Know your rights if a company goes bust

It seems to be the case that as another week passes another well-known retailer goes into administration.

Clothing retailer's such as Republic has become another casualty during 2013, following in the unhappy footsteps of Jessops, Comet, Woolworths, Habitat and MFI, to name but a few.

But what about customers who have ordered or purchased goods from a store, only for it to go bust? What happens if you have purchased a faulty item from one of these stores?

Check out our tips below to ensure you know your consumer rights:

My goods are ordered and paid for. Is there any guarantee that I will get them?

• Whilst there is no actual guarantee, there may be a higher likelihood that you will receive your goods if the company has been placed into administration, but is still trading.

• Alternatively, if the company is placed into administration and has ceased trading, then it could depend on how far into the process your order is.

• If your goods are in sitting in a warehouse, ready to be sent, the company must send them to you as technically you have ownership. However, you may have to arrange for another craftsman to do any installation work, even is you have already paid for this.

• There is a chance you may not receive your goods if your order is still being processed. If this is the case, you will join the end of the list of the company's creditors (companies and people it owes money to).

• Your claim will sit behind secured creditors, insolvency practitioners and employees of the company and it is possible that you won't get all or any of your money back.

How can I get my money back?

There is no guarantee that you will get your money back, even if you have ordered your goods and paid for them. However, if you have paid by credit card or debit card, you may be able to claim back some or all of your money.

I am an existing customer with faulty goods. What are my rights?

• You may be able to gain a refund or replacement item if the company is in administration but still trading.

• If the company is in administration and is no longer trading, check any documentation you have. Check to see if there is a warranty from the manufacturer or another third party which is still valid.

• Items purchased on credit cards may be covered under section 75 of the Consumer Credit Act (see above), meaning you may be covered if your goods are faulty. This rule still applies if you no longer hold the credit card upon which the goods were purchased.

• Customers who make purchases with debit cards, less than 120 days prior to the company being placed into administration, may still be able to claim back money through the Mastercard or Visa chargeback schemes.

• If you are not covered under any of the above, you may have to lodge a claim with the company's administrators. Whilst this is still a valid option, there is still a chance you may not receive your money back.

I have valid store vouchers, what should I do with them?

• If the store is still open, spend them otherwise you may lose them.
  

What Next?

Check out which.co.uk consumer rights website for more information on reclaiming refunds and how to structure the refund letter.