Buying goods from online companies that are categorised as dormant

HUMBUG

Hi All
I've just part exchanged my golf clubs (the exchange hasn't happened yet but I've paid by bank transfer for the difference direct into the companies bank account). Trustpilot seems to have about 450+ reviews and gives them 5 stars and I checked to see how old and trusted this website was via 'Scamadvisor'. They seemed okay and I also checked companies house (company is still active) but didn't notice that the company was also classified as 'DORMANT'. Aren't dormant companies not allowed to buy and sell goods or receive any income? If so, why have Trustpilot allowed these 450+ reviews to still exist on their website? Now I'm a bit anxious that I may have lost my money to a dodgy company. I suspect they could have the monies transferred immediately to another bank account in another company name (and therefore avoid any interest payments associated with their dormant company name) and also have that same company paying their employees (in which case they could still retain their 'dormant' classification). After seeing so many people anxious about their money being lost to companies that suddenly go into liquidation , its about time the consumers are given more information about the status of a company in terms of risk (rather than us having to pay for risk/credit reports every time we conduct a service transaction).

wealdroam

HUMBUG wrote: »

Hi All
I've just part exchanged my golf clubs (the exchange hasn't happened yet but I've paid by bank transfer for the difference direct into the companies bank account). Trustpilot seems to have about 450+ reviews and gives them 5 stars and I checked to see how old and trusted this website was via 'Scamadvisor'. They seemed okay and I also checked companies house (company is still active) but didn't notice that the company was also classified as 'DORMANT'. Aren't dormant companies not allowed to buy and sell goods or receive any income? If so, why have Trustpilot allowed these 450+ reviews to still exist on their website? Now I'm a bit anxious that I may have lost my money to a dodgy company. I suspect they could have the monies transferred immediately to another bank account in another company name (and therefore avoid any interest payments associated with their dormant company name) and also have that same company paying their employees (in which case they could still retain their 'dormant' classification). After seeing so many people anxious about their money being lost to companies that suddenly go into liquidation , its about time the consumers are given more information about the status of a company in terms of risk (rather than us having to pay for risk/credit reports every time we conduct a service transaction).

In my opinion, it is for the potential customer to perform suitable checks before deciding to trade with anyone.

Why do you think we should all share the cost of working out whether your golf club company is a suitable trading partner for you?

It is particularly important that potential customers should do all they can to protect themselves when being asked to pay by bank transfer.

What checks did you do when asked to pay by bank transfer?

soolin

A company wanting a bank transfer- that seems odd to start with. Most companies offer some form of secure payment via card, or third party site like Worldpay or paypal, not offering that as an option suggests they may be stretched financially and not be eligible to have a merchant account - which is a huge concern.

I agree with wealdroam, consumers need to take some responsibility for their own money, as has been in the press recently online reviews are easily faked and are not the most obvious way of deciding whether a company is good or not.

I would also suggest that buyers need to be mindful of payment methods and have a plan B, simply saying to yourself 'how can I recover my money if this goes wrong' can save a buyer a lot of grief. That's why I am so concerned that a bank transfer has been used, there is no plan B possible at all, you have sent your money voluntarily to a third party through private transfer and it cannot be recalled. Hardly sounds like a proper business type transaction at all, are you absolutely sure for instance that the business is in fact the one that is currently taking the money- and not just someone using the name to piggy back on a previously good company name?

sheramber

After seeing so many people anxious about their money being lost to companies that suddenly go into liquidation , its about time the consumers are given more information about the status of a company in terms of risk (rather than us having to pay for risk/credit reports every time we conduct a service transaction).

Who would you suggest should check out every company and prepare a report?

Who should pay for it?

Where would this report be found?

How often should the company be checked as circumstances can change very quickly?

peachyprice

If the fact that they wanted to be paid by bank transfer didn't ring alarm bells for you and you still went ahead and gave them your money I don't think any published report would have helped you.

HUMBUG

They did provide a PAYPAL account but I do not have one, so that was futile. The problem is you can buy the clubs safely online but only at the sale price , not the revised one (ie. the discounted amount for buying my clubs).The person I was dealing with emailed me in response to my email to the company's 'sales' email address (he happens to be the director of the company). They were willing to accept a cheque so I think this is not a bogus defrauder. My question was about dormant categorised companies and if they should be allowed to trade online and why Trustpilot would allow this company to register with them. But I suspect even if a company was active and not dormant, then you could buy goods one day and they could go bust the next. Look at what happened to Mentmore Golf & Country Club. People paid in advance (some up to 5 years subscription - many thousands of pounds) but now they've gone into liquidation and those people have lost a lot of money.

