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Frequently Asked Questions
Frequently asked questions about WrapIt, their current financial situation, and what consumers can do to try to protect themselves if WrapIt goes into liquidation or administration.
According to WrapIt's website:
Wrapit Latest News - Wednesday 30/07/08 17.00We're afraid we still have no news. We will update this page when we do.
Talks continue with our advisers and several possible sources of finance and we are still optimistic that we will find the solution to Wrapit's current difficult financial circumstances.
We can't tell you how sorry we are that you have become embroiled in this difficult situation at a time which should be a very happy one for you. We are doing our best to resolve the situation as soon as possible and believe that there is a realistic chance that we will be able to complete our wedding list orders, as normal. However, we won't know for certain until the end of this week.
Please know we are doing all we can and will keep you posted with progress via regular updates here on the website.
There's not much more that we can say right now. However, we have included below the answers to most of the frequently asked questions from both gift purchasers and couples.
For all press enquiries please email
(emails from couples or guests to this inbox will not receive a response)
Wrapit’s advice to couples
Your wedding list
Although gift reservations can still be made on our website, no funds are actually being processed. Instead data will be securely held until we are in a financial position to process the purchase.If you would like to ask your guests not to make any further purchases from your wedding list, please log in and alter your welcome message (or 'message to guests') on your Wrapit homepage to that effect.
Your guest's money
If they paid using any credit card, Amex or Visa debit card, they will be able to claim a full refund. However, it is necessary to wait until the gift should have been delivered before making a claim.Couple refunds
We're afraid no refunds at all can be processed at the moment. We will keep you updated regularly regarding this.The Showrooms
We will not be setting up any more wedding lists this week, therefore our showrooms will not be open.Warehouse stock
If there are items in our warehouse which have been allocated to you, these will be delivered to you in the normal way. However, if you would prefer to come to the warehouse to collect them yourself, we will be happy to help you.We have set up a special number to call to arrange collection times 020 8877 5816. Please note the people who will answer this number will only be able to answer questions about stock in the warehouse, and note that if you ordered your list after the 1st June, it is very unlikely there will be any items for you to collect. The warehouse will be open from 11.00am to 4.00pm Monday-Friday. We are not open on Saturday. The address is Wrapit, Unit 34-40 Brunel Road, London. W3 7XR.
Please do not arrive at the warehouse without an appointment as it greatly slows down the collection process for all of you.
Customer Service
Please understand that we are inundated with questions about individual wedding lists and currently have no further answers than are detailed on this page. Therefore we would be extremely grateful if you would be patient until the end of this week. In the meantime, we will update the website daily and send out emails whenever we have news. If you have to contact us please emailand we will try and get back to you as soon as we can.
Wrapit's Advice to guests
Refunds
Can I claim my money back if the gift I bought was not delivered? The answer, for most people, is 'yes'. If you used a credit, Amex or Visa debit card to make the purchase, your card company will give you a full refund once you can demonstrate that the gift was not delivered in the timeframe promised by the retailer. In our case, this is roughly 12 weeks after the relevant wedding. All you need to do is contact your card issuer and claim the refund. They will do the rest. Some banks may refer you back to us with a request to issue you with confirmation of Wrapit's financial status. Unfortunately it is not possible to issue these until Wrapit's financial situation is made clear. However, once we have that clarification, you may well wish to retain your gift purchase. We therefore recommend you wait until we can an official announcement is made here in the coming days.You may have read that these refunds only apply to purchases over £100. The Consumer Credit Act only requires card companies to cover purchases over £100, but the card companies, in fact, provide this cover for any purchase.
You may also have read that claims must be made within a limited timeframe. The time limit is six months from when the gift should have been delivered. This, in practice means that you will have at least nine months from the wedding date to claim your chargeback.
You have probably heard or read recently that Wrapit is in financial difficulty. I'm sorry to tell you that this is correct. However, we are not in Administration, as has been claimed. As you have a list open with us I am sure that this news will cause you grave concern and you will want to know that you will receive your gifts as we promised and, at the very least, that the money that your friends and relatives have so kindly given us on your behalf will not be lost. We owe you an explanation, so here it is ...After six years of successful trading and rapid growth we ran into a problem in May when our bankers, HSBC, announced without warning that they were concerned about the potential chargeback risk if Wrapit was unable to fulfil its obligations to guests to deliver the gifts purchased. Their solution was to sequester all our credit and Visa debit card revenue into a separate account to provide them with added security. This meant that we were unable to pay suppliers and sometimes resulted in late delivery of gifts.
The solution was to raise some additional cash to satisfy the bank and put the company back on an even keel. We were due to complete on this funding next week. However, the deal fell through on Wednesday evening. Since then we have been working with our advisers, KPMG, so to secure a financial package, fast. They believe that this should be possible within about a week.
