AC Installer Has Taken Our Deposit but Not Able to Carry out Installation

Lrohjoe on 20/07/2016 - 12:59

Hi all,

I'm looking for some advice as to how to have our deposit returned following a bad experience with an AC installer for ducted installation. There's a bit of a story behind this, but I'll try to stick to the important details.

In January this year, my wife and I decided to have ac installed due to the Perth summer being particularly hot. After looking around at some of the bigger companies, we ended up going with a small company because their quote was very attractive. The bigger companies were quoting close to $9000, while these guys were closer to $6000. They were very good at replying to phone calls and emails and came over for a lengthy house visit and inspection. Having agreed to the installation, we paid the requested deposit of 50%. After that, things started to deteriorate.

We organised installation dates and, multiple times, they did not show up. Worse, they didn't tell us in advance and were impossible to contact. Eventually, they told us that there had been a death in the family, and due to travelling overseas for the funeral and other expenses, they were in a poor financial situation. They also said that the original quote did not cover certain things and asked for a higher deposit. Obviously, I refused to give any more money, but I believe their story was true so I gave them another chance to carry out the installation. Again, they didn't turn up as promised and were impossible to contact. So, we requested the return of our deposit but they said they did not have any money and would not be able to return it.

I have taken the matter to consumer protection, but they were not successful. They were told the same thing, that the installer was in financial distress and couldn't return the money. They have said that the next step would be to take it to the magistrates court, but to get some advice from legal aid first. I was wondering if the Oz bargain community has any other suggestions? Someone suggested that a debt collector may be able to help, but I don't know much about this process.
In hindsight, there's a lot of things that I should have done differently. Like having a signed contract, refusing to pay such a high deposit, and going to a more reputable company. But, now, I'm just trying find out if there's a way to get our $3000 back.

One last thing. They have told us and consumer protection, that they have the ducting that was purchased for the installation and have offered to give that to us, presumably to lower their debt to us. I haven't decided whether to accept this. Does anyone know if this would be useful? Will another company be able to use this ducting in carrying out the installation for us? They have not purchased the ac unit, just the ducting.

Thanks in advance for any assistance.

Home & Garden

Comments

  • MrMcHairyHead on 20/07/2016 - 13:15
    +5

    I'm not a lawyer but I wouldn't accept any ducting. That just seems to introduce another huge layer of complication and ways for them to claim they owe you less. Plus, if they're this dodgy, it's probably crap used ducting they ripped out of someone's house or something.

    Just sue the bastards.

    • rohjoe on 20/07/2016 - 13:32

      Thanks mate, you're probably right

  • SnoozeAndLose on 20/07/2016 - 13:20

    Are you paying with CC? if it is a direct deposit, legal action is the only way to go and not guarantee that you will get any money left but some legal cost on top of it, even the court deemed that they have to pay you back the money, they can not due to their financial difficulties.

    • rohjoe on 20/07/2016 - 13:34

      Unfortunately we paid with direct deposit as it was the only option. That's what I'm worried about and was the reason the lady at consumer protection said to get legal advice first - she said they still might not need to pay. At least, she said, you don't need any legal representative for matters under $10000.

      • SnoozeAndLose on 20/07/2016 - 13:40

        After you are deemed Win, if they still have no money to pay you back you may need a sheriff order to force them to pay you.

        Going through this process will be loooooooooooooong.

        • rohjoe on 20/07/2016 - 13:45

          Is this after going through magistrates? Are we talking months or years? Are their agencies that will buy the debt, like debt collectors?

        • SnoozeAndLose on 20/07/2016 - 13:48

          @rohjoe:

          Sorry I dont know the answer to most of your question.I think we are talking about 6 months to a year for all this process been done but still no guarantee that you can get your money back if they are broke(may be you are getting $100 a month until everything payout).

