Is this illegal?

Starcity83

I attend a musical weekend event every year and have done for twenty years. The event has been cancelled because of covid but is starting again this year. The event is mid October.

The company that runs the event has gone into administration but has been bought by another company. We had paid the final sum to the original company and the deposit had rolled over from 2020. Myself and my friends received a phone call Saturday morning from the new company saying that we had to use a section 75 to claim back our money from our banks and then repay the new company. We also had to verbally agree that we would pay the new company the amount. 

1) the old company is sending an email out tomorrow to explain more but some people were told on the phone by the new company they would have to pay for the holiday even if they didn’t get a refund. 

2) we are assuming that the holiday will go ahead and we have to pay the new company after as it’s only 3 weeks away hence the verbal agreement on the phone.

3) how can we claim money back for a cancelled event when the event is going ahead. It will be exactly the same but under a different name for the company. Surely this is fraudulent?.

We are all discussing the legal implications of this bit if the event is still going ahead then surely our balances should just be carried over. Also how would we claim for a deposit paid two years ago?. 

RedMonty

This seems a rather complex legal issue. It's certainly above my pay grade. For people not realising, Section 75 is a pathway to claiming credit card refunds.

MSE link: https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

I don't know if I'm allowed to mention other forums here, but another useful place for getting feedback & discussion on legal issues like yours is https://www.reddit.com/r/LegalAdviceUK/ 

Starcity83

This seems a rather complex legal issue. It's certainly above my pay grade. For people not realising, Section 75 is a pathway to claiming credit card refunds.

MSE link: https://www.moneysavingexpert.com/reclaim/section75-protect-your-purchases/

I don't know if I'm allowed to mention other forums here, but another useful place for getting feedback & discussion on legal issues like yours is https://www.reddit.com/r/LegalAdviceUK/ 

I’ll check there thanks 

CKhalvashi

I'll answer in detail on Wednesday, however this aspect should have been dealt with as part of the administration.

From experience, something seems off here, but that's not to say this hasn't already been agreed.

eskbanker

Starcity83 said:

We are all discussing the legal implications of this bit if the event is still going ahead then surely our balances should just be carried over. Also how would we claim for a deposit paid two years ago?. 

I'd suggest naming the event and the companies, in case anyone is familiar with exactly which rights and obligations have been carried over from old to new.

The (ab)use of section 75 does sound suspicious, but in the event that a s75 claim did need to be made, doing so for payments two years ago wouldn't be an issue....

Grumpy_chap

Starcity83 said:

The company that runs the event has gone into administration but has been bought by another company. 

A key factor here will be what company B acquired when they "bought" company A that went into administration. 

At the one end, if company B acquired the whole of company B, that would mean liabilities also transferred, so company B would need to honour the previous commitments.

At the other end, company B may not have bought any of company A, but may have just signed the deal with the venue to run the event now that company A cannot.  That would mean nothing transferred from company A.

There are a whole host of middle-ground possibilities between those two ends.

sourcrates

Grumpy_chap kind of sums things up nicely above.

If the original company went bust, then normally all assets would be sold to pay creditors, you are now a creditor of that company, and if the assets are insufficient to refund everyone and pay its debts, which is the most likely scenario here, then you have lost your money basically.

If you paid via credit card, then you may be able to re-claim the money using sec 75, via your bank.

It sounds to me like all liabilities were relinquished and not transferred to the new company, but obviously you should get conformation of this, preferably before you part with any more hard-earned cash.

TadleyBaggie

HRH by any chance?

[Deleted User]

One caveat I'd say with the Reddit legal advice sub is that the mods can be very funny, anecdotally I have heard of being having comments deleted or even being banned for posting correct advice, even lawyers correcting false information being removed. I would always double check everything they say as advice just in case

As above though, doing an S75 on the company might be possible depending on the ticket price and terms but it is a bit dodgy to try and take the money off the bank, which might take many many months, and then pay it back to what could well be a phoenix company

born_again

Starcity83 said:

I attend a musical weekend event every year and have done for twenty years. The event has been cancelled because of covid but is starting again this year. The event is mid October.

The company that runs the event has gone into administration but has been bought by another company. We had paid the final sum to the original company and the deposit had rolled over from 2020. Myself and my friends received a phone call Saturday morning from the new company saying that we had to use a section 75 to claim back our money from our banks and then repay the new company. We also had to verbally agree that we would pay the new company the amount. 

1) the old company is sending an email out tomorrow to explain more but some people were told on the phone by the new company they would have to pay for the holiday even if they didn’t get a refund. 

2) we are assuming that the holiday will go ahead and we have to pay the new company after as it’s only 3 weeks away hence the verbal agreement on the phone.

3) how can we claim money back for a cancelled event when the event is going ahead. It will be exactly the same but under a different name for the company. Surely this is fraudulent?.

We are all discussing the legal implications of this bit if the event is still going ahead then surely our balances should just be carried over. Also how would we claim for a deposit paid two years ago?. 

When was this amount paid?
When did they go into administration?
Did you pay the company direct or via a booking site, that may break the debtor/creditor link?

Seems odd that the "New" company would call people if they had not taken over the companies liabilities. Or how else would they know your details?

DullGreyGuy

Deleted_User said:

As above though, doing an S75 on the company might be possible depending on the ticket price and terms but it is a bit dodgy to try and take the money off the bank, which might take many many months, and then pay it back to what could well be a phoenix company

The buying company is making money from their customers. The customer's of the old company are being protected by their credit providers. Those offering credit facilities are aware of their S75 obligations when creating products and price it into the model. 

Clearly phoenix companies do exist but there is no evidence in that this is the case here and there are specific laws and actions to prevent them.

born_again said:
Seems odd that the "New" company would call people if they had not taken over the companies liabilities. Or how else would they know your details?

Customer lists are a valuable asset if they have the appropriate marketing permissions to enable them to be sold. Certainly worth an outbound call if someone has attended every year for two decades to tell them its back on via a new company if they want to continue attending.