How to Protect Yourself: Firms Going Out of Business

How to Protect Yourself: Firms Going Out of Business
Source: Florida Attorney General's Office

When a business closes, there may be little warning, and it may be very difficult to retrieve merchandise or deposits left with the company. To protect yourself from losing money when a company goes out of business, consider the following:

Research the company.
Find out how long the company has been in business and take the time to research its past successes and failures, especially if you are leaving an expensive item to be repaired or will be making a large deposit. Call your local Better Business Bureau and government agencies like the Florida Department of Agriculture and Consumer Services, the County Consumer Affairs Bureau, the Office of the Attorney General and the Federal Trade Commission to determine whether any complaints or lawsuits are pending. For an out-of-state company, you may wish to call the appropriate agencies and authorities in the state where the company maintains its headquarters.

Ask for references.
Find out if the company belongs to any associations, and ask the association whether the company is a member in good standing. You should also ask friends, co-workers and relatives if they are familiar with the company.

Look around carefully.
Take a look around the store before agreeing to do business with the company. Note whether shelves or showrooms are fully stocked and ask yourself whether the business location looks temporary.

Stop by or call often.
If you have left merchandise or made a prepaid order or deposit, call or stop by the store regularly to inquire about the status of your repair or order. If you are told that the order or repair will take longer than thirty days, be skeptical.

If a business unexpectedly closes.
If a business location has closed, look for some sign or indication at the business's former address explaining how it can be contacted. For businesses with other locations, try calling another outlet or the company's headquarters to determine what action can be taken. If no other location exists and no indication as to where the business can be contacted is apparent, ask neighboring business owners or competitors if they know where the owner can be reached. You may also wish to contact the owner or manager of the building where the business was located about a possible forwarding address.