I put something on lay-by and have paid a couple of installments but I have changed my mind and want to cancel. Can I get my money back?
I put something on lay-by and now the company has gone out of business. What can I do?
I put something on lay-by and have paid a couple of installments but I have changed my mind and want to cancel. Can I get my money back?
If you cancel a lay-by agreement you may be entitled to a refund of the money you have put down on the item. If so, you are entitled to get the money back in cash. However, the seller may have the right to keep some of your money to cover selling costs or loss of value. Selling costs include things like storage costs and staff time to write receipts. The amount charged must be reasonable, including only the actual costs incurred by the seller for your lay-by. Loss of value means any drop in the retail value of the item because, for example, the item is no longer in season or a newer model is now available. Usually loss of value can't be claimed if the lay-by agreement is cancelled within one month.
If the amount of your installments is less than the selling costs and loss of value, the seller can keep your money but they cannot ask you for any more. The Ministry of Consumer Affairs website provides more information about lay-by purchases and cancellation of lay-by agreements.
Please note: the rules for cancellation and refunds for goods bought on hire purchase are different from those which apply to goods bought on lay-by. Follow this link if you need information regarding cancellation and refunds for hire purchase transactions.
I put something on lay-by and now the company has gone out of business. What can I do?
If a company goes out of business and you have an item still on lay-by with them and your payments are up-to-date, you have the right to pay for and collect your item. If the seller is not able to give you your lay-by item because they do not have enough stock left, then they will owe you money.
You will need to contact the company's receiver or liquidator to register your claim for the item or the money you are owed. Put your claim in writing, providing evidence of what you are owed, for example a receipt. Although as a lay-by customer you have priority over some other creditors (such as unsecured creditors) when a company goes out of business, there is no assurance that you will actually get your lay-by item or your money back.
Contact your nearest Citizens Advice Bureau for further information and assistance.