
Should deposit protection be mandatory?
Consumer Moe Alizadeh is calling for stricter regulations across the KBB retail sector after losing £26,000 on a kitchen project when his chosen retailer ceased trading – should the provision of deposit protection be mandatory as he suggests?
Questions over industry standards, regulations and professionalism are nothing new. Arguments over the fact that the KBB industry is largely unregulated have raged for years but could one consumer’s bad experience finally help bring about change?
Despite doing his research, shopping around for quotes and following friends’ recommendations, businessman Moe Alizadeh lost £26,000 when the kitchen retailer he was working with on his design project went bust.
Although obviously distraught, rather than dwelling on the situation, he wants to turn his bad experience into a positive by raising awareness of his own plight in a bid to bring about change across the KBB industry.
“My issue with the KBB industry is that there appears to be zero checks or mandatory regulations in place,” Alizadeh says. “What is stopping independent businesses opening, taking deposits for goods that are never ordered and then vanishing into thin air with honest paying customers’ monies?
“I’m not voicing my experience for personal gain – I’m one of the lucky ones, despite the significant loss I could afford to get another kitchen through a very good retailer. The purpose of this is to bring to light the issue that some retailers are tarnishing the reputation of the KBB industry. This cannot, and should not be allowed to, continue.”
Reputation

To gain and maintain a good reputation, industries need defined standards, especially those as complicated as the KBB sector. While there are clearly standards in place for certain areas of the home improvement sector, there are little to no barriers to entry, meaning that, literally, anyone could open a kitchen, bedroom or bathroom retail operation tomorrow.
When retailers collapse without the back up of a deposit protection, they not only leave devastated customers like Alizadeh, they tarnish the reputation of the entire industry.
“Some of my fellow retailers seem to take delight in these kind of tales but I always see it as another arrow to the heart of the independent,” says Nathan Damarell, from KF Kitchens in Plymouth. “These stories push the consumer to the perceived safety of the larger nationals who are seen as more indestructible.
“If we, as an industry of independents, allow fellow retailers to guide consumers away from the safety of credit cards or the backing of a deposit protecting body, we will all continue to be tarnished by those who take customers’ money and fold.”
I always see these tales as another arrow to the heart of the independent
Nathan Damarell, KF KitchensIn a nutshell, deposit protection schemes safeguard the sum of money paid by a consumer to a retailer to secure a project. Although not mandatory, KBSA members have access to an insurance protection scheme called ConsumerCare Plus, for example.
So, is it time to seriously consider the introduction of a mandatory deposit scheme across the board to protect consumers and the future of the industry?
Richard Hibbert, KBSA national chair, thinks so: “Deposit protection has often caused a difference of opinion amongst retailers, but the time is coming when it will become the norm, like ATOL is for the holiday industry.
“Trustmark members have to supply payment protection, and this is the only government-backed scheme currently on the market. As Trustmark operators, all KBSA members get it as part of membership, if they comply with the conditions.
“It would be good for the industry, as a whole, if all independents were part of it and protected the deposits too.”
This isn’t about whether deposit protections exist in the KBB sector – of course they do – the issue is whether operating with one should be made mandatory for all retailers.
The consumer credit act
Section 75 of the Consumer Credit Act 1974 protects the amounts people pay for certain purchases made with a credit card, point-of-sale loan, or other finance:
Cost: The purchase must be between £100 and £30,000
Contract: The provider must have breached their contract or misrepresented something to the consumer
Payment: The payment must be made directly to the merchant
If Section 75 applies, the consumer may be able to claim back the value of the purchase from their credit provider. This includes the amount spent on the card, as well as any full losses or consequential expenses. Some examples of when Section 75 may apply include:
- The product or service is faulty
- The company goes into administration before the consumer receives the item
- The company doesn’t deliver what they promised
- The services weren’t carried out with reasonable care and skill
However, there are some things that Section 75 doesn’t cover, including:
- Multiple purchases under £100 that total more than £100
- Costs that the consumer didn’t have to pay
- Claims made through a third-party payment processor, such as PayPal
One industry that has seen a mandatory obligation is the property rental sector. Since 2007 all landlords in the UK have been required by law to hold their tenants’ deposits in an independent protection scheme. In stark contrast, anyone can become a KBB retailer and take significantly bigger lump sum deposits without any real checks.
