Which? uses cookies to improve our sites and by continuing you agree to our cookies policy

Your rights when companies go bust

Advice on Habitat, Homeform Group and other stores

Credit card payment, section 75 protection

When you pay by credit card your cash will be protected under Section 75 of the Consumer Credit Act

The past week has seen a selection of British businesses enter administration, potentially leaving thousands of consumers out of pocket. 

Here’s what to do if you’ve been affected by the financial difficulties facing Habitat, Homeform Group, Jane Norman and TJ Hughes – plus a simple guide to your rights in case companies you’re dealing with go bust in the future.

Information for Habitat customers

Habitat went into administration on 24 June. Zolfo Cooper, the company called in to facilitate this, has issued a statement to customers which confirms that all existing orders and Habitat vouchers will be honoured.

Of Habitat’s 33 stories, three based in London have been sold and will remain open. Habitat’s intellectual property, online shop and some of its stock have also been sold, but it is not yet clear what will happen to the remaining parts of the business.

Homeform Group: Moben, Dolphin, Sharps Bedrooms and Kitchens Direct

Homeform Group’s brands include Moben, Dolphin, Sharps Bedrooms and Kitchens Direct. It seems no administrators have yet been appointed and so, at present, the company’s directors are still in charge of its finances.

It is not yet clear how customers who have paid deposits to, or placed orders with, any of these brands will be affected by Homeform Group’s collapse – though it is rumoured that a deal to save Sharps Bedrooms may be reached.

If you have placed an order with Homeform Group and want to know where you stand, you can contact the firm on 0845 603 3020.

Information for Jane Norman customers

Zolfo Cooper has also been appointed as administrator for Jane Norman, the high street fashion chain that went bust on 27 June.

According to a statement on its website, 33 Jane Norman stores have been sold to the Edinburgh Woollen Mill which has also purchased the firm’s stock. A further 28 Jane Norman shops may be bought by Edinburgh Woollen Mill, along with a number of its department store concessions. For the time being, and with a view to this purchase, Jane Normal concessions in Debenhams stores will continue to trade.

33 Jane Norman stores will close as a consequence of the administration, and it is not yet clear whether customers with outstanding orders or in possession of vouchers will have their purchases honoured.

TJ Hughes enters administration

Ernst & Young were appointed administrators for TJ Hughes this morning, after the company announced its intention to file for bankruptcy earlier this week.

TJ Hughes’ 57 stores will remain open while potential buyers for the brand discuss its future. Ernst & Young has said it hopes to sell the business as a going concern, but it is not yet clear where customers of TJ Hughes stand if they have outstanding orders.

Your rights when companies go bust

If you paid for goods you have not received, or put down a deposit for them using a credit card, you should be able to claim your cash back in full from your credit card provider under Section 75 of the Consumer Credit Act.

This applies to transactions where the item(s) purchased cost between £100 and £30,000 – even if you only paid as little as £1 towards this using your credit card.

For more information on how Section 75 works and how to put in a claim, read the Which? guide to your rights when paying by credit card.

If you paid by debit card for your items, you could investigate the possibility of putting in a chargeback claim – though this is likely to be more difficult than claiming under Section 75.

Your rights if you paid by cash or cheque

If you paid by cash or cheque for your goods, there is unfortunately no guarantee that you will receive them or that you will get your money back. You’re likely to be one of many people in line for a payout from the administrators after a company goes bust.

If you ordered goods that are waiting to be dispatched, and which are clearly labelled with your name, the company is legally obliged to honour your order. This is because, technically, ownership of the goods you have purchased will have passed to you.

Under other circumstances, you’ll need to register your claim with whichever firm is administrating a retailer’s bankruptcy and wait to see what you can get. It’s possible you will get a proportion of your money back, but you aren’t likely to get the whole amount. 

Which? Money expert Martyn Saville says: ‘This spate of company bankruptcies is bad news for British consumers, many of whom stand to lose out in more ways than one as familiar high street brands enter administration.

‘In these tough economic times, my top tip is that people should – wherever possible – always pay for goods and services using a credit card so you’ll benefit from Section 75 protection should something go wrong. Even if you only pay for a small part of your total purchase in this way, you’ll have enhanced rights in a situation like the one facing many consumers at the moment – and there is no reason why you shouldn’t pay off your card in full at the end of the month to avoid interest charges.’

For expert legal advice on an array of consumer issues whenever you need it, why not join Which? Legal service?

pound coins

Which? Money – Live pensions Q&A

Are you baffled by state pensions or Sipps? Are you worried about being able save enough for your retirement? Whatever your pension questions, Which? experts will be on hand to answer them during our live Q&A on Friday 1 July. 

Sign up now to take part in this exclusive event for members at www.which.co.uk/pensionsqanda, or log on at 12.30pm on the day to get involved.

Back to top