          Is this after going through magistrates?
          Yes

  • rohjoe on 20/07/2016 - 13:50

    Thanks mate. We'll see how it goes

  • Rggmcl on 20/07/2016 - 13:50

    We went down a dreadful tract with a renovation. Long story. Too cut a long story short - solicitors, barrister, court but as the dodgy builder claimed no money we were awarded a very small amount. The legal costs were multiple times of the pittance we were awarded. In my experience I wish we had never sued; a very costly business. Just make sure you are not outlaying money with little chance of any returns. This dodgy company can declare themselves bankrupt and you will get nothing.

    • rohjoe on 20/07/2016 - 13:54

      Yeah, I was a bit worried about that. Thanks for sharing your experience. I think that, if it came down to hiring lawyers, it would quickly become not worth the cost since the amount we have to gain is relatively small. It's hard to just walk away from $3000,though.

    • FloatingPoint on 21/07/2016 - 11:15

      This dodgy company can declare themselves bankrupt and you will get nothing.

      That depends on how the 'company' was setup. Directors are still liable if the company trade while insolvent.
      Sole trader/partnership is even easier.

      • rohjoe on 21/07/2016 - 19:30

        I'd say that they are sole trader/partnership. It's basically a husband and wife that occasionally employ subcontractors

        • goodcopbadcop on 22/07/2016 - 03:20
          +3

          Having experienced this type of situation previously, a micro business like this are sitting in a very tenuous position. With no cash flow to buy materials - they are never going to be able to do any 'AC jobs'to bring the cash in. They have used your $3K to pay bills, other job's materials or wages. They are behind in paying everything - the ATO; suppliers; Super; Workers Comp etc. Technically they are insolvent as today they couldn't pay their bills but they keep hoping that somehow they will trade out of it….and live to see another day.

          Whilst one of your options is to make a formal claim to the Building Commission WA at this website:
          http://www.commerce.wa.gov.au/building-commission/payment-di…

          I don't believe that WA have much in the way of consumer protection laws with regards to contractors taking your deposit and not doing the work. Even if your case is adjudicated in your favour - the real problem is that they probably don't have money to either return your deposit or purchase the goods and do the job. But do that anyway because sometimes it is about paying the loudest squeaky wheel.

          If the above Govt Dept is getting no where then I would strongly recommend that you try and get back your deposit by personally visiting them at their office, home or a job. It will be a big effort and so you will need to be up for it because you are right - $3K is too much to walk away from.You will need to speak with them face to face and not give up. Try not to show your anger as this will make everything heated and emotional. If you are a nice guy (some wouldn't do this) and they are saying to you that they do not have the cash - ask them to come up with a list of goods that they can substitute for the $'s which you could use for your job. Air-conditioning duct is really not going to cut it though. It is about $17 a metre and you would never need $3K's worth.

          If they have a company structure - then they really need to call in an administrator so that as a Director they are not trading insolvent. However like many tradies - they set up with the wife either as a sole trader or partnership and in that regard they do leave themselves and the wife wide open if they owe money. Going through the Magistrates court will see them having to pay you back personally - maybe selling something to get the cash. The real rub will be though if this tips them over the edge and they simply file for bankruptcy. You are an unsecured creditor and will get nothing after banks or suppliers where they have signed a personal guarantee.

          Here are the lessons in this:
          1. Always get written quotes - and at least 3 -before you make a decision to compare apples with apples.
          2. Do your due diligence on the companies first. Ask friends and relatives for recommendations; research/google each one online to see if there are complaints about them. Take note and question the reviews with the company. PM people if you can to get their first hand story. Question a huge difference between the lowest and highest quote. Make sure that they are using reputable brands.
          3. Get a contract in writing that sets everything out including a break down and costing of the materials and installation/labour; and timeframes/dates; and what they will do and what they won't do. Know how long the job will take so that if they are stuffing you around - you are onto them. Ensure that there is a guarantee of their workmanship that they will fix at no charge to you, written into the contract.
          4. If the company is demanding that you pay half as a deposit - instead say that you will buy and store the materials in your possession so that if they do not do the job you at least have the ability to find another contractor and haven't lost any money.

