DK Windows in liquidation - owing €1.5m in customer deposits

Brendan Burgess

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Customer fury as Dublin windows company shuts with thousands in deposits

DK Windows was promoting Black Friday sales just a week before it went out of business
www.irishtimes.com

Dozens of customers of a Dublin-based windows and doors company that went into liquidation late last week have expressed anger and concern that money they paid as recently as two weeks ago will never be recovered.

One couple who contacted The Irish Times said they stood to lose close to €50,000 after provisional liquidators from Grant Thornton were appointed by the High Court to DK Windows & Doors, a company based in Dublin 12 that has been supplying windows and doors to both developers and consumers since 2005.

The company – which boasts on its website of having featured in RTÉ’s Room To Improve series – said in a petition to the High Court, that it had built up €1.5 million of customer deposits but had run out of cash.
 
Not sure on the chargeback expiry period (if theres such a thing).
These orders were likely paid months and months ago, imagine they had to pay a good deposit as well.
 
That was a signal that there were issues, from the outset....

Granted, there are charges associated with card payments, but the simple solution to that is either absorb them, or try to pass them on to the customer.

Likewise, any business looking for big advance deposits, sounds like a business under serious cashflow pressure, or a business that has problems obtaining trade credit. Either way, proceed with the utmost caution and don't hand over large advance payments.
 
How did the couple part with 50k before the job was done ? Must have been some job or maybe it was Ronan & Ronan.
 
Initial liquidator's report out
https://www.irishtimes.com/your-mon...are-unlikely-to-get-refunds-warn-liquidators/

225 customers looking at losses of up to 50k

There's an easy way to protect customers in situations like this. Insist that any company taking deposits must offer card payment and inform people that paying by card offers protection to their deposit. Might need to be legislated for, but it would be welcomed by most.

It will cost about 0.4% in card fees, but would protect the deposit if a company closes.
 
They used to accept card deposits, the government is unlikely to be able to mandate that only card payments are used due to those who complain about keeping cash as an option.

The opportunity here is one of consumer education. People need to exercise extreme caution dealing with a business who stops accepting card payments, as they may well be doing so due to cash flow problems.
 
Not a mandate to only accept card payments, but a mandate that card payment must be an option and to inform people that payment by card gives them protection.

If they want to pay by cash or bank transfer, they can, but they need to know that both those payment options carry a risk in the event of non delivery.
 
Leo said:
People need to exercise extreme caution dealing with a business who stops accepting card payments, as they may well be doing so due to cash flow problems
Click to expand...
A couple of chippers in my locality don't accept card payments, cash only - I hope I don't end up out of pocket and hungry one of these days...
 
peemac said:
Not a mandate to only accept card payments, but a mandate that card payment must be an option and to inform people that payment by card gives them protection.
Click to expand...
What about the use of some form of escrow account for deposits?
  • Customer agrees deal with supplier
  • Supplier issues pro forma invoice with stages and dates
  • Customer deposits agreed amount into escrow
  • Payments issue to supplier as each stage completes and customer/assessor sign off
  • Customer tops up escrow account as job proceeds
  • Final payment subject to engineering report on completed project.
There are additional costs here of course, but losing €50k is a massive hit for an ordinary working family to take for no return.
 
peemac said:
Not a mandate to only accept card payments, but a mandate that card payment must be an option and to inform people that payment by card gives them protection.
Click to expand...
Good in theory, but a company knowing they are in dire financial straits might still conveniently forget this in the weeks before they collapse.
 
Hello,

Anyone handing over large deposits in advance of work being done, needs their head examined...that's the real consumer education piece.

Sure, booking deposits are appropriate and yes, perhaps a further element of a deposit for customised items that need to be made in advance, but there's no justification for having to handover 40% - 70% of the price in advance.
 
MrEarl said:
but there's no justification for having to handover 40% - 70% of the price in advance.
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It’s a long time since I bought windows but IIRC there is a big upfront payment as they are made to measure. Our fitters mismeasured an opening and had to eat the cost of a new window. Not a happy man.

What’s needed in Ireland is a more serious official attitude toward reckless trading up to and including criminal sanction.
 
There is an inherent problem with zealous reckless trading laws as they discourage business owners from bona fide attempts to save their businesses.

I'd recommend some sort of voluntary assurance scheme where companies with clearly adequate working capital can be duly certified as such, as long as they remain in that state.

Thus if you leave a large deposit with such a company, it should be a lot safer than with an uncertified company.
 
MrEarl said:
Anyone handing over large deposits in advance of work being done, needs their head examined
Click to expand...

Unfair to lay it on the consumer. I dealt with a number of window companies in the past and all were looking for 50% upfront, on the basis that they had to pay the overseas manufacturers upfront. There wasn't any negotiation possible on this. I was very uncomfortable with it to be honest.

The same issue arises in other businesses, e.g. Shed and garden room providers, hotels for events etc. Again these require substantial downpayment, offer no collateral, and deal in long lead-times.

The solution is that any business seeking a substantial unsecured deposit is required to be bonded, be it mandatory or voluntary. (Just like bonding was introduced for travel agents after a number of high profile disasters where consumers were take to the cleaners). Personally I'd favour this being introduced across all sectors as part of general consumer law.

There were similar incidents in the past with the likes of white goods retailers who took a substantial deposit and "put the goods away" awaiting new build completions. And then went bust. A number of them "re-opening" under the same trading name the following Monday. I know a number of young couple who were stung by this which they could ill afford. My advice to anybody dealing with any of these outfits even now is to get the goods immediately, even if they need to be put in somebody's (insured) garage.

Dr Strangelove said:
What’s needed in Ireland is a more serious official attitude toward reckless trading up to and including criminal sanction.
Click to expand...

I'll second this. If it's the case and it can be proven that new deposits and final pre-installation payments are sought and accepted when the business concerned knew it was under financial stress and there was a reasonable doubt about delivery/completion then there should definitely be criminal sanction.
 
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