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Tory MP accuses HMV of theft after it makes £100m-worth of vouchers worthless

"A gift voucher should be as good as a Bankers Draft."

A Tory MP has accused HMV of theft after it made an estimated £100m-worth of vouchers worthless.

After HMV slipped into administration this week it confirmed vouchers would not be accepted or sold.

The move angered customers who bought vouchers as Christmas gifts, with many accusing the chain of dishonesty in selling the vouchers late last year at a time when the writing was on the wall.

Now, senior Tory backbencher Sir Tony Baldry, MP for Banbury, has gone one step further and accused the embattled company of committing theft by selling vouchers when "there was little prospect of those vouchers or gift cards ever being redeemed".

"Directors and management must have known that the company was at very real risk of failure," he wrote in an open letter to the Department for Business, Innovation and Skills.

"I understand that HMV was selling Gift Cards and Vouchers all through Christmas and up until the day they went into administration," he said.

"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?"

Baldry, a barrister specialising in commercial law, continued: "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."

He added: "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."

It is estimated a whopping £100m has been lost in worthless HMV vouchers.

In December last year HMV bosses warned it may go out of business, yet it continued to sell vouchers.

HMV has defended its actions. A spokesman told The Guardian: "Until as late as early afternoon on Monday, the directors believed that they had a reasonable prospect of avoiding insolvency and were satisfied that they were complying with all of their legal obligations including in respect of gift cards. When it became clear to the board late on Monday afternoon that they had no option than to file for administration, they issued immediate instructions to all stores to stop selling gift cards."

Labour shadow minister for consumer affairs Ian Murray has written to HMV and administrator Deloitte to demand the companies disclose how much money the public has been lost in vouchers.

"It will strike consumers as unfair that whilst the company is still trading, they are unable to use gift cards and vouchers," he said. "I hope that HMV and its administrators will be able to reconsider their decision."

Deloitte has said if a buyer is found for HMV it may accept the vouchers, but has so far refused to reverse its decision.