          To be honest, I would do your personal touch and visit first. If nothing came of that - then the Building Commission claim or the Magistrates court. And I wouldn't want them to do the job at all. Trust has been broken - they will probably do a bad job and you will wish you had never allowed them to set foot in your property. If you can get the owed money - great - but you may have to prepare yourself for the worst. So start fresh - prices will be competitive in Perth now that mining has gone off the boil. Maybe you can get a great deal for the equipment and the installation price as you will be coming out of the winter season and just before it gets busy.

          Apologies for the lengthy response….

        • rohjoe on 22/07/2016 - 20:16

          Thanks for all the info, mate. That's all really useful. With regards to making a complaint to the Building Commission, do they have the ability to demand our money he returned, or is it more something to affect their registration? Either way, I think it's worthwhile, but just wanted an idea of the expected outcome.
          Thanks again

  • Rggmcl on 20/07/2016 - 14:11

    Unfortunately sometimes we learn expensive lessons. It does hit hard to lose one's hard earned money and does not help in our personal relationships. The laws are not strong and that is why these dodgy (I have stronger terms) people get away with poor workmanship, not providing goods etc. Most people do not sue as the legal costs are so expensive and no guarantee of a good outcome. These dodgy low lives know this.

  • 2jzzzz on 20/07/2016 - 14:49

    The courts are at your disposal….. A way to quickly and efficiently dispose of your money with little chance of getting any money back…

  • [Deactivated] on 20/07/2016 - 16:16
    -3

    bikies

  • uzz30 on 20/07/2016 - 16:40
    +3

    I had a similar experience, I wish I'd taken what I could when I could because as an unsecured creditor I came last when the bankruptcy happened and got nothing back at all.

    You may get a favorable ruling from the magistrate, but you may be trying to extract blood from a stone and this might just serve to hasten the bankruptcy.

    If you can get the ducting and anything else then I would do so. See if you can get the invoices stating the value of what you get then put a claim in for the remainder with the magistrate.

    Here's the process - http://www.magistratescourt.wa.gov.au/_files/Civil_factsheet…

    It looks like it'll cost you about $190 in court and bailiff fees but it might help you get you some leverage - http://www.magistratescourt.wa.gov.au/_files/Magistrates_Cou…

    Don't give anymore money to the installer, they have fallen on hard times and that the have offered you some materials seems to indicate some of their intentions are good. Even with good intentions the banks could come crashing in at anytime and force them to the wall. Probably all they can offer you beyond the ducting is their labor.

    Offer them a deal. You buy the remaining components required to finish the job, they perform the installation in exchange for you wavering the debt they now owe you. Hopefully this adds up to about the same expenditure as the $9000 quote from the reputable suppliers and you have yourself and AC system at the end of it all. Even if it goes wrong and they don't do the installation, you'll have the components to engage a competent installer to complete the job.

    • rohjoe on 20/07/2016 - 19:31
      +1

      As you said, I was a bit concerned that putting too much pressure would lead them towards bankruptcy sooner. My parents had a situation where a tenant owed them money but declared bankruptcy and ended up only being required to pay them something like 2% of what they owed.

      When the installer told us he was having troubles, we actually came up with the deal that we would pay the AC unit supplier directly so that the labour would be all that was needed. But, after that was agreed to, the supplier and the installer did not show up. By this stage, I think we've lost all confidence in them, so it would be hard to agree to any sort of deal.

      I'm going to speak to some other AC installers and see if they would actually use the ducting if we got it, and if they would pass on the savings.

      Thanks for all the info regarding the magistrates process.