HUMBUG

wealdroam wrote: »

In my opinion, it is for the potential customer to perform suitable checks before deciding to trade with anyone.

Why do you think we should all share the cost of working out whether your golf club company is a suitable trading partner for you?

It is particularly important that potential customers should do all they can to protect themselves when being asked to pay by bank transfer.

What checks did you do when asked to pay by bank transfer?

Basic 'company house' checks are free but it wouldn't take much to publish a credit risk score too. It would protect many consumers, especially poorer ones (and OAPs) who cannot afford to pay for credit reports. As for checks about bank transfer , what checks do you suggest?

HUMBUG

peachyprice wrote: »

If the fact that they wanted to be paid by bank transfer didn't ring alarm bells for you and you still went ahead and gave them your money I don't think any published report would have helped you.

I didn't say that they wanted to be paid by bank transfer . I was the one that offered to pay so that I could secure the clubs before someone else bought them. My worry is about companies who are flagged as Dormant but still trading online. Is this legally okay for a company to do this ?

HUMBUG

sheramber wrote: »

After seeing so many people anxious about their money being lost to companies that suddenly go into liquidation , its about time the consumers are given more information about the status of a company in terms of risk (rather than us having to pay for risk/credit reports every time we conduct a service transaction).

Who would you suggest should check out every company and prepare a report?

Who should pay for it?

Where would this report be found?

How often should the company be checked as circumstances can change very quickly?

The government should insist that a credit score be available to the public . As I've mentioned before, you can check companies house for basic checks for free but you have to pay for a credit/risk report .

unholyangel

HUMBUG wrote: »

They did provide a PAYPAL account but I do not have one, so that was futile. The problem is you can buy the clubs safely online but only at the sale price , not the revised one (ie. the discounted amount for buying my clubs).The person I was dealing with emailed me in response to my email to the company's 'sales' email address (he happens to be the director of the company). They were willing to accept a cheque so I think this is not a bogus defrauder. My question was about dormant categorised companies and if they should be allowed to trade online and why Trustpilot would allow this company to register with them.

Paying by cheque or bank transfer is the same as paying by cash. If anything goes wrong and the company refuse to fix it/listen, theres little you can do except pay to start court proceedings.

Paypal isnt miles better - given the time limit on claims but at least if there are any immediate problems, you have that extra protection.

With debit cards you have chargeback. And with credit card purchases, you have section 75 protection (from the consumer credit act for purchases of more than £100). Paying by card via paypal might remove those rights though (chargeback and section 75).


As for being dormant...is it definitely the same company? Sometimes a company trades under a name that was previously the name of a limited company for example.

Theres also the possibility that they've only just started to trade again and the possibility they've lied.

What you can do is report to companies house, HMRC & trading standards that the company is trading while claiming dormancy.

None of this is guaranteed to your money back btw. Short of the company willingly giving a refund or court action, theres not a lot you can do - and even court action won't guarantee your money back depending on their assets v liabilities.

unholyangel

HUMBUG wrote: »

The government should insist that a credit score be available to the public . As I've mentioned before, you can check companies house for basic checks for free but you have to pay for a credit/risk report .

Would never happen. For one, a lot of government have an interest or connections with those in business. Second, it may stop consumers purchasing from a company that could have otherwise been saved (and also the jobs of those who work there). Third, a quarter of our retail sales goes to one retailer - who are based in luxembourg (amazon) so are not subject to UK law, how would you force foreign companies like amazon to comply?

And lastly, consumers don't even do the basic checks that are available at present. They order from .co.uk websites thinking the .uk means its a UK company - even where no address, phone number, company registration number or vat number is given. Often the websites specifically tell them the business is located elsewhere yet consumers still miss it. They wait until they've actually sent an order before searching for reviews of the company.


A credit report wouldnt necessarily be useful. A one man band for example might have equal liabilities and assets - but given a company only files their accounts once a year and relies on the books being accurate......its not really anything steadfast to go on. I've seen companies with dodgy books but they arent actually picked up until they're audited.