Ise Ceased Trading

[Whitegoodshelp (Andy)]

I've just discovered today that ISE have sadly ceased trading.

[Winston]

Hi, I don't believe it. Yesterday my £1000 Ise10 washing machine leaked all over our new wooden floor. We bought the machine in March this year and also bought the tumble dryer

[Whitegoodshelp (Andy)]

I've seen much bigger manufacturers (eg Servis) go bust before and it's never good news for customers. There's a possibility someone will buy them out and keep them going but it's probably unlikely to be honest. I have an article here which may offer some help What if the retailer goes bust? It's written about retailers going bust after we had a spate of them around 2008, but it links to information from consumer groups which may contain relevant information. One thing is, if you paid by credit card there may be some redress with them but it may only cover certain things and within certain time limits so read the article and the linked information carefully.

[Whitegoodshelp (Andy)]

Also, the ISE10 is a very good quality machine so it may not need much work on it. There's also the possibility the leak is not even from the machine as leaks from hoses at the back or the plumbing where it pumps out can be to blame for leaks. If I was the retailer who sold it I'd at least offer to come out and see what I could do, it could be something very minor. However, the retailer is also in a bad place here - it's no more his fault than the customers

[sambartle]

Hi, I don't believe it. Yesterday my £1000 Ise10 washing machine leaked all over our new wooden floor. We bought the machine in March this year and also bought the tumble dryer I have just phoned our repair agent and he has just informed me that Ise have ceased trading and I will have to pay close to £100 for a call out. My hubby is going to go nuts. Any advice re the next step? The water has come from underneath the machine. Nothing to do with loose hoses etc

You should be OK as long as you bought it someplace that's not ISE themselves. The retailer will have to pick up the tab on that under the sale of good acts as its definitely not beyond a reasonable period. You could argue that a 10 year warranty implies that they expect it to last 10 years.

It certainly should last 10 months though so as your contract is with the retailer you need to go back to them.

If they offer a refund though it might be wise to take it under the circumstances.

[Whitegoodshelp (Andy)]

I can't imagine anyone being offered their money back to be honest. The guys that sold these are sole traders or very small independents, many who struggle just to make ends meet.

Clearly this has nothing at all to do with the retailers. It's not their fault. However, if there is any obligation under UK consumer law there will be nothing they could do about that. If the manufacturer has ceased trading and the extra guarantees with the machines were provided by the manufacturer then it may well be that the guarantees have literally died with the company. I am double checking, but I would be surprised if retailers have liability to do with the guarantee.

They may have some liability under the sale of goods act. Though again this would seem extremely harsh. If they do have liability this could be very financially damaging for small retailer who has done absolutely nothing wrong. The extent of any liability could potentially be around the fact that an appliance may not have lasted a reasonable time if it can no longer be repaired. If this is the case people may be entitled to some compensation which would be pro rata depending on how much use they have already had from the appliance.

Of course customers have done nothing wrong either, and their primary concern is going to be how this affects them. Some of them may be so angry they are not remotely concerned about the retailers. At the end of the day this is all going to pan out according to consumer law. I will post back if I find out anything different.

Manufacturers have gone bust before. The British appliance manufacturer Servis have gone bust at least twice to my knowledge. And two or three other relatively well-known manufacturers have previously gone bust. However, the difference here is that as far as I know they all got bought out by rivals and the brand continued. What I am unsure about is whether when the brand was bought out the previous liabilities for repairs and guarantees were ever honoured. I believe any buyer would not be liable and only likely to entertain any redress out of goodwill.

[sambartle]

Yeah I agree entirely, but within the first year they (the retailer) will definitely end up being responsible as under SoG the contract the customer has is between him/her and the retailer. . If the user in question bought the machine in March of this year its only 8 months old.. the retailer will end up bearing the cost of repair/replacement, especially since they cant claim it back from the manufacturer.

One good thing is if they are a small independent they might stand a chance of fixing the machine using their own skills and labor, at a minimal cost and not needing to write off such a large amount.

