Even legitimate companies can go bust, I am very wary when handing over money ahead of time.
Using a credit card gives protection for purchases under £25k but isn't always feasible.
The firm that supplied and erected the timber frame and insulation for my house wanted the best part of £100,000 at least 10 days before delivery. I asked what protection was in place for my money if they failed to fulfil, e.g. an escrow arrangement. The answer was "none" and the contracts manager was surprised and a little offended by my question and claimed nobody else had ever asked it.
I said I would have to do a financial appraisal of the company before agreeing to this, knowing they had already manufactured the frame. He looked gratifyingly alarmed. As it happens the company's balance sheet has plenty of cash on it (which I had already checked) and I did in fact make the advance payment but it was worth seeing his face.
The surprising thing to me is that they haven't been more or less forced to set up an escrow account, but it seems people generally go along with it even though many would find the loss life changing were it to go wrong.
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