Simply Home Cinema closes its doors - customers urged to come forward
Issue Date: - Tuesday, 9 June 2009
Two stores of Simply Home Cinema in Osborne Park and Cannington have closed their doors and Consumer Protection is asking customers who have paid deposits to come forward.
“We have already had several concerned customers, who have made substantial payments to the store, contact us,” said Commissioner for Consumer Protection Anne Driscoll.
“The company has gone into liquidation and we would like to hear from anyone who has paid a deposit to the company but has yet to receive any goods. They should call our Advice Line 1300 30 40 54 where we have details from the liquidator of a creditors’ meeting.”
The Mandurah store, which is operated by a different company, is not affected by the closure.
With the global economic recession starting to bite, Western Australia is not immune and a growing number of consumers are being caught out when retailers face financial trouble.
There has been an increase in reports of businesses that have either gone into liquidation, receivership or administration, threatening the purchases of many consumers.
“The problem of business insolvency is not new but we have certainly seen some recent examples that warrant consumers being warned to take some basic precautions.” Ms Driscoll said.
“There are some practical measures consumers can take to protect themselves and minimise the risks involved, mainly caused by paying too much money up front.”
The simple advice from Consumer Protection is to never pay the full amount until the product is either picked up or to be delivered or the service is completed to your total satisfaction. Actively question why businesses are asking for significant deposits and consider paying only the minimum deposit required to secure the sale.
“If the retailer or manufacturer offers to store the product until you are ready to take delivery, arrange to store it yourself. This was the main problem faced by Kleenmaid customers who took up an offer from the company to store their goods until their homes were built,” Ms Driscoll said.
“If significant deposits of 30-50% are being demanded by the business, weigh up the position you will be in if the business fails to deliver. Million dollar showrooms do not guarantee the business is any stronger than the store next door which is not demanding such high deposits.”
“If consumers have paid for goods using credit cards or finance arrangements, there are some protections available under the consumer credit code, but these are a poor substitute in the event of a business failure.”
“My strong advice is to protect yourself first by doing your homework and not paying for goods upfront. Consumers are often too trusting and will gladly pay the full purchase price.”
“This is not good business practice and consumers should adopt the approach – pay for goods on delivery”.
Consumers who are having problems with a retailer or service provider who fail to deliver, can lodge a complaint with Consumer Protection on our Advice Line 1300 40 50 54 and we will investigate and, if necessary, mediate on their behalf.
Businesses which are facing financial difficulty or insolvency can get information from the Australian Securities and Investments Commission website: www.asic.gov.au/insolvency
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