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Shoppers 'need more protection' Shoppers 'need more protection'
(1 day later)
A watchdog has called for more protection for shoppers who pay for goods in advance but lose their money when a business collapses.A watchdog has called for more protection for shoppers who pay for goods in advance but lose their money when a business collapses.
One in 10 consumers who paid upfront during the last two years have not received their order, a poll of 16,010 people for Consumer Focus found.One in 10 consumers who paid upfront during the last two years have not received their order, a poll of 16,010 people for Consumer Focus found.
Just under half of those did not get any money back, losing an average of £242 each, the group said.Just under half of those did not get any money back, losing an average of £242 each, the group said.
In the UK, 24.5 million prepayment transactions are made each year.In the UK, 24.5 million prepayment transactions are made each year.
InvestigationInvestigation
The watchdog decided to research pre-payments after the high-profile collapse of businesses such as Christmas hamper firm Farepak and wedding gift list operator Wrapit.The watchdog decided to research pre-payments after the high-profile collapse of businesses such as Christmas hamper firm Farepak and wedding gift list operator Wrapit.
As with many things during a recession, it is the poorest that will be hit hardest Steve Brooker, Consumer FocusAs with many things during a recession, it is the poorest that will be hit hardest Steve Brooker, Consumer Focus
Newlyweds without their presents were told they would receive little or no refund after Wrapit collapsed in August 2008.Newlyweds without their presents were told they would receive little or no refund after Wrapit collapsed in August 2008.
Consumer Focus said that retailers and suppliers going bust was the main reason for consumers missing out on goods and refunds.Consumer Focus said that retailers and suppliers going bust was the main reason for consumers missing out on goods and refunds.
Top of the list of goods failing to arrive were electrical goods, books, music, clothing, furniture and non-package holidays.Top of the list of goods failing to arrive were electrical goods, books, music, clothing, furniture and non-package holidays.
"Consumers are losing out in the fight to reclaim money from bankrupt businesses," said Steve Brooker of Consumer Focus."Consumers are losing out in the fight to reclaim money from bankrupt businesses," said Steve Brooker of Consumer Focus.
"The problem looks to worsen, given the dramatic rise in companies going under this year. As with many things during a recession, it is the poorest that will be hit hardest.""The problem looks to worsen, given the dramatic rise in companies going under this year. As with many things during a recession, it is the poorest that will be hit hardest."
Card protectionCard protection
Debit cards were used in 45% of pre-payment transactions and Mr Brooker said the protection for these people should be stepped up.Debit cards were used in 45% of pre-payment transactions and Mr Brooker said the protection for these people should be stepped up.
Brides held a protest after losing money when Wrapit collapsedBrides held a protest after losing money when Wrapit collapsed
He called for the law to be changed, so those using debit cards were offered the same chance of compensation as those using a credit card.He called for the law to be changed, so those using debit cards were offered the same chance of compensation as those using a credit card.
People who pay between £100 and £30,000 in advance for goods can make a claim to their credit card provider if the shop or supplier goes bust. Visa also offers some voluntary protection for its debit cards.People who pay between £100 and £30,000 in advance for goods can make a claim to their credit card provider if the shop or supplier goes bust. Visa also offers some voluntary protection for its debit cards.
The watchdog also wants customers to be placed higher on the list of creditors to be refunded after a business folds and the administrators sell its assets.The watchdog also wants customers to be placed higher on the list of creditors to be refunded after a business folds and the administrators sell its assets.
It claimed that they received an average of 3p for every pound spent.It claimed that they received an average of 3p for every pound spent.
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