Matthew Mason-Cox med rel: Consumers urged not to pay large deposits

NSW Fair Trading Minister Matthew Mason-Cox today warned consumers about the perils of paying large sums of money before receiving goods or services, after a person paid a $2,800 deposit for blinds that were never installed.

Last month, a consumer contacted NSW Fair Trading after putting down a large deposit for the supply and installation of blinds. The blinds were never installed and a refund was not forthcoming until NSW Fair Trading intervened.

“Each year, the Department receives many complaints from consumers about products and services not being provided,’’ Mr Mason-Cox said.

“More than 400 complaints were lodged with NSW Fair Trading last year about deposits where goods had not been supplied, with the most common type of complaint relating to the sale of furniture, clothing, hardware and building supplies.

“These figures are a timely reminder of the risks when paying large deposits.

“Paying a large deposit is fraught with danger. ‘’If a trader goes into receivership or liquidation after a deposit has been paid, the consumer becomes an unsecured creditor with often little chance of recovering their money once the business has closed its doors.

“Where possible, consumers should avoid paying any more than 10 per cent of the total cost.’’

Mr Mason-Cox said some traders may have a valid reason for requesting large deposits or upfront payments. “For example, when supplies are required to be pre-purchased,’’ Mr Mason-Cox said.

“If you are required to pay large deposits before delivery or completion, consider using a credit card rather than cash, as it may be possible to claim a chargeback if the goods are not delivered or the services not performed. “Always make sure you receive your proof of purchase.

“The Australian Consumer Law is clear – businesses and traders are required to deliver goods or complete services in accordance with the completion date set out in the initial contract or within a reasonable timeframe. “Traders who sign contracts and accept deposits knowing they would not be able to supply the goods in a timely manner are acting unlawfully.’’

Consumers who are experiencing problems obtaining goods or services after they have been partially or fully paid should contact NSW Fair Trading on 13 32 20.