Reclaiming losses from undelivered goods


I ordered and paid for curtain material by telephone using my Lloyds debit card. The fabric was never sent in spite of 15 calls to the firm over a seven week period. The firm was internet-based but took orders and payment by telephone. What are the chances of the bank refunding my £427? What other options are there? H.N. Hitchin.

White Goods

Plastic protection: it is always a good idea to buy consumer goods and services on credit

Alan O'Sullivan, savings reporter with This is Money replies: The most important thing to remember here is whether your account was in credit or debit when you paid for the goods.

If it was in an overdraft, then the transaction is covered under the Consumer Credit Act and you receive the same protections as a credit card user. In these cases, the card issuer is equally responsible for faulty goods or goods that do not arrive. You can claim this money back as long as the goods cost between £100 and £30,000.

If your account was in credit or the goods were under this value, you still have a chance of getting your money back.

Both of the main companies governing debt card transactions in the UK, Visa and Maestro, operate 'chargeback' schemes were a customer can request compensation from their bank if a service or product is not delivered. You will have to fulfil certain criteria, such as providing proof that you bought the goods, but the problem is that individual banks have the right to opt out of this chargeback system if they wish.

You will have to check the terms and conditions of your account to see if you are covered. Lloyds TSB happen to have signed up to the scheme, although a spokesman said 'this is not a guarantee we will uphold individual's claims as any claim is based on the particular circumstances of the case'.

If the company has become insolvent, you could sue them for breach of contract, but if they are already insolvent, you have little chance of winning any funds back as you will probably be at the end of a long list of creditors.

The company is obliged to deliver the goods if they are sitting in one of their warehouses with your name on it, but proving this is nigh on impossible.

The chargeback system is much more likely to be successful as the debt is honoured by the company's bank, not the company itself.

If it is a case of fraud and the company never existed, then you should report it to your bank, which should then contact the police. Most fraud cases involve money being stolen from your account however; in these cases it is up to the bank to prove that you have been negligent with your Pin number or card, and they have been increasingly unwilling to refund stolen funds since the advent of chip & Pin technology in 2006.

In this light, your chances of reclaiming money from your bank that you willingly parted with on fraud grounds is pretty slim.

Again, it's time to get on to your bank to discuss your prospects under the chargeback system.

Reclaiming losses from undelivered goods

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