In the aftermath of Made.com’s administration many customers of the company will be wondering what rights, if any, they have to a refund of any monies paid to it. It is understood that there are some 12,000 outstanding orders where customers have paid money (a deposit) to Made.com.
Generally, the starting position is that as Made.com is now in administration, those customers will be unsecured creditors of the company. This is an unenviable position to be in, as secured creditors will be paid out before unsecured creditors, who can expect a much lesser sum paid out to them after the secured creditors are paid. An argument was previously run that such deposits would be held on trust for those customers in an high profile insolvency some years ago (Farepak) in similar circumstances, thereby preserving those monies for them, but the High Court found that no such trust would arise for the benefit of those customers. There have been proposals for legislation to rectify the position but these are as yet unfulfilled.
It’s worth having a look at the terms and conditions with Made.com because if there were an express trust of the deposit, this may have priority in the insolvency.
If a customer had paid for the goods using a credit card, they may be able to rely on s75 of the Consumer Credit Act 1974 (CCA) for breach of contract. For s75 CCA to apply, the goods paid for must be over £100 but not more than £30,000. This is a claim against the credit card company. It does not apply to debit cards.
It is unlikely to have relevance in this case but customers who did not pay with a credit card, may be able to rely on s75A CCA, if they entered into an agreement to a finance agreement for the supply of those goods. However, they will first need to be sure that Made.com will not be paying them out, and the value of the goods must be above £30,000.
Those customers should also contact their bank to see if there is any way that their bank can reclaim that money from Made.com’s bank – a process known as chargeback.
Absent these remedies unfortunately customers will join the queue as creditors in the insolvency.
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