Administration is a very powerful solution which helps insolvent companies reorganise the business and manage debt. This procedure allows a struggling organisation to be restructured.
If you’ve ordered something from a company that has just entered administration, it can be frustrating trying to get your money back, let alone knowing who to contact. If you find yourself in this irritating situation, then it’s essential to look at all the options available to consumers when a business gets in trouble.
Firstly, what is administration?
When a company goes into administration, it is often because the business has struggled with cash flow, racked up debt or has been threatened with legal actions. Administrators (licensed insolvency practitioners) take control of the business and will look to restructure and sell assets to pay off creditors (lenders). There may be closing down sales to sell off remaining stock so look out for any notices.
What do I do if I’ve ordered something?
If you’ve purchased the item with a credit card, contact your provider to arrange a refund, if possible, and always keep receipts in case you need to claim. To make a successful claim, the single item or service has to be valued at £100 or over, however if you’ve only paid part of the purchase with a credit card (and it’s less or more than £100), you can still claim. The credit card provider will be liable under section 75 of the Consumer Credit Act.
If you’ve used a debit card or the price of the item was below £100, you may be able to claim using the chargeback system (your bank claims from the bank that received the payment).
Can I still refund items?
If you want a refund on an item you’ve already purchased, it’s unlikely you’ll be able to return anything under the usual company policy, however, you may be able to make a claim with the administrators. There is no guarantee you will get anything back though as it depends on the company’s financial situation.
Customers are usually at the back of the line when it comes to retrieving money owed; creditors (lenders, banks, etc.) and employees are among those looked at first.
If you’re not sure how you can get your money back, find out who is handling the administration and contact them. They should have a website, phone number and email address or a customer support contact. The company itself may also have set up a customer services hotline.
About the Author:
Claire Moore is a Marketing Executive for the KSA Group, based in the City of London. KSA Group are corporate recovery experts and licensed insolvency practitioners. Claire has a huge passion for business and finance and enjoys writing about these subjects.