Specialist Support - July 2017

What happens when a company goes into administration?
Specialist Support had a recent query regarding what happens to any money paid for goods if a company goes into Administration.
 
Recently a furniture store in Belfast went into Administration. This meant the store could no longer fulfil its financial obligations and all of the goods and monies at that time are being administered by a Trustee. Many people had ordered furniture, paid in full and were awaiting delivery. 


What are your rights if you have paid for goods and the shop goes into Administration?

If the goods have been paid for by cheque or cash you do not have any protection under the Consumer Credit Act. You effectively become a creditor. That is someone who is owed money and will be in the same position as the other people who are owed money by the furniture store.  When all assets of the company are sold and the fees of the Trustee are paid then any monies left over will be divided pro-rata to everyone who is owed money.
 
If  you paid by credit card and the amount you paid is over £100, it does not have to be for one item, it can consists of one or more items so long as the transaction is for £100 and under £30,000  you will be covered under Section 75 Consumer Credit Act 1974.
 
The Consumer Credit Act 1974 legislation - Section 75 states that by using a credit card there is joint and several liability. This means you claim from your credit card company for the amount you have paid and they in turn will claim from the company in Administration.
Should the credit card company reject the claim then you should refer your case to the Financial Ombudsman Service (FOS). There is no cost to do this.
 
FOS was set up by Parliament to resolve individual complaints between financial businesses and their customers. They can investigate most types of money matters – from payday loans to pensions, pet insurance to PPI – and if they decide someone’s been treated unfairly, they have legal powers to put things right. For more information about FOS you can call 0300 123 9 123 or 0800 023 4567 or visit their website.

Specialist Support NI is available to support all debt advisers, money advice workers and their managers/supervisors throughout Northern Ireland with any complex cases.
 
The Specialist Support is available by telephone 028 9064 5919 or email specialistsupport@adviceni.net. The service is available Monday, Tuesday, Wednesday 10.00am to 4.00pm, Thursday and Friday 10.00am to 1.00pm.