Its very unfair.. but its something they would have been aware of when they chose to become a retailer and sell goods and I assume they may have some sort of insurance in place to cover this sort of failure of supplier.. They also would have a claim against their distributor/supplier assuming they didn't get the product direct from ISE I guess. (although im sure the SoG act doesnt cover that angle it may be contractually covered..perhaps)

[Whitegoodshelp (Andy)]

I used to sell appliances in the 90s. I was a Hoover and an Asko sales dealer. Back then we'd all virtually never heard of the sale of goods act. The way things have panned out now I would never sell anything again. The liabilities that retailers have can be far-reaching and spread out over many years. When I used to sell a brand-new washing machine we often used to just make £50. The idea that five or six years later that customer could come back to us and claim some sort of compensation would have definitely stopped me selling them.

I don't understand how a small retailer selling an appliance and possibly making £70 profit should be financially responsible if the manufacturer of that product goes bust. It seems so ridiculously unfair. As I say, I am seeking to clarify exactly what liability anyone has. These things don't happen very often so it's not really very common knowledge and there's a lot of confusion over what rights anyone actually has and who is actually liable.

[sambartle]

The actual legislation is here: http://www.legislation.gov.uk/ukpga/1979/54but its a boring and complex read..

Which do a good outline here: http://www.which.co.uk/consumer-rights/regulation/sale-of-goods-act

The relevant sections:

"Your rights are against the retailer – the company that sold you the product – not the manufacturer, and so you must make any claim against the retailer."

"Getting faulty goods replaced or repaired

You have the right to get faulty goods replaced or repaired if it's too late to reject them. You can ask the retailer to do either, but they can normally choose to do whatever would be cheapest.

Under the Sale of Goods Act, the retailer must either repair or replace faulty goods 'within a reasonable time but without causing significant inconvenience'.

If the seller doesn't do this, you're entitled to claim either:

• a reduction on the purchase price, or
• your money back, minus an amount for the usage you've had of the goods (called recision)

If the retailer refuses to repair the goods, and they won't replace them either, you may have the right to arrange for someone else to repair your item, and then claim compensation from the retailer for the cost of doing this.

You have six years to take a claim to court for faulty goods in England, Wales and Northern Ireland; in Scotland you have five years."

[sambartle]

The person requesting help will need to go to the retailer and be nice though, as after 6 month you have to prove it was a fault and not reasonable wear and tear, now thats going to be easy as at those prices its reasonable to expect it to last longer than 8 months (unless you have installed it wrong or been using it incorrectly), but you may need to pay for an independent expert to come and take a look (paying the call out fee for a repair man will probably be enough), and provide a report stating why they feel its not your fault.

You may then end up having to go to court to get the retailer to sort it out.. which again is unfair (but they should factor this possibility into prices as its how the law has worked for years), and I assume you can then claim the costs back.. Its in their interests to sort the problem out for you to save themselves that hassle.

In summary.. its easier to be nice to them and hope they offer to fix it. But instead of speaking to the repair agent.. you need to talk to the retailer for sure.

One of the good things about the Uk is we do actually have very good consumer protection.. (which yes is definitly not good for the small businesses it might hurt)

[Whitegoodshelp (Andy)]

I've written dozens of articles myself on consumer issues and rights including the ones listed below, but there is little information on what happens if a manufacturer goes bust and there's no spares available etc. It's no use trying to make the retailer responsible for repairs under warranty if the whole service side has collapsed and there are no spares. Virtually all the advice is about when manufacturers and retailers are both still trading and spares and technical info is available or for when the machine is relatively new.

Sale of Goods Act gives us 6 years to claim for faulty appliances?

Is manufacturer or retailer responsible for faulty appliances?

Buying appliances online: What if the retailer goes bust?

Buying faulty appliances with credit cards – protection

Is the sale of goods act too hard on retailers?

[Winston]

Hi, thank you for all your replies! We bought both machines from UK White Goods. We spoke to someone from there yesterday and they complained about the cost of the engineer, although have not offered to pay! We tried to get the filter out ( on the advice of the engineer) just to check there was nothing stuck in there. However, the handle came off and we couldn't get the filter out. The Uk white Goods man said we would have to smash the filter to get it out but we have been told by the engineer that there is a shortage in parts! The White Goods man also said he was convinced that the leak has been caused by something stuck in the filter and if this is the case it will render our warranty null and void?