Of course, even if they choose to work with a retailer that doesn’t offer deposit protection, consumers aren’t completely unprotected, at least not if they pay by credit card. Section 75 of the Consumer Credit act 1974 allows consumers to raise a claim against credit card purchases of up to £30,000 that are faulty or don’t meet expectations.
“While I’m an advocate for a mandatory scheme I think the debate needs to be focused on vulnerable customers who don’t get the risks,” says Damarell of KF Kitchens. “As well as less reputable or poorly financed retailers who are happy to put customers at risk. Quality independents suffer from them by proxy.”
Mandatory
As Richard Hibbert of the KBSA rightly points out, the subject of mandatory deposit schemes divides opinion amongst retailers. Many, like Nick Warrington, owner of Stuart J Warrington & Co in Macclesfield believe that schemes like these put independents at risk of exploitation by consumers.
“The test is how well the deposit scheme is administered and how hard it is for a retailer to get their payment if a buyer raises a dispute. Believe it or not, some customers think any snagging complaint, no matter the size or reasonableness, entitles them to withhold huge amounts of money!”
Others, like Emma Butt, managing partner of Aylesbury-based Adroit Bathrooms, argue that reputable retailers shouldn’t be forced to pay to offer a scheme just to make up for the shortfalls of other retailers.
“A deposit scheme sounds like just another hidden cost to the good retailers and installers out there,” she says. “The rogues will ignore it and customers who are not savvy enough will still fall for them. We don’t take credit cards, 10% deposit works for us and our customers.”
Though, as RFK Kitchens CEO Trevor Scott rightly points out, by offering consumers the safety net option of paying by credit card, aren’t retailers already effectively paying for a deposit protection system?
“The fees we pay to have a card facility are way above the average for most conventional retailers as the card service providers know we are a high ticket with some historic risk associations,” he says. “These high credit card fees are our deposit protection scheme so really, we’re already paying for it…”
Moe Alizadeh: My story, my words

I embarked on a kitchen project last June on behalf of my elderly parents. After shopping around and obtaining recommendations from friends, I eventually chose to work with a kitchen retailer based in north-west London.
At the initial consultation I was impressed by their sales pitch, the quality of the brands they could specify and what looked on the surface to be very impressive renders.
Initially, I was asked to pay the full amount up front so that the retailer could secure the furniture from the manufacturer. While I was not prepared to pay the full amount upfront, at this point, in the absence of hindsight, I still had no reason to be concerned so we came to an agreement on a payment structure.
We agreed that I would pay £13,000 up front, followed by the remaining £13,000 which was split over two subsequent payments.
I then went away on holiday, and it was only when building work started on the kitchen that alarm bells started to ring. The kitchen was part of an extension, and the builder highlighted some critical errors in the design.
The showroom telephone number was out of use and the owner of the business became impossible to get hold of.
What is stopping independent businesses opening, taking deposits for goods that are never ordered and then vanishing into thin air with honest paying customers’ monies?
Moe AlizadehThis is when I decided to look a bit deeper into the business. I read a Google review of the business that was horrific – this customer was accusing the business owner of being difficult to contact, taking money and not delivering the kitchen.
When I eventually did get to speak with the owner, I was still being assured that I would be getting the kitchen. So, I asked for a copy of the order confirmation – which is something I also believe should be mandatory – and, because it was so difficult to get hold of a copy, it made me believe there was something very off with the situation.
This is when I decided to contact the kitchen manufacturer’s head office in the UK. Subsequently, the retailer has been liquidated and I was obviously right to be suspicious.
Although this has been an extremely stressful and upsetting experience for me and my family, I am one of the luckier consumers. I’m £26,000 out of pocket, and while not an insignificant amount, I am privileged that I could afford to go ahead with the renovation work, and that I found a fantastic retailer to work with. Albeit, costing me a further £30,000.
Clearly at some point, the retailer in question was reliable, I was just caught at the wrong end of things.
My issue with the KBB industry is that there appears to be zero checks and measures in place to protect consumers and prevent anyone opening up an independent business, taking deposits for goods that never appear and then vanishing into thin air with honest paying customers’ monies.
I want to raise awareness that this is happening with a view to waking up the industry to the necessity of introducing regulations like mandatory deposit protection, in order to protect other consumers as well as the industry’s reputation.