Deposit dilemma

Morgan, Michael
March 2005
Cabinet Maker;3/25/2005, Issue 5431, p20
Trade Publication
The article focuses on deposit protection, which has again reared its head after the collapse of a number of furniture retailers in recent months. The Office of Fair Trading has made it clear that if the furniture industry cannot, or will not, improve the situation of its own volition, it will have to consider whether legislation is appropriate. The following protection mechanism of deposit protection have been devised: Trust accounts; Retailer insurance; Retailer cross-guarantees; and a central fund. A central fund involves retailers paying a fixed amount per sale or fixed percentage of sales into a central fund to compensate consumers affected by a collapse. This affords good protection for the consumer, with a clearly defined pool of funds being held away from the danger area. INSET: Is a protection scheme needed?.


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