We have the engineer coming out on Monday and as one of you have suggested, we will ask the engineer to do a report.

This is the email reply my husband got from UK White Goods:

Sadly ISE is currently not trading and is likely (we hope) to be bought over by another company in the not too distant future but, that is unlikely to be fully complete by the end of the year and more likely to be at some point in the first half of 2015. Quite what will happen from that point forward we do not know at this time.

ISE currently have no manned administration at all as it has in effect ceased trading for the time being which leaves us, along with owners, with no route to service or spare parts presently until things are hopefully sorted out. This is of course of little comfort or use in the interim and we do realise this.

With an appliance, much like a car or virtually any other goods, if it is returned after a period of time there is depreciation (which is particularly severe for appliances), the loss of the VAT element and also what is known as rescission or, the use of the product. Practically what this means is that a full refund is not possible although we can certainly look at some form of repayment if you wish us to do so when the item is returned.

If you wish, you can opt to have the machine delivered back to us and we will review the situation at that point for you.

We are very sorry but we, like you are in a position whereby there is very little good news in the current circumstances and we also have no way to seek to claim back any costs incurred.

Can you tell us what the problem is though as we may be able to help or advise on solving any minor issues without involving anyone?

[Whitegoodshelp (Andy)]

Hello Winston. If you can't get the pump filter out it's possible there could be something jamming it from the inside. Things like bra wires and other obstructions can get inside the filter and prevent it from being turned. I mention briefly how to get round this problem in my article here Pump Filter. Obviously any fault caused by an obstruction would not be covered under warranty.

Normally with a washing machine claim for not lasting a reasonable time under the sale of goods act they will take into account the amount of use a customer has already had. In other words, even if entitled to refund you can't get a full refund if you've used it for a year. In the case of a washing machine that is say four years old then the four years of use would be knocked off any compensation. Sadly, as the average age of most washing machines is supposedly as little as seven years it could be argued that in the case of a four year old washing machine it has already lasted over half its expected life. I presume they would knock off any VAT that was paid, because again presumably we cannot get VAT back because that was paid to the government. It could be that on a four year old washing machine deemed to have lasted over half its life, with the VAT taken off might only be worth a small fraction of what was paid. - and there we have the kind of depreciating value that is talked about in the reply. However, the £1000 plus ISE 10s were sold as designed to last 20 years...

[Winston]

Hello,

Thought I should do an update. A great engineer came out and managed to find the problem. Two (missing) front door keys were caught in the filter. Engineer managed to get to the filter from the back of the machine, without smashing the filter which would not undo from the front. Lesson learned...double check husbands jean pockets before putting in machine. Engineer a bit puzzled as to how we had such a flood? Anyway, thank you for all your comments. Machine will be treated with extra love and care in light of current situation.

[Whitegoodshelp (Andy)]

Thanks for the update and great to see it's good news. That's what I suggest in my article, you have to take the sump hose off to get to it. There are many faults that aren't covered by the extended guarantee so combined with the higher quality of the ISE10 range most people shouldn't have too much trouble. All extended manufacturer's guarantees are worth a lot less than people imagine but give great peace of mind. They only cover failure of parts due to manufacturing defects, and such failings are rare out of the 12 month period - especially with a quality product. They never cover anything that just wears or breaks through use, or of course things like obstructions

[Ajsdoc]

All perhaps seems not above board here.

There were many assurances that the warranty was either insurance backed or an escrow fund was protected in the event of the company going bust.

It now has and I'm unsure if either of these assurances remain.

People's money funded these promises at purchase, people felt the warranty was watertight.

Where are the protected funds, where is the insurance backed warranty.

Odd.

[Demise]

In reply to ajsdoc, I repeat here what I have already posted on the ukwhitegoods site, but on a page several back from his own contributions there - so he may not have seen it. Other owners of ISE washing machines may also find the information of use, should their machine at some stage require a call on the 10 year warranty.

