Last week I was emailed by a SavvyWoman user, Lucy, about a problem she and her husband were having with their local branch of a well known retailer. Shortly after Christmas, Lucy's husband bought a Wii console and accessories set; at least he thought he had. The problem was that when they opened the box, the accessories weren't there.
Needless to say they headed straight back to the shop, only to be told by the retailer's head of security that it was impossible for the Wii to have been sold without the accessories. According to him, the boxed set must have contained everything it was supposed to. He was so sure that he implied Lucy's husband was lying if he said anything else.
Hmm.. accusing your customers of lying as an opening gambit. What would Mary Portas have to say? Lucy and her husband decided to get in touch with their local Trading Standards who told them they were in the right and the onus was on the shop to prove the boxed set had all the items in it, not for Lucy and her husband to prove they didn't.
Funnily enough this didn't appear to cut much ice with the retailer. It was only after I got in touch that the retailer contacted the couple and offered to replace the missing items. It's not that much of a surprise, but it is a bit of a disappointment (to say the least) that only the prospect of media exposure seems able to bring about such a speedy change of heart.
Sure, sometimes there are complicated cases where the judgement may be fine as to who's in the right and who's not and I'm equally sure there are customers who are never happy, no matter what the shop does. But in this case - and many others like it - it must have been obvious from the outset that it was at least possible that all was not as it should be.
What's more, the law was clearly on the couples' side. And even if you did think it was unlikely that the Wii set had been sold without the accessories, isn't that something you should keep to yourself until you were absolutely sure?
Even before the advent of social media, a disgruntled customer could spread the word - good or bad - to dozens of prospective customers. Now they can do so to hundreds, thousands or even millions of others. Maybe this particular retailer doesn't value repeat business. It does make you wonder.
Wednesday, 19 January 2011
Tuesday, 4 January 2011
Savings compensation limit goes up.
With interest rates so low it's not very often that savers get good news but the increase in the savings compensation scheme limits from £50,000 to £85,000 from December 31st is to be welcomed.
This means that if a bank or building society goes bust in most cases savers will be eligible for up to £85,000 in compensation from the Financial Services Compensation Scheme (and up to £170,000 is protected if it's held in a joint account). I say 'in most cases' because there are some non UK banks that are members of their own country's compensation scheme which may pay slightly different amounts.
Not only is the compensation limit rising but there are other improvements as well. Payouts will be faster with many receiving compensation within seven working days. Those who can't be compensated within seven days will get their money within 20 days.
And if you have both a mortgage (or other debt) and savings with the same bank or building society and it fails, you'll now recieve your savings compensation in full. Previously the amount you owed would have been deducted from your savings first. It wasn't exactly fair - it's not likely you'd have been planning to pay off your mortgage in one fell swoop - and it would have undoubtedly been a bit of a shock for those savers who were also borrowers.
So, with all that good news there has to be some bad news, right? There is. What hasn't been changed by the Financial Services Authority is the basis on which the compensation limits apply. So these new, higher limits don't necessarily mean you can have £85,000 in a bank or building society and be protected by the compensation scheme, they only mean that you can have up to £85,000 in a bank or group of banks depending on how they're authorised by the FSA.
So, to take an example, NatWest, which merged with RBS some time ago has its own banking licence, as does RBS. This means if you have savings with NatWest and RBS you're protected for up to £85,000 in each bank. However, Halifax, which merged with Bank of Scotland around a decade ago, share a banking licence. That means the £85,000 limit applies to savings in both the Halifax and the Bank of Scotland.
In fact, Bank of Scotland's authorisation also covers Birmingham Midshires, Saga, the AA and Intelligent Finance so your £85,000 limit would be split between accounts you had with any or all of these organisations.
And in another change, whereas savers with building societies that had merged in the last couple of years had dual protection (they could claim up to £50,000 from each building society), that has now been reduced. The new limit - post December 31st - is £85,000 spread between the building societies that have merged. Confused? You're not the only one.
The changes to the compensation scheme do mean that banks and building societies now have to tell customers how they are authorised and whether they are part of a larger group (worryingly until the start of this year it was information that could be pretty hard to come by) but I don't think that's good enough.
For savers to have confidence in the compensation scheme it needs to be easy to understand and easy to explain. At the moment - despite the recent improvements - our own savings compensation scheme is neither.
This means that if a bank or building society goes bust in most cases savers will be eligible for up to £85,000 in compensation from the Financial Services Compensation Scheme (and up to £170,000 is protected if it's held in a joint account). I say 'in most cases' because there are some non UK banks that are members of their own country's compensation scheme which may pay slightly different amounts.
Not only is the compensation limit rising but there are other improvements as well. Payouts will be faster with many receiving compensation within seven working days. Those who can't be compensated within seven days will get their money within 20 days.
