Fears over unspent House of Fraser gift cards after shoppers were promised replacements when Mike Ashley took over… but STILL haven’t heard anything
- Customers holding gift cards had to send them to the company’s head quarters
- Consumer rights expert has said the situation for customers is ‘atrocious’
- House of Fraser’s new owners have failed to reassure its customers
Sports Direct tycoon Mike Ashley is under fire for leaving thousands of House of Fraser customers in the dark over replacements for gift cards with the chain.
Ashley has been at the centre of controversy since buying out the department store group for a cut price figure of £90 million five weeks ago.
Customers holding gift cards, received as birthday or wedding presents, were told to send them in to the company’s headquarters in order to be issued with a replacement.
Mike Ashley (pictured) has been at the centre of controversy since buying out the department store
However, people who followed the new owner’s instructions have heard nothing back, creating fears that these cards, which collectively will be worth millions of pounds, could effectively be worthless.
The various obstacles that the Ashley-owned business has erected means a large number of customers, including many elderly people, are likely to give up, so reducing the retailer’s liabilities.
Consumer rights expert, Adam French, said: ‘The communication from House of Fraser on gift cards has been atrocious.
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‘It’s now more than a month since customers were told to send their gift cards in for a replacement and all they’ve heard since is silence.
‘This is no way to treat loyal customers. If Mike Ashley is serious about turning House of Fraser into the Harrods of the high street it cannot be done with shoddy customer service.’ One angry customer, Cathy Martin, ended up with a House of Fraser gift card in lieu of a refund last year and had not got round to using it by the time the business went into administration in early August.
‘I took it to the Belfast store just after the announcement was made… and was told the gift cards were no longer being accepted,’ she told the BBC.
Mike Ashley bought the struggling department store chain for £90 million
She sent the card to an address provided by the store, but has heard nothing since.
‘I honestly feel like going and lifting £150 worth of stock and walking out. I mean, it’s the same thing, isn’t it? – except I’d be arrested and House of Fraser gets away with pretty much the same thing.
‘They’ve stolen £150 from me – and thousands of others.’ Shoppers have no legal right to a replacement gift card from Mr Ashley and the new owners because they were bought before the company went into administration. Technically, customers are now among the many people and suppliers who are creditors of the old failed company which does not have the cash to cover its debts.
The administrators EY said: ‘Customers can submit a claim against the HF Stores Realisations Limited (formerly House of Fraser (Stores) Limited). However, this will be treated as an unsecured creditor claim and unfortunately they will only receive a very modest recovery against the amount claimed.’ One other possible route is to claim to a credit card provider, if the gift cards were bought using plastic.
Section 75 of the Consumer Credit Act can make credit card providers jointly liable for breaches of contract with a trader when people buy on a credit card. To have a chance of a claim, gift cards need to be worth more than £100 and bought on a credit card.
House of Fraser’s new owners have failed to respond to requests for a comment or reassurance for customers.
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