The ISE Appliances website used to (but no longer) include reference to its 'provision funds'. From the wording given (shown below) I understood that these funds were held in place outwith ISE itself specifically in order to give potential and existing customers assurance that in the case of difficulties with ISE itself (as has now transpired - ceased trading) the 'provision funds' would ensure that the warranty would continue to be honoured for its full term. I found the wording on ISE's page unambiguous - but it seems that I was mistaken. Here is what I wrote:

When in July 2014 Mr Watt suddenly cancelled the 10-year warranty on my W288 eco (bought new in Nov 2012 from a Glasgow retailer) on the grounds that this carefully selected dealer hadn't passed on to him my payment, I queried the warranty cover with the fund provider named on the iseappliances website. I cited the relevant website paragraph:

'Our provision funds are lodged with Sterling Assurance who are a trading name of Zurich Assurance (company number 02395416) and is fully regulated and authorised by the FSA. Our fund is account number W523411 and the money for the provision of the 10 year guarantee on all ISE applicances purchased since launch is held in that fund'.

On 6th August 2014 Sterling replied to me:

Sterling Assurance and Sterling ISA Managers have no knowledge of, or involvement in, the provision of any warranties whether relating to domestic appliances or otherwise. We are not an ‘insurance’ company, we are an ‘assurance’ company – the difference being that we offer an element of life cover with some of our investments, and we do not offer cover for material items. . . .I can completely understand that as our company name has been made available on the ISE Appliances website linked to their warranty, you may feel this infers we have a responsibility in this respect. However until you made us aware of the information ISE Appliances have placed in the public domain on their website, we were completely unaware of the situation.

--- So, from my reading of this reply it would appear that there never was a repair warranty covered by Sterling. Or, at the least, Sterling was unaware that the funds accumulated in account number W523411 were intended by ISE for repair warranty cover. ISE may have intended the funds to support warranty claims, but if so this was without Sterling's knowledge.

[Ajsdoc]

Thank you.

Yes my understanding was there were 2 clear different warranty provisions in place, or at least advertised.

First (and this involved my machine, purchased 2010) was an insurance based warranty with the risk underwritten by an insurance policy. My belief from reading the website and from questions posed was that this warranty would provide a full 10 year cover even if ISE was to be wound up as it seems is now transpiring. My current understanding is that this will not be the case. The explanation to date has been that the warranties were indeed bought however it was explained in the forum they require a trading entity (eg ISE) to organise and process and so we are told therefore it is now useless! We seem to be told there is therefore no warranty. I've not really managed to get a full answer as to the name of the current or previous insurance provider.

Second, a new warranty provision was subsequently marketed (as you describe above) with funds set aside to adequately cover current and future warranty liabilities. It was described as an Escrow type account. My understanding also was this was to be held separate from the company. I think the position now described is these funds are now "spent up". Obviously there was some intimation that Sterling was the third party Escrow holder, I can't verify this part. The ISE machine is touted as being very reliable, but I suppose the business could have made a significant error in machine failure rate which means it (seemingly woefully) underestimated the number of calls upon the warranty. This has been hinted at with complaints that customers made large amounts of spurious claims. This would not explain the insurance backed original warranty being unavailable, unless what was purchased also was woefully not up to purpose we felt was suggested. Again, at best a business decision that went wrong at that point.

I imagine we are not likely to gain much other than venting spleen. I'm keen to document what I understood and was lead to believe when I bought.

Some consolation is that some of the engineers on the site seem to feel parts provision may not be too much of an issue in the future and so hopefully if this machine is well built it may in future be repairable (albeit at our own cost). I appreciate you've had trouble with your machine, mine has actually been very good and I hope it continues to be so (it'll probably pack in tomorrow now!)

I'm galled on a couple of levels. Firstly, all obviously is quite opaque and I have concerns regarding the warranty. Moreover was the principle that ISE was founded on - help the independent trader, pay more than you usually would, parts would be provided at cost even out of warranty to enable sensible repairs this being good for the customer and the Trade. I loved the idea, bought into it, spent more than I usually would and the warranty promises seemed great. We now have machines that may or may not be no better ecologically, financially or in terms of longevity than a cheapo Indesit!

