Phones4U reneges on iPhone 6 refund pledge

Administrators to the bust mobile phone chain have said that they will not refund people who pre-ordered an iPhone 6 - despite earlier promises

Customers of defunct mobile phone chain Phones4U who pre-ordered a new iPhone 6 via the company will not get their money back, contrary to promises made when the company went into administration earlier this month.

The U-turn means that customers who pre-ordered the new iPhone 6 and iPhone 6 Plus following their launch on 9 September, will be left nursing losses of between £500 and £770.

While people who sought to acquire a new iPhone 6 from Phones4U using their credit card will be protected, those buying on debit cards or who paid cash upfront in-store will lose everything.

Phones4U emailed everyone affected and told them they should got get their money from the credit card company instead of through the company or its administrator. In what may be a sign of panic-induced rush on the firm's part, recipients of the email can clearly identify others in the same situation as they were all CC'd in by Phones4U.

Buyers who paid up-front or by debit card may also pursue a claim with the administrators, PricewaterhouseCoopers, one of the big-three accounting firms. However, the compensation they will receive after all the other creditors have been paid is likely to be negligible. These creditors include bond holders from issues by the private equity firm BC Partners which acquired the company for £700m in March 2011 - half the price originally paid by Providence Capital from which it purchased Phones4U.

The Phones4U bond issues enabled BC Partners to make a number of big dividend payments to itself, which means that the private equity firm will walk away from the wreckage with a substantial profit.

In January this year, BC was considering a £1bn public share offering in Phones4U, despite fighting a losing battle to keep mobile phone operators - its key suppliers - on board. Phones4U's directors called in the administrators when the last supplier, EE, decided to hang up on the ailing company.