Why should consumers look out for their suppliers financial stabilityand ability via CheckRate Trustmarks?

Consumer Purchasing Advice:

If a supplier goes bust after taking your money but before supplying your goods or service you can loose everything. This isn't always the case and there are other things you can do to limit the risk, as well as looking for their financial Trustmark and this can change depending on what you are buying and what sector you are dealing with.

If a company for example, a holiday company or a furniture company, goes bust after you have booked a luxury holiday or ordered a new three-piece suite, all might not be lost.

There are precautions you can take to minimise how much you might be out of pocket, and regulations that will protect you if the worst comes to the worst.

If you pay using credit on a credit card:

If you pay using credit, for example, finance arranged by a retailer, or on a credit card, the Consumer Credit Act 1974 gives you protection if a company goes bust.

If you have paid for the goods (even part of them) on credit, you're entitled to a full refund from the credit company.

The Act covers goods worth between £100 and £30,000, but you're completely covered even if you paid as little as £1 deposit with your credit card and the remainder some other way.

The Consumer Credit Act will also afford you protection for any breach of contract that you could have brought against the retailer later down the line, for example if the goods fail.

However, this protection applies only to credit cards, and not to debit cards, such as Maestro and Visa Delta.

What to do if this happens to you:

Contact the company and confirm the ATOL covers the whole booking.

If your holiday company goes bust
There are special rules that mean that, in most cases, you should not be left in the lurch.

Under the Package Travel, Package Holidays and Package Tours Regulations (PTR) 1992, all package holidays must be bonded, so money you have paid is protected.

For example, most flights and package holidays that include a flight should be covered by an Air Travel Organiser's Licence (Atol). This means that ATOL will give your money back, or pay for you to get home, if the holiday company goes bust.

However, there are some types of booking for which you won't have ATOL protection:

If you buy a ticket for a scheduled flight and you receive the ticket straight away, or:
you book a flight direct with the airline, rather than with a travel firm.

Also, if you book from outside the UK, your holiday probably won't be Atol protected. If you are in doubt, ask if what you're buying is Atol protected before you book.

Check websites, brochures and advertisements for the Atol logo.

Travel firms have unique licence numbers, which you can check on the Atol website or by calling 020 7453 6430.

If your insurance or investment company goes bust:

If you're buying insurance, a pension or some other kind of financial product, the company you buy from will be regulated by the Financial Services Authority (FSA).

If a company that is a regulated by the FSA goes bust, or can't pay your claim, you are protected by the Financial Services Compensation Scheme (FSCS) if you have suffered financial loss.

There are different rules and limits on how much you can claim for different types of claim. For more information visit the FSCS website.

Other protection if a company goes bust:

If the company that you've ordered goods or services from goes bust (and you don't have protection in any of the ways above) there's no guarantee you'll get your money back.

If a company goes bankrupt the receivers will be called in to deal with any outstanding debts but it is likely that you will be one of many creditors and the company will probably not have the resources to repay everyone.

If your goods (such as a kitchen or items of furniture) are sitting in a warehouse clearly labelled with your name, then the company is obliged to honour the order and give them to you as, technically, ownership of the goods will have passed to you.

If your order was still being processed when the company went bust, you will have to register your claim with the receivers and wait to see what you get. You might get a proportion of your money back, but you are unlikely to get the whole amount back.

Top Tips:
If you are buying something expensive wherever possible Pay by credit card - it gives you more protection.

When buying flights or holidays check that the company is Atol protected

About CheckRate Financial Trustmarks (and what they mean to consumers)

If you see a website with a CheckRate Trustmark on then this says that the business is established and is contained within our credit reference agency supplier's databases.

We have two types of Seals - a green badge and a blue badge.

The Green badge states the business is classed as "Credit Worthy" by the Credit Reference Agencies we deal with, so should therefore be Financially Stable.

The Blue badge states the business is found within our Databases so is therefore registered or is established enough to be trusted as an operating business.  The blue badge doesn't show any financial stability though so there should still be some caution shown, maybe the use of Credit Cards etc. for additional cover.