Buying a computer, how safe is your money?

  jnevill 14:06 03 Feb 2009

During the current financial downturn several thousand people have lost money when companies holding deposits have gone bust. Under existing law unsecured creditors (i.e. customers) are last in the pecking order for money from the business. So the very people who can least afford to lose money are often left in the worst situation NO GOODS and NO MONEY BACK.

This situation is unfair, avoidable and cost-free to the taxpayer if the Government makes a simple change to the law. If the Government makes all consumer deposits (i.e. deposits paid by the public rather than by other businesses) automatically 'held in trust' for the customer the money will remain the customers' until the goods or services have been provided. In the event of a company going bust the administrators will be able to return the deposits before paying other bills.

The Government should adopt this policy because it will help restore customer confidence in purchasing larger items, it will protect the most vulnerable and it is morally right.
Credit cards companies should support this policy as it will mean fewer claims against them for deposits paid by credit card.
Businesses should support this policy as it will stimulate sales and can be implemented at little cost to them.

If you believe the law should be changed and shoppers should be treated fairly, please

Copy this message and forward to as many people as possible.

Sign the online petition at click here

Send this email to your MP asking them to support consumer deposits being held in trust. (Find your MP at click here)


  dagnammit 14:34 03 Feb 2009

I believe it's right that customers are last in the queue.

  GANDALF <|:-)> 14:59 03 Feb 2009

Simple solution..use a credit card...end of story.


  jnevill 15:11 03 Feb 2009

Unfortunately, not everyone has a credit card. Also you may want an accessory and the supplier wants paying up front before ordering it. If the cost is under £100 your credit card will not protect you.

  Forum Editor 18:07 03 Feb 2009

to get people to sign petitions, but in this case I'm going to make an exception because I can see that the proposal is aimed at helping consumers.

I very much doubt that it will succeed because I think such a scheme would be unworkable, but your thread can stay.

  Forum Editor 18:12 03 Feb 2009

is to ignore the request to copy the message and send to as many people as possible. There's nothing worse than receiving an email about something like this, especially when it has the names of dozens of recipients in the 'To' field. Their email addresses are there for anyone to see, and I am furious when someone puts my name in such a list.

In the interests of Spam control please do not forward such messages to your entire contact list.

  jnevill 18:18 03 Feb 2009

Thank you, much appreciated. And let me put address your concerns about the workability of the proposal. All the government has to do is pass a law stating that any deposit paid by a consumer to a business shall be deemed to be held in trust. The chancellor may even be able to do this with a statutory instrument - meaning parliamentary time and voting not required. No separate account is needed by the business just an accurate record of which customer has paid a deposit. When a business goes bust administrators are blocked from returning customers' money until other bills are paid but if the money is only held on trust it does not belong to the business and can be returned. It really is that simple, it just needs a government willing to put the customer over the taxman.

  Forum Editor 18:54 03 Feb 2009

willing to put the customer over the taxman"

And the occupational pension scheme, and the employees, and the mortgage company, and anyone else who happens to be a preferential or secured creditor.

"It really is that simple"

No, I'm afraid it's not, and I repeat - I very much doubt that such a scheme will be introduced.

  961 19:39 03 Feb 2009

For some time it has been clear that company law with regard to insolvency is in total disarray and needs urgent revision

The consumer who pays by credit card or Visa debit card gets a flying start insofar as someone else gets to shell out to him if his purchase goes pear shaped. But how much does this actually add to charges to all of us that use these cards for that very specific reason? And, to be truthful, why does he deserve this advantage against the guy who pays in cash or by cheque?

And why should the revenue and the vat man come first in front of the pension scheme and the employee?

And on what basis is it right that administrators are currently queueing to hop on the bandwaggon of arranging for a company to go into administration yet appear, reborn, a week later, sparkly new but, lo and behold, having ditched all the bills to their suppliers, large and small, many of whom will go out of business as a result?

Many of these examples occurred in the computer industry a few years ago but are now getting in to the plc company area

It all started with AAAplumbing in the yellow pages, who did a bunk with the deposits and morphed a week later with the same premises, same directors and the same BMW but called AAAplumbing24/7

It's time for new company law to stop all this, but a petition won't do it. Bend your MP's ear until he's sick of hearing about it

But, dagnammit, perhaps you'd tell me why customers should be last in the queue?

And, to be truthful, why can't there be a cap on what administrators are allowed to charge?

  jnevill 06:10 04 Feb 2009

I was probably being simplistic in my explanation that the existing system is easy to change but opinion counts for little if there is the political will (poll tax, congestion charge et al). Yes there are challenges but never has there been a better time to effect that change. Whilst it is true creditors higher in the pecking order would be against the change it should be remembered that the taxman and administrators get paid before them so by the time the money filters down even secured creditors can often end up with nothing and protected deposits may be the difference between a business surviving (thanks to increased sales) and going under. Realistically, the online petition alone will not make Brown/Darling change the law but if it brings the matter to public attention and encourages debate then anything is possible. Remember the underlying reasons for changing the law are valid – it will help stimulate business, protect the innocent and is morally right. And please, if you do pass the message to others please use the 'bcc' function on your email so you are not distributing everyone's email address.

This thread is now locked and can not be replied to.

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