  • [Deactivated] on 20/07/2016 - 16:42

    It would be nice if companies treated deposit money the way bonds and deposits are treated in real estate. There would be certain things companies would be able to do with deposit money such as buying inventory for specific customers. Then the rest of the deposit could be released once the company is processing the job the funds were deposited for. This would mean that companies couldn't use business funds for personal expenses which it sounds like this company has been doing. Most companies have a business line of credit. It sounds like this one doesn't or they've extended the debt to as far as they can go. Why not ask them if an instalment plan can be put in place for paying back the debt.

    • rohjoe on 20/07/2016 - 19:33
      +1

      I had suggested that they pay in instalments once previously, in an email, but they failed to respond. I think I will try that again.
      It does seem absurd that a company can use business money for personal expenditure. If they couldn't, then I don't think this would have happened.

  • John on 20/07/2016 - 17:51
    +5

    I'm interested to know the company name (as I'm in Perth as well). And another thing is to see whether they are still actively promoting their business eg. website etc. If so, then they may be in the business of scamming people.

    • rohjoe on 20/07/2016 - 19:39

      I'm a bit hesitant to drag down someone's reputation so publicly at this sathe. But, if you are worried that you could be engaging the services of the same guys, I'd be happy for you to pm me.

  • altomic on 20/07/2016 - 19:24
    +6

    name and shame.

    • FloatingPoint on 22/07/2016 - 10:48

      If OP is going to magistrates court I don't think it's a good idea to 'name and shame' here… yet.

  • djkelly69 on 21/07/2016 - 08:04
    +3

    No real need for solicitors in this instance. I am not from WA, but basic process should be:
    - apply to civil tribunal claiming breach of contract and amount owed (seems very cut and dried).
    - assuming they don't bother defending (as there is no defence - they took the deposit/money and didn't do the work), get default judgement.
    - apply to magistrates court to get debt enforced.
    - let them get the blood from the alleged stone
    - ???
    - profit (or at least hopefully some money back)

    Is a fairly lengthy process but should be quite straight forward if you can read and fill in forms. I definitely wouldn't just give up in $3k!

    • kima on 21/07/2016 - 12:02

      yes that way you know if he really doesn't have anything and you can also make sure something is done to stop him doing it again

    • rohjoe on 21/07/2016 - 19:13

      Thanks a lot for the info. That gives me some hope!

  • robertbruce on 21/07/2016 - 08:51

    This isnt Glenn is it, Prince of Promises, sounds like him…

    • rohjoe on 21/07/2016 - 19:15

      No, not Glenn

  • wayacos on 21/07/2016 - 11:57

    First thing you should do is name them to save others.

  • Fluter on 21/07/2016 - 12:05

    A long time ago now but in the uk we had a court order us payment by a dodgy guy who wouldn't pay. I don't know the technical term but then there was something put against his property so he wasn't allowed to just sell it without the court getting involved again and getting their/our money out of the sale money first.
    Any such thing here?

    • djkelly69 on 21/07/2016 - 15:18

      That is a caveat. Yes we have them here as well. I think a garnishee order would be more likely in these circumstances though.

  • [Deactivated] on 21/07/2016 - 15:19

    Also be aware you may be able to get police involved (and ASIC if A/C company is registered) if the A/C company took your deposit knowing they would not be able to carry out the works. This may be Insolvent Trading.

    If you suspect any form of misrepresentation or fraud by the company then it can't hurt to contact the police.

    Their misfortune does not mean they can break the law and pass misfortune off onto other people like you.

    • rohjoe on 21/07/2016 - 19:14

      Good idea. My dad actually said the same thing. I will give the police a call and see what they say.

  • snook on 22/07/2016 - 00:06

    With the direct deposit and no paper trail, this sounds like a scam.

    I don't think ducting costs very much, especially from a wholesaler where a tradie would get it.

    • rohjoe on 22/07/2016 - 00:51

      In terms of a paper trail, we corresponded largely by email so there is a fair bit of evidence. But, when consumer affairs asked me for proof of payment, all I could show was an sms they sent to say they received the payment and my the receipt that my bank generated. At least it was better than nothing.

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