Not surprising when it turns out that Phonebox Direct were offering cashback of up to £420 on certain Voda contracts.
Unfortunately the demand for the cashback was underestimated, and the money ran out.
The joint administrators; Philip Lyon and Steve Wood of Mazars LLP posted a message on the company website: "Phone Box had been actively marketing via the internet mobile telephones which offered cash-back incentives to customers, providing certain conditions were met by those customers.
Unfortunately the number of customers that were able to comply with the terms and conditions and hence became eligible for the cash-back payments exceeded the company’s expectations. The company is therefore no longer in a position to meet its ongoing liabilities to those customers.
It had been hoped that negotiations with the supplier of the telephones and the networks involved would have enabled a “rescue package” to be implemented to assist those customers affected.
Unfortunately it has not been possible to achieve that objective within the timescale available to the company.
The company has insufficient money available to enable payments to be made to employees and therefore it will no longer be able to answer any individual telephone enquiries. In addition, it follows of course, that email communications will remain unanswered. "
There have been calls from all corners of the industry and MPs demanding that Cashback be outlawed, with the IMPDA suggesting gifts instead of cash:
"We are suggesting both to Networks, distributors and to dealers that they stop cash back deals and instead provide consumers with other gifts of perceived value such as CD players, Bluetooth headsets, TV’s or other goods, which can be used as an incentive but without the sometimes very complicated terms and conditions they impose until the consumer can claim their money." said the IMPDA.
Initial investigations by the administrators show that the liabilities may be between £4-£10 million. Customers shouldn’t expect their money back as there will be no possibility that the company will be able to make any meaningful payment to any creditor, whether consumer or supplier.
Regarding ongoing network contracts, customers are encouraged to contact their network supplier direct, to take legal advice or contact the local Citizens Advice Bureau or Trading Standards Office.