So, the chances are that your list will be fulfilled in the normal way, if, perhaps, a bit late. However, nothing is certain and we must address the situation if Wrapit does end up in more serious trouble. In this case, you need to know that most of your guests will be able to get their money back through their credit/debit card provider. They simply need to let them know that the gift they bought was not delivered in the specified time frame and they will get a refund without question. This applies to all credit cards, Amex cards and Visa debit cards. Together, these make up more than 80% of gift purchases.
I can't tell you how sorry I am that you have become embroiled in this difficult situation at a time which should be a very happy one for you. We are doing all we can to ensure that it will all turn out alright in the end and we will keep you posted with progress via regular updates on the website.
We must also urge everyone to stay calm. We are being inundated by incoming calls and emails, which are overloading our systems. A rush on Wrapit at the moment isn't going to help anyone right now. In fact, it may well be counter productive to the efforts being made by our advisors to secure everyone's future.
Please understand that we cannot respond to your emails individually at the moment. If you have to contact us please email
However, I promise to keep you posted so that any news you hear about Wrapit will be from us first.
We look forward to giving you better news next week and to getting back to normal soon.
Yours
Pepita Diamand
_______________
Pepita Diamand
Retail Director and Founder
Yep, they really were that dumb. Add Data Protection to the list of things that WrapIt need to study harder.
It was a great break for us, though -- because now we have a list of most of the people we think are affected by the situation at WrapIt, and we can get in touch with them and ask them to visit this website to mobilise together.
Yes, another email went out on Monday morning, 28 July:
On Friday we sent an email to couples who might be affected by Wrapit's current financial situation under Pepita Diamand's signature. Unfortunately, in all the rush, it was sent directly to these couples rather than using the 'bcc' facility. As a result, you will have got an email with several hundred addresses in the addressee field.This was obviously a mistake, for which we apologise. I must also point out that it would be an offence under the Data Protection Act to communicate with anyone in that email without their express permission. So please respect the privacy of the other people on the list.
It won't happen again.
It never rains but it pours!
While writing, I thought that you would like to know that we are in talks with three possible funders and will keep you posted with progress via the website, where we will publish daily updates and related FAQs.
Kindest regards,
Wrapit Customer Service
Editor's note: I am loving the fact that they are now threatening US with the Data Protection Act, after their enormous blunder.
This from a response on the Facebook group...
"I've rung HSBC and they are saying that they can't do anything until Wrapit are actually in administration/liquidation.HSBC are aware of Wrapit's situation and are monitoring it. Wrapit have told them they are still fulfilling orders at this point in time. I told HSBC that you heard there are massive delays on receiving gifts.
If Wrapit fail then HSBC will process the situation on behalf of the credit provider (in my case Mastercard). This means that CC holders are better protected to get funds back than those paid by Debit card.
The other thing to do is find out what the Terms and Conditions are for delivery time on the gifts. If they breach this then everyone can contact their bank/credit provider and ask for a refund. "
Right now, the purpose of this website is to bring people together in case there are grounds for legal recourse. Marc Yaffe, another affected WrapIt customer and a lawyer specialising in this area of law, has offered to help coordinate the test case. Here is the offer he made on Facebook last Friday (25 July 2008)
My name is Marc and I am a solicitor specialising in the area of law to which this Wrapit fiasco relates. I got married 3 weeks ago and have just returned from my honeymoon. I too have a list with Wrapit and have circa £6,000 outstanding with them.I have been in touch with 300 wrapit customers today and I am working hard to find a number of possible solutions for customers irrespective of whether wrapit goes into administration. Early indications suggest that HSBC have a lot to answer for and I am collating advice from a variety of professional advisors.
What is clear is that if legal proceedings are to be brought, we need to unite because the Courts are likely to run one test case and then follow that precedent for all customers. Given that I have the same interests as all of you, if you would like me to keep you updated, please email me at
However, we are likely to have to wait a while before we can take any legal action. Another post from Marc said this:
I am a lawyer who has a list with wrapit and we have not had one item delivered. Most of the legal avenues of redress will come into play only if Wrapit goes into administration or some other insolvency process and I have been reviewing the position with professional advisors since yesterday. We have some encouraging ideas but we wil have to wait until the inevitable happens.
Finally, Marc sent this to the email distribution list on Friday:
I am sure that you are all shocked, dismayed and devastated by today's events and for many of you this is the last in a long line of miserable excuses from Wrapit.I too am in the same position as you and awaiting circa £6,000. I got married 3 weeks ago and returned to England from our honeymoon only last weekend.
I have seen similar cases of this type and whilst everyone wants to cement their own position, there is only one shot at this and we will either win together or lose together, but we must work together.