And if you have both a mortgage (or other debt) and savings with the same bank or building society and it fails, you'll now recieve your savings compensation in full. Previously the amount you owed would have been deducted from your savings first. It wasn't exactly fair - it's not likely you'd have been planning to pay off your mortgage in one fell swoop - and it would have undoubtedly been a bit of a shock for those savers who were also borrowers.
So, with all that good news there has to be some bad news, right? There is. What hasn't been changed by the Financial Services Authority is the basis on which the compensation limits apply. So these new, higher limits don't necessarily mean you can have £85,000 in a bank or building society and be protected by the compensation scheme, they only mean that you can have up to £85,000 in a bank or group of banks depending on how they're authorised by the FSA.
So, to take an example, NatWest, which merged with RBS some time ago has its own banking licence, as does RBS. This means if you have savings with NatWest and RBS you're protected for up to £85,000 in each bank. However, Halifax, which merged with Bank of Scotland around a decade ago, share a banking licence. That means the £85,000 limit applies to savings in both the Halifax and the Bank of Scotland.
In fact, Bank of Scotland's authorisation also covers Birmingham Midshires, Saga, the AA and Intelligent Finance so your £85,000 limit would be split between accounts you had with any or all of these organisations.
And in another change, whereas savers with building societies that had merged in the last couple of years had dual protection (they could claim up to £50,000 from each building society), that has now been reduced. The new limit - post December 31st - is £85,000 spread between the building societies that have merged. Confused? You're not the only one.
The changes to the compensation scheme do mean that banks and building societies now have to tell customers how they are authorised and whether they are part of a larger group (worryingly until the start of this year it was information that could be pretty hard to come by) but I don't think that's good enough.
For savers to have confidence in the compensation scheme it needs to be easy to understand and easy to explain. At the moment - despite the recent improvements - our own savings compensation scheme is neither.
Wednesday, 22 December 2010
Christmas deliveries....or lack of
The snow may be melting in some parts of the country but thousands of customers are still waiting for their online deliveries. The last couple of weeks have undoubtedly made life difficult for online retailers and delivery companies. But it seems that some of them aren't sticking by the law when it comes to consumer rights. Worse still, a number of them appear to think it's acceptable to fob off their customers when they try and find out what's going on.
I did an interview about online delivery problems on TV at the weekend and the programme received dozens of emails and texts from people who'd had problems. One was from a woman who'd ordered over £300 worth of jewellery from an online retailer. The order had gone missing and the jewellery retailer told her it wasn't their problem and that her only option was to claim against the postal service.
Well that's just plain wrong. I spent more time than is probably healthy reading the Distance Selling Regulations on Friday and Saturday but - although there's a lot of information there - it's all quite clear. If an order goes astry it's the retailer's responsibility to replace it or refund the cost (including delivery). And if you decide you no longer want the items you've ordered you can cancel your order at any time up to seven working days from the day after they arrive. There are some exceptions to this (you can't cancel an order if it's been customised or if it's for fresh food or flowers - all sensible stuff).
But even if consumers didn't have such good protection in law, why would the retailer think it's acceptable to tell someone who's spent £300 with them that it's not their problem? Don't they want any repeat business?
I do have some sympathy for some of the retailers that have been put in a very difficult position. In some cases their chosen delivery company has just withdrawn service and refused to deliver in certain areas. The rules of one postal service say that if a parcel goes astray the shop can't lodge a complaint to find out what's happened to it for 14 days.
I'm also aware that some consumers are probably being unreasonable. Does it really matter if some of the presents you've ordered don't arrive on time? Delivery companies aren't miracle workers and it's fair to say that if you can't travel much further than your doorstep it's unlikely they will be able to get anywhere near you. However, that doesn't mean that retailers should ignore what the law says. The rules are clear and they should abide by them and treat their customers fairly.
I did an interview about online delivery problems on TV at the weekend and the programme received dozens of emails and texts from people who'd had problems. One was from a woman who'd ordered over £300 worth of jewellery from an online retailer. The order had gone missing and the jewellery retailer told her it wasn't their problem and that her only option was to claim against the postal service.
Well that's just plain wrong. I spent more time than is probably healthy reading the Distance Selling Regulations on Friday and Saturday but - although there's a lot of information there - it's all quite clear. If an order goes astry it's the retailer's responsibility to replace it or refund the cost (including delivery). And if you decide you no longer want the items you've ordered you can cancel your order at any time up to seven working days from the day after they arrive. There are some exceptions to this (you can't cancel an order if it's been customised or if it's for fresh food or flowers - all sensible stuff).
But even if consumers didn't have such good protection in law, why would the retailer think it's acceptable to tell someone who's spent £300 with them that it's not their problem? Don't they want any repeat business?
I do have some sympathy for some of the retailers that have been put in a very difficult position. In some cases their chosen delivery company has just withdrawn service and refused to deliver in certain areas. The rules of one postal service say that if a parcel goes astray the shop can't lodge a complaint to find out what's happened to it for 14 days.
