BURT CALLS ON GOVERNMENT TO ACT NOW TO PROTECT CONSUMER PAYMENTS

9.20.22am BST (GMT +0100) Mon 10th Aug 2009

Solihull's MP, Lorely Burt has today called on the Government to act quickly and decisively to protect payments being made in advance for goods and services by her constituents following the publication of research which suggests that 1 in 50 have already lost an average of £242 each.

A recent report by consumer champion, Consumer Focus, highlights the scope and scale of consumer prepayment loss as well as identifying some of the sectors where consumers' money is more at risk. These sectors include everyday purchases like electrical goods, computers and domestic appliances; books, music or other small personal entertainment items; furniture; and booking a flight, hotel or holiday.

Lorely has written to the Government to urge them to conduct and conclude their promised reassessment of the relevant laws and rules now and to bring forward new laws to help protect consumers who pay in advance for goods and services.

Speaking today, Lorely said:

'When the Christmas Hamper company Farepak collapsed almost 3 years ago, the Government promised action.'

'Consumer Focus has identified the size and effect of the problem that businesses going bust brings to my constituents who pay in advance for their goods and services. They've also identified solutions to this problem.'

'I now want Government to act quickly by bringing forward new laws to protect my constituents and give them confidence that they'll get their money back if the company they're buying from goes bust.'

'I want constituents to be aware of what they can do to help better protect themselves and hope they'll think about the top tips from Consumer Focus when paying in advance for goods and services.'

Top Tips when making prepayments - from Consumer Focus

1. Use a credit card, if you have one, to pay in advance for goods and services costing between £100 and £30,000 - you'll be able to make a claim from your credit card company if the company you paid goes bust. This protection doesn't apply if you use credit card cheques or pay with cash you've withdrawn from your credit card account. Find out whether your debit card provider offers some form of protection for your money too.

2. Before you buy ask the company whether there is a legally required protection scheme or a voluntary scheme in place which will protect your payment if something goes wrong. If there is a scheme in operation find out about the level of protection offered by it

3. Beware of paying in advance for goods and services not covered by a legally required or voluntary scheme - you may lose your money if the company goes bust.