Business in liquidation |
In today's economic climate, and despite the best efforts of traders, sometimes companies are placed into liquidation or receivership. The Office of Fair Trading does not have the legislative power to obtain money back from traders for consumers if an organisation closes under these circumstances.
If a business you have been dealing with has gone into receivership, bankruptcy or has closed its doors for trading, there are several things you should do immediately:
- if you have a direct debit arrangement, contact your bank and have this cancelled immediately
- if you have made a payment or payments by credit card, cheque, or a future date direct debit arrangement, contact your bank and discuss the situation to see if they can assist you in any way. They will not be able to assist you if you have paid cash
- if you have paid by money order, contact Australia Post to see if they can assist you
- check to see if a receiver has been appointed:
- if the organisation is registered as a company, the Australian Securities and Investment Commission may be able to advise you if a receiver or an administrator is appointed to the company. If one has been appointed you should contact them to make enquiries about registering as a creditor
- the Insolvency and Trustee Service Australia may be able to advise you if personal bankruptcy has been declared by the proprietor(s) of a business name and what to do to register as a creditor.
We can investigate if you believe there has been a potential breach of the legislation. If a breach is found, then we can prosecute. Fair trading investigations relating to business closures usually centre on whether or not the business accepted payment when they knew they were unable to fulfil what was promised. For example, when a fitness centre knows they will close tomorrow but accept payment for a yearly membership today regardless.
In order for us to investigate a matter like this for you, you will need to submit a written complaint.
Bankruptcy of traders in certain industries
In some industries, the licence and registration fees paid by licensees are directed to funds to assist consumers who suffer financial loss as a result of certain things that one of their members does or does not do.
Each of these industries operates differently and the criteria for making valid claims for compensation differ for each. If a business you were dealing with has gone bankrupt, you should check to see if it is a member of an industry or professional group that offers this type of protection.
Major compensation funds exist for:
- travel agents - if a licensed travel agent has become insolvent or is unable to account for monies received for the purchase of travel or travel related arrangements, consumers may be able to lodge a claim with the Travel Compensation Fund. The fund does not cover travel booked directly with an airline or accommodation booked separately to travel
- real estate agents - if a real estate agent is unable to account for monies received on your behalf, you may be able to make a claim against the Property Agents and Motor Dealers Claim Fund
- motor dealers - if a motor dealer is unable to account for monies received on your behalf, you may be able to make a claim against the Property Agents and Motor Dealers Claim Fund
- solicitors - the Legal Practitioners' Fidelity Guarantee Fund is administered by the Queensland Law Society
- builders - the Queensland Building Services Authority licenses builders in Queensland and may be able to assist you if you encounter difficulties in your dealings with a builder.
We recommend that you seek independent legal advice to find out your options for recovering any money you believe you are owed. You should also see if you are able to have the matter dealt with by the Queensland Civil and Administrative Tribunal.
Related links |
Last reviewed 30/11/2011 |
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