July 11, 2005
Some businesses come and go faster than you can say "bankruptcy." One local business just went under, taking their customer's money with them.
"Oh, this happens all the time," said Garrett Smith, a consumer attorney.
Small businesses like the Suntan Shoppe set up shop, and when they can't pay the bills anymore, they go bankrupt, leaving their customers who had year long tanning contracts stranded.
"It's a huge tanning business going on in Charlottesville, so not everyone's going to make it," said Brenda Hedgeman.
Brenda Hedgeman, the manager of All Around Tan, took on the Suntan Shoppe's client book for free and she is honoring half the minutes customers pre-paid for.
"It's something that we wanted to do to help the customers out so that they wouldn't be at a complete loss," said Hedgeman.
The Suntan Shoppe's clients were lucky in this case, but experts said normally, small businesses fail a majority of the time and when they file for bankruptcy the customers are out of luck.
"If they're in bankruptcy it's probably too late for most consumers to get relief," said Smith.
Smith said customers can file a claim with the bankruptcy proceedings, but the question is, will there be enough money from the owners assets to pay the customers back? Therefore, Smith recommends consumers do their research before handing over any cash.
"It's probably always unwise to pay a lot of money upfront for services to be provided in the future. You may want to have a conversation with the owner of the business because typically that's the person that you're banking on," said Smith.
Experts say the best way to research a business is to speak with the Better Business Bureau.