Small business - refuses refund

NotaBotorRobot

Hi,

I paid a £500 "deposit" to a small business to get on their waiting to have some work done in Sept 2023.

The small business had various issues such as being "kicked out" of their tenancy and having to find new premises, plus issues with the building causing him to down tools for periods of time. As he works alone this pushed all of his work waiting backwards. 

As a result, the works I needed to have carried out didn't ever happen, I chased a few times and got the above stories, and offered supportive comments as these stories were genuine and posted on his business social media platform. 

We're now in Jan 2025 and I asked for a refund of my £500 payment as it's been a long time and I no longer need the work done (it was for car restoration, car has now been sold on).

There was no written contract but I have a text message confirming receipt from the owner and I have the amount on my bank statement in the name of the owner of the business.

I have read online regarding deposits not being refundable if I change the rules, i.e. I have now sold the car, so perhaps I do fall into that category. However, what would be considered reasonable from point of deposit payment to having work done in order to generate a refund? The business will not refund me at my request so if I am to pursue it would have to be through the small claims court and I am wondering whether it is worth it or whether to just chalk it up to experience. It will cost £50 to log the claim.

 

Okell

I'd send a Letter Before Action (aka Letter Before Claim - Google what they are) and if he doesn't refund I'd sue him.

You're risking another £50 to regain £500.

He might have no assets to pay you with, but I'd have thought it was worth the gamble

(I assume you have a paper - or email - trail showing that you chased him to get the work done and it's over a year late.?)

born_again

Is this a company or a individual. Can we take it that you have his name, address etc

Alderbank

First of all, do you make any money buying and selling vintage and collectable vehicles or is this just a hobby and quite separate from your main source of income?

Also, it's not clear to me whether you just set up an arrangement to get some work done or whether the contract was specifically to 'have some work done in Sept 2023'.

If the former, you broke the contract when you told him you no longer wanted the work done. If the latter, he broke the contract when September 2023 came and went without him completing the work.

If this is a consumer contract then at most he is only entitled to retain his genuine costs. For example he might have had custom parts made for your car or have spent time searching breakers yards for parts he now doesn't need, but beyond those he should refund your money.

In your position I would ask for a full refund and wait for him to submit his counterclaim of his evidenced costs. But as @Okell says it is only worth suing him if you are sure he has the money to pay.

NotaBotorRobot

Thanks all. It is a registered business, and to me it was a hobby owning and looking after classic cars but life moves on and I've moved on from the hobby and sold up. Young family etc meant priorites have changed.

When I paid the deposit it was a 3-6 month wait. Looking back at my records it was actually Sept 2022 I paid, not 2023. I chased approx 3 times since booking.

He is "in business" and is very good at what he does, but works alone and can't get through the work. Over the years I have had a few wellbeing type chats with him as things haven't his way with his landlord etc. 

So, as for next steps it would best to send him a letter as last resort and then sue him?

As for work done to date it absolutely nothing. No parts, the work was fabrication which requires car in hand to perform.

Alderbank

Thanks for your reply.

Just to clarify, you said:

We're now in Jan 2025 and I asked for a refund of my £500 payment...The business will not refund me at my request...

• When did you last ask him? Was it Jan 25 or an earlier date?

• Has the business said they refuse or has it just ignored your request?

Okell

NotaBotorRobot said:

Thanks all. It is a registered business, and to me it was a hobby owning and looking after classic cars but life moves on and I've moved on from the hobby and sold up. Young family etc meant priorites have changed...

Sorry but I don't understand.

When you refer to "it is a registered business" in the present tense, are you talking about yourself now?

Or did you mean "it was a registered business" but you've since sold it?

When you paid the deposit, was that as a consumer or was it as part of your business?

(It having been a "hobby" wouldn't prevent it being a business if you were trading in some way)

NotaBotorRobot

I am just a regular person buying a service from a business. I am not a business, I'm a paye full time employed in a completely different industry. The person I paid a deposit to is a business but doesn't show "ltd" after their name, I would assume looking at his website and failing to find him on companies house, he is a sole trader/self employed person.

I have never asked for a refund prior to Jan 2025, he doesn't ignore me, just replied to say he doesn't do refunds. Previous comms has simply been to remind him I am waiting and he replies something along the lines of being sorry, times have been tough, I will get to you etc etc. But now we're a long way down the road I no longer need his services, I would have done if it was within the 3-6 month original estimate and had waited beyond that but decided in Jan 2025 (deposit paid Sept 2022) that I'm done with this hobby of mine and sold my final car up, I did have a few cars at one point. None of it was a business for me, just a hobby

Okell

In that case I'd be inclined to go with my original suggestion.

Letter Before Action/Claim and if he doesn't cough up issue a money claim.

As I said previously, if he doesn't have any assets or simply doesn't have the money then you might not get anything back even if you win.

But if it's a question of either writing off £500 or risking losing another £50, I think I'd risk losing another £50.

Remember, if it gets to court you can win or lose, and even if you win but the defendant has no money, you might not get a payout.


(Just one point for clarity - you stress that this activity was a hobby for you and not a business.  So you never did restoration work for others and get paid for it?)

NotaBotorRobot

Thanks, I'll have a think on it. I only did work for myself, if the wind blew in the right direction I might have broken even when I sold everything up but likely forgetting costs. It was an expensive hobby, fine if I was doing work for myself but the moment I relied on any external business i.e. a paint job etc it was always a disappointing experience.

Alderbank

Yes, as above, send him a formally worded Letter Before Action and follow through. No more Mr. nice guy.

When he gets the LBA, and certainly when he gets court papers, he will scuttle to his solicitor. His solicitor will point out that he has just kept your money for years and done nothing in return and will say 'Just pay the guy'. He'll then charge his client £100 for the advice.

It's true that we have seen issues here where posters have tried unsuccessfully to claim thousands from small builders without success even when they won at court, because the trader or the limited company simply didn't have the money.

I think your case is different. He is a sole trader so a CCJ will be against him personally and have serious effects if he tries to get a mortgage, credit of any kind, rent property, etc. He is good at what he does and has more work than he can handle so he can afford to pay you back.