Insolvency of Opticians

Recently, we have seen a rise in enquiries relating to the insolvency of opticians. In order to best assist such enquiries, and due to the multitude of factors involved, we have created a useful guide that may be useful for those who are in a position where their optician has gone into insolvency.

My optician has ceased trading – where do I stand?

If the practice has stopped trading, you need to establish whether the practice was operated as a limited company, as an individual (sole trader) or partnership. The official government website provides useful guidance on this.

Is the practice a limited company?

A company may set up a procedure or pathway to deal with this situation. This information may be displayed on their website or in the premises.
If no process is in place, the next steps will depend on how you paid:

Credit Card
If your purchase cost £100 or more, and you paid all, or even just the deposit, by credit card, your credit card company is equally as liable (as the retailer) under Section 75 of the Consumer Credit Act.
Money Saving Expert offers some useful assistance on contacting your credit card company.

Cash, Debit Card or Cheque
If you paid using cash, debit card or cheque, you will need to register with the Insolvency Practitioner appointment. Usually they will be called ‘administrators’.

The company should publish the name and contact details of the administration – check their website, premises or Companies House.

You should contact them providing details of the order and payment made. The administrators will then add your name to the list of unsecured creditors.

If the company is sold as a going concern, the orders may be honoured or a refund given as the buyer takes on those orders. If the company has any assets and these can be sold, the administrator will pay any debts in the following order:

• Secured creditors, e.g. bank with a charge over any property
• The administrator’s fee
• Employees’ redundancy pay and wages
• Everyone else

Is the practice run by an individual as a sole trader or partnership?

If the individual has ceased trading, you will need to claim the payment from them as an individual. You can take civil legal action against them for their the amount paid or for the delivery of the product. Whether you recover any money will depend on whether the individual has the means to pay. Do they have money available; do they have any assets? For advice on the court process, visit the Citizens Advice website.

If they have been made bankrupt or entered into an Individual Voluntary Arrangement (or relevant process in Scotland and Northern Ireland), then you will need to contact the trustee in bankruptcy.

You can check this at the official government website. You would then need to contact the insolvency practitioner to register your debt.

Will I get my money back or the product I ordered?

It is unlikely you will get the product, even if you know it has been delivered to the practice but not collected. If the business is sold as a going concern, you may do so.

Whether you can recover the money paid will depend on how you paid (i.e. credit card or other means). If you cannot recover the money from a credit card company, at best you may recover a percentage of your money, but this is often a few pence for each pound owed.

What if my specs are faulty and the practice has ceased trading?

Your rights remain under the Consumer Rights Act 2015, however:

• A repair may not be possible if the practice is no longer trading and cannot undertake the repair
• If you purchased on a credit card, you have the same rights against the credit card company as the practice, so you can contact the credit card company and rely on S75 Consumer Credit Act to claim a refund
• If you purchased by debit card, cheque or cash, you will need to register with the administrator (see above.

Remember, you are entitled to a refund if the product is not:

• Satisfactory quality
• As described
• Fit for purpose – as a bespoke product manufactured for you, this is not a straightforward question. Therefore, if you feel your spectacles or other optical product is not fit for purpose, discuss this with the practice or contact the OCCS for advice.

You are also entitled to expect the product to last a reasonable length of time.