MP accuses HMV of theft over gift card scandal

The Conservative MP for North Oxfordshire Tony Baldry has accused troubled retail HMV of theft.

The charges relate to the retailer’s continued sale of gift vouchers until the day it went into administration and then the subsequent decision by administrators Deloitte to block their use in store.

I suspect, like every Member of Parliament, I have a number of constituents who bought HMV Vouchers or Gift Cards as Christmas presents, who didn’t have the chance to exchange them before HMV went into administration,” he wrote in an open letter.

I understand that HMV was selling Gift Cards and Vouchers all through Christmas and up until the day they went into administration. That, of itself, must raise questions, in that way before they went into administration, directors and management must have known that the company was at very real risk of failure, and I think that of itself raises legitimate questions of, in those circumstances were the directors of HMV obtaining property by deception, i.e. offences against the Theft Act, in allowing their stores to continue to sell vouchers and gift cards, when they must have known that there was little prospect of those vouchers or gift cards ever being redeemed?

Under the strict letter of Insolvency Law, anyone who has a HMV gift card or voucher is a creditor of the company and now stands at the back of the queue, behind the banks, HMRC and others who have priority claims.

In theory, someone who possesses an unredeemed HMV gift card or voucher, could apply to the Administrators for a refund but the chances of success are tiny, given the firm’s debts of more than 170 million.

Clearly it is unfair, indeed, more than unfair, that consumers should be left out of pocket when a retailer refuses to honour gift vouchers, and I would hope that BIS and other Government Departments would be having a consideration of the rules on gift vouchers and insolvency to ensure that consumers are adequately protected in cases like this.

A gift voucher should be as good as a Bankers Draft, i.e. a consumer should know that they will either be able to redeem the gift voucher, or get their money back, and there is absolutely no reason why companies shouldn’t keep monies raised from gift cards or vouchers in a separate account.”

Yesterday MCV reported that Irish pensioner Eric Nolan took three games from an Irish HMV store after staff refused to accept the gist vouchers he purchased for his grandson for Christmas.

Note, too, that fellow retailer Blockbuster has chosen to continue accepting gift cards despite slipping into administration.