Analysis: Law change on vouchers would be a perfect gift

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We must protect consumers when firms go bust, says Fiona O’Donnell

Many of us struggling to think what to buy for the person who has everything, or not feeling certain about someone’s tastes, bought gift vouchers at Christmas. Those who bought their vouchers from HMV would never have thought that their gift might end up being worthless.

But that was the situation many of my constituents found themselves after HMV went into administration. The uncertainty about the redemption of vouchers prompted several of them to let me know of their anger.

So, while I was relieved when HMV and its administrators reconsidered their decision, I believe that the fiasco has highlighted serious shortcomings in current consumer protection law.

When you hand over money for goods, you still have the goods when the company goes into liquidation. People buying gift vouchers should do so with assurances that if the worst happens they have something of value in return.

Richard Lloyd, executive director of consumer group Which?, said it was “outrageous” that HMV customers had potentially been left out of pocket. He has called for the rules on gift vouchers and insolvency to be reviewed.

I was keen to reflect these calls and the experiences of HMV customers, and tabled a Parliamentary Early Day Motion welcoming the decision to honour the vouchers and urging a review of the law to ensure that customers are protected.

As a minimum, I would like the government to make it illegal for companies not to honour gift cards and vouchers. I hope that we can ensure that customers will not face the same unfairness and uncertainty in future.

• Fiona O’Donnell is MP for East Lothian.