The least we can hope for is someone at least looks at parts provision, the idea that parts may not be sourced in the future I find gutting. I'd still try and have repairs made in future, even if at my cost (but paying will vex me!). I think I still believe it was a well specced, quality machine but clearly events such as this make you doubt even that.

Regards.

[Demise]

Since 23rd December 2014 the Home page of ISE Appliances has been rewritten, setting out several anticipated FAQs concerning the warranty and future repairs, and giving ISE's sad replies. The warranty/repair situation therefore remains unchanged.

It is interesting to note that "the warranty fund did exactly as it was intended . . . [was] always a finite resource . . . only in place from early 2011 until late 2012 . . . ".

ISE comes clean, too, about the [mis?]use of the warranty and the viability of its business: "[The warranty] has been used as we sought to finds a buyer or even someone to take ISE on as a goon concern . . ."

[Ajsdoc]

Yes. The issue of the warranty and what was bought ( if anything) seems very very unclear.

This idea that the insurance backed warranty cannot be claimed upon because ISE are needed to process claims and they are now bust seems crazy and makes me feel very much that the water tight warranty we bought was no such thing. To be honest, there's no way of knowing if any insurance backed cover for my machine was purchased by the company at any point.

Very disappointed by this outfit.

[Whitegoodshelp (Andy)]

As far as I can make out this is the main issue. If the warranty is protected and still able to be used it seems to have been made redundant by the fact that the company ISE is no longer trading. In almost every other case that I'm aware of where the manufacturer has ceased trading it has been taken over by another party and most of the infrastructure remains functional.

Unfortunately the ISE project is not one that has been attractive to buyers. It was very much a niche, almost maverick project which I amongst many others wanted to support. Sadly the reality is that nothing will ever change and it is impossible for a small group of people to change how appliances are made because it is such a massive international multibillion pound industry. There were many people, myself included, and many of their customers who really wanted this to work. Sadly, the people behind it have probably lost a lot of money, and a lot of sleep to say the least and tried their best to keep it going. I suppose it's understandable that they have just had to close it down. I suspect it may even be against certain rules to keep it going in any capacity once they have ceased trading. I don't think it's possible for a company to cease trading, or go bust, but then still trade in some small capacity even if they really wanted to try and help. I don't know this for sure, it's just my speculation.

[Ajsdoc]

Yes, and I understand that many involved must have suffered here.

My issue is the warranty seems not to have been what I thought and I doubt I'm the only one. It was never promised to disappear in a puff of smoke if they'went bust!

Putting this aside. The whole thing was longevity, now parts look difficult to obtain, other fora report previous independent engineers who dealt with ISE refusing to go out to them.

With no parts supply, a simple fault can seemingly make these robust, well built machines (designed and promised with longevity in mind) completely worthless and with a short lifespan.

I hope a parts supply is found at the very least.

I'd hate to scrap the machine for a simple fault that turns up in the future which cant be fixed due to lack if parts supply.

I've no real idea how many machines are out there to know whether supplying parts would be viable. Even ukwhitegoods, run by one of the ISE directors, can not guarantee parts supply at the moment. There could be tens of machines or tens of thousands, who knows!

I hope mine keeps on, but even a simple fault may make it scrap one day I suppose....

[Whitegoodshelp (Andy)]

Yes, I find it hard to believe that no one will be able to get spares. The major reason the ISE brand was created was so that independent engineers had appliances out there that they could repair and maintain. The ISE brand are not unique appliances created only for ISE, they were created using standard parts used by Beko or Asko. Any spares company should be able to get them. I will definitely keep an eye out for any developments and post here if they become available.

[theboss]

However, the handle came off and we couldn't get the filter out. The Uk white Goods man said we would have to smash the filter to get it out but we have been told by the engineer that there is a shortage in parts!

Any chance you can advise on how the filter was removed - I'm having exactly the same problem with an ISE 1607W bought barely two years ago. The plastic filter handle seems to have sheered off so the filter can't be removed. Its been the most problematic appliance I've ever owned and I'm inclined to write it off now with news of ISE's demise, but it seems daft to scrap the machine for the sake of a stuck filter.

[Whitegoodshelp (Andy)]

Hi, I answered that point under the post you quote.