Use this guide when a business you paid has stopped trading, gone into administration or liquidation, or has simply disappeared. Have your receipts, bank or card statements, contract or order confirmation and any correspondence ready.
Step by step
Confirm what has happened to the business
Check the company's status on Companies House, which shows if it is in administration or liquidation and who the appointed insolvency practitioner is. Notices are also published in The Gazette. For a sole trader, look for news of bankruptcy or contact Citizens Advice for help working out the position.
Check how you paid
If you paid at least partly by credit card for an item costing more than £100 and up to £30,000, you may be able to claim from your card provider under section 75. For debit card and smaller credit card payments, ask your bank about chargeback as soon as possible, as time limits apply. If you paid by bank transfer or cash, your options are more limited.
Claim from your card provider
Contact your card provider in writing, explain that the trader has failed to supply what you paid for and include your evidence. Ask for a section 75 claim or a chargeback as appropriate. If the provider rejects a claim you believe is valid, you can complain to it and then to the Financial Ombudsman Service.
Check any other protection
Look at whether a deposit or payment was protected by an insurance-backed guarantee, a trade association scheme or, for holidays, a travel protection scheme such as ATOL. Your contract or receipt may mention it. Contact the scheme directly with your evidence.
Register as a creditor
If you have no other protection, contact the administrator or liquidator and register as an unsecured creditor with details of what you are owed. Customers are usually low in the order of repayment, so you may get little or nothing back. Keep a copy of your claim and any reference number.
Handle gift cards, orders and goods held
Ask the administrator whether gift cards, vouchers and outstanding orders will be honoured, and use gift cards quickly if they are. If goods you paid for were already set aside and clearly identified as yours, ask whether they can be released. Keep all replies in writing.
Ready-to-use checklist
- Company status checked on Companies House
- Name of the insolvency practitioner
- Proof of payment and method used
- Contract, order or receipt
- Section 75 or chargeback request sent
- Any guarantee or protection scheme checked
- Creditor claim submitted if needed
- Copies of all correspondence
Practical tips
- Pay deposits by credit card where you can, because it may give you section 75 protection if the business fails.
- Be wary of anyone contacting you offering to recover lost money for a fee, as this is a common scam.
- Keep an eye on emails from the administrator, as they may set deadlines for creditor claims.
Common problems
My card provider says I am too late for chargeback.
Chargeback time limits are set by card schemes, so late claims may be refused. If you paid by credit card for an item over £100, a section 75 claim may still be possible, as it has different rules.
The builder took a deposit and disappeared but the company still exists.
If the company is still registered, the problem may be a breach of contract rather than insolvency. Send a letter before claim, ask your card provider about section 75 or chargeback and consider a small claim.
The administrator says my gift card is worthless.
Administrators can decide not to honour gift cards. You can register as an unsecured creditor for the value, and if you bought the card with a credit card, ask your card provider whether any protection applies.