Limerick hotel refusing to return deposits

Flaccus

http://www.limerickleader.ie/news/Limerick-hotel-refuses-to-return.4920425.jp

While I feel sympathy for the staff that are working there, it would seem the hotel management are refusing to return deposits to couples who had planned their wedding reception there. The article above mentions that the couples signed a document which said the deposits are non refundable. But surely this does not apply if the hotel cannot guarantee the place will be open to provide the service these people have paid for in the 1st place ? Is this just a stalling tactic to hold onto peoples money in case the company goes into liquidation, and then these people become unsecured creditors with no chance of a refund.

Luckily a close friend who also booked his wedding there, tells me he is going to be able secure his deposit back through his credit card company.

penexpers

Flaccus wrote: »

http://www.limerickleader.ie/news/Limerick-hotel-refuses-to-return.4920425.jp

While I feel sympathy for the staff that are working there, it would seem the hotel management are refusing to return deposits to couples who had planned their wedding reception there. The article above mentions that the couples signed a document which said the deposits are non refundable. But surely this does not apply if the hotel cannot guarantee the place will be open to provide the service these people have paid for in the 1st place ? Is this just a stalling tactic to hold onto peoples money in case the company goes into liquidation, and then these people become unsecured creditors with no chance of a refund.

Luckily a close friend who also booked his wedding there, tells me he is going to be able secure his deposit back through his credit card company.

Unfortunately it does apply if the hotel can't guarantee the wedding. They signed a contract that said the deposit was non-refundable and the contract was valid so there's no comeback there. If the hotel were to close then anyone who had paid a deposit would become a creditor with a small chance of getting a refund.

Would like to know on what basis does Consumer Affairs think that people like the couple featured are entitled to their deposit back.

jor el

The credit card will only get his money back if the hotel closes down. Until then, his wedding reception is still a possibility, unless he himself decides to go elsewhere. In that case, he wouldn't be due his deposit back, as he'd be forfeiting it for canceling his reception.

They obviously don't want people to cancel their plans, because the hotel will need the money, and the business, in the event that they stay open.

At the moment, the hotel hasn't closed, so any deposits paid are for events or dates that may well proceed. As such, any cancelation by the wedding party will mean forfeiting the deposit. I too would like to know what "Consumer Rights" are on about when they say, and what agency exactly this was? Also, they put a 2,000 euro deposit on this, what madness. They're idiots for putting that much of a deposit down, when they say themselves that typical deposits are 500-800.

Flaccus

Yes, they signed a contract that the deposit is non refundable. However the hotel have specifically said they cannot guarantee the place will be open. So rather then potentially wasting more money (band,invites,catering etc..) and then crossing his fingers and hoping the the hotel will be open on the day, he wants his refund on the basis he has paid for a service that they cannot guarantee. The credit card people seem to be taking his side and have already spoken with the hotel. He tells me the money will be back on his card by the end of the week. Hope this is the case.

jor el

Flaccus wrote: »

However the hotel have specifically said they cannot guarantee the place will be open.

No company can ever absolutely guarantee delivery of something you pay a deposit on, companies and hotels do go bust, and there's usually little or no warning. That's part of the risk of paying a deposit.

In your friend's case, it's a little different, as the hotel are now saying they know they're in trouble, and as such the credit card insurance might cover, even if they're not gone bust yet. If the bank are looking into your friends case, then that's good for him, at least he has a hope. Lucky he didn't pay cash, as those people will almost certainly not get anything back.

Flaccus

Indeed. Will be talking to him this evening. I think he has a good chance of getting it back because as you said the hotel have admitted they could be in trouble.

darc

Flaccus wrote: »

Indeed. Will be talking to him this evening. I think he has a good chance of getting it back because as you said the hotel have admitted they could be in trouble.

Seems its gone into liquidation today - pity as it was a nice hotel and whenever i stayed there staff were excellent.

You'll probably find someone will buy it at the right price as it had a good wedding / conference business.

