We’ve written many times that as much as possible you shouldn’t be giving companies interest free loans in the form of buying gift vouchers from them.
A couple of weeks ago we also pointed out the danger of the suggestion from the Consumers Association of Ireland Chairman that we start to avail of “lay away” facilities that might be provided by some retailers.
We also mentioned that you should think twice before getting involved in savings schemes facilitated by some retailers – particularly Christmas Clubs.
In all these scenarios, you’re basically giving your money to retailers in return for the promise that they’ll provide something at some date in the future. You’re basically providing them with an interest free loan until the time that they have to provide the good or service in the future.
And if that business were to close down in the meantime, you’re likely to lose all of your money. You’ll be know as an “unsecured creditor” – if the banks and other creditors and lenders get their money back, then you’d get yours. But that’d be very unlikely.
It’s good to see, though, that the National Consumer Agency are starting to get in on this – warning people of the dangers of deposits.