I have been contacted today by various media publications and they are very much on our side. Some of you will recall the Farepak case I am currently exploring with some of my colleagues and other professional advisors ways to recover the outstanding sums and although the law is extremely uncertain, we do have some encouraging ideas. Our best hope is perhaps to be against HSBC but we will all have to be patient as this is unlikely to be resolved within the next few days or even weeks.I for one will not give in without a fight.
You will see that it is 6.50pm on Friday and I am still sat in the office. The reality is that not much will change over the weekend, but I have put a series of questions to the Directors of Wrapit which, if answered, will make our position much clearer.
It appears that Wrapit's difficulties relate to a combination of bad management and an ever deteriorating finance market, but I still believe that we should be able to recover some, if not all, of the money due to us even in the event that Wrapit goes into Administration. However, this is a very complex area of law (involving Constructive, Resulting and Implied trusts as well as Directors duties and the Bank's agreement with Wrapit) and there is a lot of work to do.
I am unsure whether the people annexed to Pepita's email constitute the entire Wrapit customer base, but I would urge you all to ask others who have Wrapit guest lists to contact me by email. At some point next week (I am away on Monday) I will send out an email setting out how I think we should approach this matter, as well as a form for you to fill in your details, date of wedding, amount outstanding, date your list was opened and closed and other information which will be of use further down the line. It may also be sensible to set up a secure forum/website to keep you all updated.
It is likely that if a case is brought, only one case will be heard and it will be used as a test case for all others. As a lawyer and victim of these circumstances, I want to bring that case on behalf of you all and to do that we will need to drum up as much support as possible.
I have good contacts with the Media up North and my (new) wife works in PR so between us we will fight for you all.
Please, go home to your loved ones and switch off for the weekend. Let's come back next week with a positive frame of mind and the desire to fight this together.
More details on this coming soon...
The latest information on collecting your goods is as follows:
- everything in the warehouse has been allocated and is ready for collection
- you need to book an appointment with head office on the number given on the website and your goods will be packed up and ready to go when you arrive. It is a much quicker process if you have your order number.
- make sure you take some ID and your order number, ditto if you are picking up on somebody else's behalf or sending somebody down to collect for you there must be a letter/fax of authorisation from the list-holder otherwise they will not release the goods
- some deliveries went out today but apparently the 'delivery system is pretty booked up' so unless you have already received confirmation that Wrapit will be delivering then it would be safe to assume that they won't be breaking too much of a sweat to organise more deliveries (question: how are they paying the courier?)
- If you send a courier to collect for you they will still need an appointment and an authorisation letter/fax from you.
- if the business does go into administration at the end of the week then the administrators will seal the warehouse and nobody will be able to get access to the goods until the administrators have sorted things out. Because everything in the warehouse has been allocated and is (apparently) clearly labelled the administrators shouldn't have a problem identifying who gets what but after the process of administration has started we will have no control over when or how the gifts are delivered. My advice: try to get your stuff out asap .
- Perhaps some of you who live outside London could pool together to arrange a courier? Wrapit uses Citylink. Be warned: the Wrapit boxes are pretty huge so you might need a van - ask the warehouse to check how big your boxes are.
- I have asked the warehouse to release order numbers of those with goods waiting to be collected and they are putting this idea to head office....
Update on collections (28 July 2008)
There is now a phone number listed on the WrapIt website to enquire about whether any of your gifts are being held at the warehouse. The number is 020 8877 5816. Number will be open from 9am.
It all depends on whether WrapIt goes into administration or receivership.
According to the Citizen's Advice leaflet, if a company does go into administration or liquidation:
"If the goods you ordered have been earmarked for you by the supplier (for example, they have placed your name on them), you are entitled to have them and should contact the administrator or liquidator to prevent them from being sold. If not, you may be able to negotiate with the administrator or receiver to sell you the goods, but you can't insist that this happens.
If the company goes into liquidation, the liquidator may have to sell the goods to raise sufficient money to pay the priority creditors. However, they will sell you the goods if they are still available once the priority creditors have been paid."
As I understand it, the rationale of a limited company is to protect the shareholders from any liability beyond their share capital. In the absence of any special circumstances (such as fraud etc) directors are not liable for any debts of the company.
WrapIt's advisers, KPMG, are very competent and well known for handling administrations and corporate insolvencies. They are, of course, very expensive but most creditors will see it as money well spent.
Judging by the comments on this board, WrapIt have been heading into financial difficulties for a while. Certainly, failing to deliver goods when their suppliers have them to hand was fairly textbook evidence of trading difficulties.
It has been suggested that the directors may have behaved fraudulently or traded wrongfully. It is not incumbent upon directors or employees to disclose the fact that the company may be facing financial difficulties; this would be fatal to many commercial enterprises. It is generally sensible for a company to try and trade out of a downturn where the directors reasonably feel this is possible.
