Banks must attempt to issue charge-backs for HMV vouchers says Financial Ombudsman

With three major high street names going into administration this month, it's been a hellish start to 2013 for the retail sector and bad news for the retailers' customers.

Customers of HMV are currently unable to use gift vouchers; many of which they got as Christmas presents. The administrator Deloitte is having talks with record labels to see if a solution can be found but at the moment HMV customers have, at face value, worthless bits of paper. But don't burn them yet as there is hope

Customers of Jessops and HMV also face future problems getting redress for faulty goods. We take a look at what protection the consumer has in these situations.

Read more: Consumer rights | Entertaiment news

Gift vouchers

These are a debt owed to you by the retailer. But if you can't use them and have therefore not received the goods or services you are entitled to, have you lost your money?

No, you should theoretically be able to get your money back if you paid by debit or credit card. The first step is to ask your bank for a chargeback. This means that the customer's bank must attempt to reclaim the money from the retailer's bank.

If this is not possible, for example the retailer is in administration as HMV is or liquidation then the bank must refer the debt on to Visa or MasterCard; depending on the card used.

These financial services corporations will then be expected to arbitrate on the matter, decide if the debt is to be repaid, and then which bank must refund the money to the customer. If your bank refuses to even consider a chargeback, don't give up.

If you get nowhere after a week then you should take the matter to the Financial Ombudsman Service. It said it is aware that many banks are refusing to issue a chargeback and it will get involved in these cases.

However a request for a chargeback must be made within 90 or 120 days from when the voucher or gift card was bought. Section 75 of the Consumer Credit Act will also cover gift vouchers providing the cost is for more than £100.

If all else fails you can add your name to the list of creditors held by the administrator. However as an unsecured creditor the likelihood of getting any money back is slim.

Faulty goods

You can't go to the retailer for redress in these cases but other companies may be liable.

If you bought the goods with a credit card and the cost was over £100, and less than £30,000 the customer has protection under Section 75 of the Consumer Credit Act. This makes the card issuer liable in the same way the retailer was and must either issue a refund, pay for a repair or replace the faulty goods.

The customer has the same protection under Section 75 of the CCA if they bought goods using finance or credit.

If the goods came with a manufacturer's warranty the customer can use this providing it is still valid.