100 but not more than £30,000 and paid on credit card are protected under Section 75. Purchases where only the deposit has been paid by card are also covered for the full amount.

Debit card purchases
If you've paid by debit card, you can use the chargeback scheme to reclaim money. According to consumer group Which? chargeback is not enshrined in law but instead is part of what's known as Scheme Rules.

This means you can ask your bank to try and claw back the money you paid on debit card if you haven't received your goods. Use the Which? template letter to help you make a chargeback claim.

Returns and gift vouchers
Returns for faulty items are unlikely to be honored when a company goes into administration, but there's a couple of options. If the product came with a manufacturers warranty, you will be able to make a claim via the manufacturer.

Secondly, as mentioned above, if you paid by credit card you will be entitled to a refund as faulty goods are treated in the same manner as those that do not arrive.

The use of gift vouchers is unlikely to be permitted when retail firms are in administration, even those will stores that remain open. You will be treated as any other creditor and advised to contact the administrator to make a claim.

Creditor claims can take up to 12 months to be processed by administrators.

Beware the small print

Beware the small print