Flaccus

Turns out mate never signed any form to say he had paid a non refundable deposit and took the event manager at her word when she said the refund would be in his account by Friday. Now the credit card company are saying he will have to wait 30 days and they cannot guarantee anything as the hotels credit is frozen. While I fee sorry for the staff of the hotel, I really feel sorry for my mate and others who had their wedding receptions planned for next month and had paid down substantially more (4k+). Anyway, it turns out there is a solicitor who is going to represent these people in an effort to get their money. Don't hold out much hope though, now that the liquidators Grant Thornton are appointed.

TheDriver

I stayed there a few months back and at the prices they were charging, felt the location and quality was poor, room felt bit worn and location wasn't great compared to a lot newer hotels. 99 euro breaks had better appropriated places than this place.

Sponge Bob

The Castletroy Hotel closed today .

Your mate can do a chargeback once the liquidator is announced

http://www.limerickleader.ie/news/Castletroy-Park-Hotel-on-the.4926993.jp

Over 40 couples have paid a wedding deposit and only those smart enough to use a credit card will ever see a penny of it .

For deposits on big ticket items like weddings and suites always use a credit card in case it does not show up months or a year later . Never pay cash deposits .

Also note that some CC providers, notably MBNA, will not facilitate a chargeback .

Flaccus

Actually Sponge Bob a charge back is doubtful as the credit card companies are telling customers the companies credit is frozen and nothing can be done. So very little possibility of getting money back for lack of service. Hence why a well known solicitor is now representing these people and looking at suing these credit card companies.

antoinolachtnai

It is technical. They will get their money back in the end, but how exactly it gets paid back depends on all sorts of things, but mainly how much debt the hotel operator is carrying. I'm sure the solicitor will sort it out, but your friends would need to be sure that needless bills aren't run up that can't be recovered later.

Sponge Bob

Basically .

1. You wait for the liquidator to be appointed.
2. You write demanding all your money back , with interest of course.
3. Liquidator tells you to bugger off , in writing
4. Then do chargeback .

If they appoint an examiner or do a section 201 process then it is different becuase the hotel is still trading and may actually deliver teh service .

Flaccus

A liquidator has already been appointed is my understanding. There is already some online form up and running and a phone line setup too. Anyway after talking to my mate in person this morning (and not his family members who were giving me different stories), on advice from his solicitor he told the credit card company he gave his details to the hotel so he could secure a place but at no time did he authorise any specific payment or sign a contract with them for payment and as a result will be refusing the charge plus any interest and taking his business elsewhere. The credit card company are now genuinely trying to get his money back he reckons. I'd say he is in a better position then a lot of people as he signed nothing, and paid by credit card.

Sponge Bob

Hotels make a lot of use of 'pre auth' . When you book they see if the card is good for the booking ....typically €100 but for a gig like this it is €3000 .

Flaccus

He never authorised payment. He was told the card was needed for security purposes. That's the story he is sticking with

Sponge Bob

Thats exactly what a pre auth is Flaccus, a security check on the validity of the card :cool:

Tell the next hotel that an escrow is required , ie leave the money with the hotels solicitor to be handed over when the hotel delivers the reception in full .....and not a day before .

If the hotel goes tits up the solicitor must hand it back .

Flaccus

Good tip on the escrow. Thanks.

By the way, I realise what a pre-authorisation is. But he didn't. He was told a credit card was needed for security reasons. And most security checks as you pointed out check for 1 euro or so. But his position is he never authorised the hotel to take 2k euro, was never told they were taking 2k euro, and he didn't sign anything about a non refundable deposit for 2k euro. So he is refusing the charge from the credit card company and has told them so. Credit card company seem to be taking it seriously and are going to ring him by 4pm today with an update. Fingers crossed.

Sponge Bob

He signed no contract authorising anything which is good for him .

The real point here is that if he paid cash he would never see a penny of it , paying by credit card will have saved him €1000s ...I hope.