BBB: What to do when a business closes

Posted at 10:59 AM, Sep 04, 2018

When a business announces that it will be closing its doors, the news can be worrying for everyone involved: employees, creditors, suppliers and consumers. But when a business closes down without warning, customers often turn to Better Business Bureau for help so that they are not left holding the bag.

Consider someone who has paid in full for a product to be delivered at a later date or who has put down a deposit. That person is in danger of losing their money and never receiving their order.

The BBB reminds everyone to protect themselves by following these suggestions:

Avoid paying with cash. Use a credit card to make large purchases. The Fair Credit Billing Act allows consumers to receive refunds for items that were not delivered as long as a dispute is filed with the credit card company within 60 days of purchase

Keep records of all transactions. This should be done for every purchase you make and will make the process of receiving your money back much easier.

Contact your credit card company to dispute charges. According to the Texas Attorney General, if the business fails to respond, customers should contact their credit card company in writing, formally dispute the charge and provide the issuer with a copy of the dispute letter. To be eligible for protection under the Fair Credit Billing Act, customers must dispute a credit card charge within 60 days. The credit card issuer likely will attempt to contact the merchant to determine whether the customer is owed a refund.

Pay for services when they are complete. BBB receives several complaints every year from consumers who paid for contracting, remodeling or large orders in full and in advance, only to have the business disappear without performing promised work or never deliver the products. While a small down payment is not out of the question, consumers should avoid paying in full until services are performed or they receive their purchase.

Keep in mind that If the company involved declares bankruptcy, consumers may be refunded for their purchase after the company has paid back their debt(s) by completing a “Proof of Claim” form and filing it with the bankruptcy court that is handling the company’s file. Still, there is no guarantee that you will get your money back, and you may have to hire an attorney.

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Got a question for the BBB? Contact Regional Director Kelly Trevino at  or call (361) 852-4991.