This is not to say the directors have behaved correctly - simply that there must be credible evidence to show fraud before it is alleged. Whilst involving the SFO and so on may result in a slap on the wrist for the directors, it is unlikely to recover a great deal of money for your guests.
The core of the issue appears to be that WrapIt have in some way fallen out with HSBC. This could be anything from breaching the terms of the overdraft, falling to make loan repayments, breaching the terms of a debenture. It would be pointless to speculate in any real detail. It is most likely, however, that HSBC will have a right to appoint an adminstrator if they feel it is appropriate.
So what happens on an administration? KMPG will move in and effectively replace the directors. They will try and keep the company trading. Failing this, they will try to get the best possible return for the creditors as a whole.
During this period, you will be unable to commence or continue legal proceedings against WrapIt. This includes any claims you have issued using Money Claim Online or required your local county court to seal and serve.
If KPMG are appointed as administrators, they will have 8 weeks to send out a pack explaining what they hope to achieve and how long it will take. Again, anything before this will be pure speculation.
In theory, therefore, an administration is not the end of the world. It ought to realise something for your guests as part of the body of creditors. It is not guaranteed and KPMG and their advisors will certainly pay themselves before you see a bean!
What are the alternatives? Hopefully, with KPMG’s assistance, WrapIt will resolve its difficulties and you will receive your gifts after a rather disappointing delay. The current commercial climate is very tight so these things do happen from time to time. It is very stressful for everyone involved, particularly during a time where you should be enjoying the fruits of all the work that went into the wedding itself.
Unfortunately, sometimes it is impossible for the administrator to save the business. In these circumstances, the company will normally go into liquidation and be wound up. This is generally bad news. The secured creditors (doubtless HSBC) will dash in and claim their security – buildings, leases, cars, goods etc. The liquidator will sell what is left and pay the preferential creditors – employees, the tax man and a few others. If there is anything left, the liquidator will then pay himself. Finally, if there is anything still in the pot, your guests will get a percentage based on the amount they are owed. This is quite often very little – few liquidations result in unsecured creditors recovering much of their money.
What should you and your guests do now? In my view, there is little you can achieve at this stage other than create (expensive) trouble for WrapIt and their advisors – particularly by involving the SFO etc. It may be sensible to write to them setting out the goods you have ordered and asking them to confirm that they are holding your goods. There is always an argument that these are already your goods and will not form part of any administration or liquidation – WrapIt are simply holding onto them on your behalves.
If they do enter administration or liquidation, it will be worthwhile forming a group and seeking legal advice. For the time being, it’s simply a matter of crossing fingers and toes!
Until yesterday, the only way to check whether there was stock waiting for you was to try to get through on the telephone line (not easy!) and ask, or to make your way to the warehouse to ask for yourself.
WrapIt have now added self-service functionality to their website (although anecdotal reports suggest that the self-service answer does not always tally with what is really in the warehouse).
From the latest news on the WrapIt website:
Warehouse stockIf you believe that you may have items in our warehouse which have not yet been delivered or collected, please log on to your list (using your usual user name and password). You will now find a new link on your homepage called "Gifts Available for Collection". Click the link to see exactly what has been received.
I am not sure that it makes any difference at this point whether you close your list or not. The biggest benefit of closing your list is that it prevents your guests from ordering any further items, but I don’t think that WrapIt are taking new orders anyhow.
If you are still at the point of closing your list, I guess you are still within the 90-day window where you are covered by the CCA. The people who really need to be concerned about losing their money are:
- Those who have placed orders more than 90 days ago
- Those who have placed orders for less than £100
- Those who have placed orders using a debit card
- Those who have placed orders using a foreign credit card
It is my understanding that the cases above are not covered by the CCA. Closing your list should not affect your ability (or your guest’s ability) to claim their money back.
There is a much fuller discussion of this subject on this forum topic about closing a list.
Maybe. It depends on how much you spent, who you bank with, and whether you paid with a debit or credit card.
Credit card payments
If you (or your guests) paid with a credit card, you are probably covered. You are [u]definitely[/b] covered if you live in the UK and spent between £100-£30,000 pounds, as the Consumer Credit Act (CCA) makes the cardholder jointly liable with the retailer for delivering your goods. Getting a refund from the credit card company should be a fairly straight-forward affair.
Most credit card companies will also offer you protection if you purchased less than £100, although they are not required to by law.
Debit cards
Debit cards are a slightly different case. Anyone who paid with a Visa Debit card should be covered under the same terms as described above. Maestro, on the other hand, is generally not covered (although this may vary from bank to bank).
A fuller discussion of this is available on this forum post
Maybe, depending on who you are insured by. I will compile a list here when there is more information.
In the meantime, your best bet is to check out this thread.