Ohio Consumer Law Blog
Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
What to Do when a Business Shuts Down
Many of us have bought goods, season passes, or services from a business that then closes its doors. It is the nature of the current economy, but there are steps you can take to protect your pocketbook. Unfortunately, because these companies tend to go through bankruptcy proceedings, there is little left for you as a consumer at the end of the day. These steps will help protect yourself before, during, and after the business closes its doors:
1. Dispute credit card charges. Buying a season pass or item on your credit card gives you the added protection to dispute the purchase with your bank. Their is a number to call on the back of your credit card for your customer service representative. Tell them what happened and ask them to reverse the transaction. Make sure you follow the rules included on the back of your monthly credit card bill. Under the federal Fair Credit Billing Act, you are only liable for $50 of unauthorized charges. You must dispute the charges in writing within 60 days after the first bill containing the error was mailed. If you paid with a debit card or if too much time has passed, your card issuer is not required to offer these protections, but you should try to dispute the charges anyway. My family and I were forced to do this before with a former Toledo area furniture store, and it worked. If you need help in this process, contact me.
2. Contact the business’s headquarters. Many times the local branch managers don’t have the authority, or even the information, necessary to handle your issue. When I was involved in a dispute with a former Cleveland jeweler about a lifetime service plan, I couldn’t get anywhere with the local managers. I had to call the corporate officers at the headquarters, and sue them in order to receive what I was due. If just one branch of a larger company shuts down, try to contact the corporate headquarters or another branch that is still in operation. Sometimes businesses will not take your complaint seriously until they get it, in writing, on a lawyer’s letterhead. I had this experience with a cable company in the Cleveland area. See Pointer #5.
3. Keep all of your documents. Make sure you save your receipts, agreements, contracts, and any other documents you received from the business about your purchase. Keep copies of all letters and emails you send to the business, and write down in a journal the phone calls you have made, when you made them, who you spoke with, and what they said. If you have to later sue the company or if the company files for bankruptcy, these documents may give you a better chance of receiving money you are owed.
4. File a “proof of claim” with the bankruptcy court. If the company files for bankruptcy, you will need to file a proof of claim with the bankruptcy court or you may forever lose your right to payment. This does not guarantee that you will receive your money back, but it does get you in line for whatever money is available to cover your claim. A proof of claim tells the court that money may be due to you. It also helps to ensure that you will receive important updates about the bankruptcy.
5. Contact an attorney to determine what to do. If you can’t get anywhere with the company, don’t keep banging your head against the wall. The definition of insanity is doing the same thing over and over again and expecting a different result. Many times retaining an attorney can allow you to resolve the matter on better terms, and even more speedily. This is not always the case, every situation is different, but you should seriously considered contacting an attorney to help you in resolving your claim, especially if you are getting nowhere with the business. There may be more issues facing you than you know–an attorney should help you understand and resolve them.
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Daniel Myers
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Ohio Consumer Law Blog 