I'm also aware that some consumers are probably being unreasonable. Does it really matter if some of the presents you've ordered don't arrive on time? Delivery companies aren't miracle workers and it's fair to say that if you can't travel much further than your doorstep it's unlikely they will be able to get anywhere near you. However, that doesn't mean that retailers should ignore what the law says. The rules are clear and they should abide by them and treat their customers fairly.
Friday, 3 December 2010
It's time to simplify gas and electricity deals
The news that Consumer Focus wants OFGEM to investigate complex and confusing gas and electricity deals is to be welcomed. The number of different price tariffs available and the way some of the energy companies present their information does little to help most ordinary consumers get a good deal.
I've been interested in the way energy companies operate ever since the gas and electrcity market was deregulated in 1998. At the time I interviewed a marketing expert who warned about the dangers of confusion or complexity marketing - where companies design and market their deals in a way that will confuse customers.
Twelve years on and what's the evidence that the market is working for consumers? Well, the energy companies would point to the fact that millions of people benefit from cheaper deals as a result of being able to shop around. But many others don't engage in the process or switch without being convinced they'll be better off.
And OFGEM's own research in 2008 showed that over half of people who switched to a new deal did so on the doorstep (and 40% of those ended up on a worse tariff than the one they were originally on).
Consumer Focus's letter makes interesting reading. It includes examples of advertised discounts that are nigh on impossible for many consumers to qualify for, exit fees that customers don't realise they'll end up paying and a baffling array of deals that most ordinary mortals find impossible to compare.
No one's saying that companies should only be allowed to have one tariff or that they shouldn't compete against each other for customers. But gas and electricity are basic commodities - not luxuries - so is it really too much to ask that we can understand the information energy companies produce, work out whether we're on a good deal and, if not, get a better one?
I've been interested in the way energy companies operate ever since the gas and electrcity market was deregulated in 1998. At the time I interviewed a marketing expert who warned about the dangers of confusion or complexity marketing - where companies design and market their deals in a way that will confuse customers.
Twelve years on and what's the evidence that the market is working for consumers? Well, the energy companies would point to the fact that millions of people benefit from cheaper deals as a result of being able to shop around. But many others don't engage in the process or switch without being convinced they'll be better off.
And OFGEM's own research in 2008 showed that over half of people who switched to a new deal did so on the doorstep (and 40% of those ended up on a worse tariff than the one they were originally on).
Consumer Focus's letter makes interesting reading. It includes examples of advertised discounts that are nigh on impossible for many consumers to qualify for, exit fees that customers don't realise they'll end up paying and a baffling array of deals that most ordinary mortals find impossible to compare.
No one's saying that companies should only be allowed to have one tariff or that they shouldn't compete against each other for customers. But gas and electricity are basic commodities - not luxuries - so is it really too much to ask that we can understand the information energy companies produce, work out whether we're on a good deal and, if not, get a better one?
Tuesday, 26 October 2010
State pensions and women
Women have been second class citizens for some time when it comes to pensions. Those aren't my words (although I agree with the sentiment) it's what the Pensions Minister Steve Webb said last week at the House of Lords when he was speaking at the launch of a report about women and pensions.
If a flat rate basic state pension is introduced it will be a huge improvement for both men and women - but especially women - in the future. Last year only 45% of women who reached state pension age received the full basic state pension (currently worth £97.65 a week).
The fact is that even after changes introduced by the previous government in April it will be 2025 before 90% of women qualify for a full basic state pension. I know that there are means tested benefits such as the pension credit which top up pensions for those on the lowest incomes, but they're not really the answer.
Introducing a flat rate pension of around £140 a week - which is the figure the government is rumoured to be thinking of - is not without its problems. The main one is whether or not it's affordable but there are others as well, such as how do you 'sell' the idea of paying National Insurance if you don't get an obvious benefit from it?
As soon as you make changes there will always be winners and losers and while it's not a reason to leave things as they are, I do feel for women who are caught up in the current increase in the state pension age and who have had little or no time to prepare. Although the rise in state pension age from 60 to 65, which is currently being implemented, was announced some time ago it didn't get a huge amount of publicity. I know from feedback I've received to the website that many women were caught out by the fact that they wouldn't get their state pension at 60.
We may be able to understand - from a mathematical point of view - that the state pension age has to rise once again. It's one of the less welcome consequences of the 'good news' story of our increased longevity. What's harder to accept is that women born in the mid 1950s (after April 6th 1953) will have had their state pension age increased twice by successive governments.
And while £140 a week is definitely better than £97 a week and even better news if you have a patchy National Insurance record, it means some women - and men - will have to find £5,000 a year if they want to retire before they qualify for their state pension. If they can't find the money, they're likely to face the prospect of working later than they'd planned. Assuming - of course - they're able to find a job.
If a flat rate basic state pension is introduced it will be a huge improvement for both men and women - but especially women - in the future. Last year only 45% of women who reached state pension age received the full basic state pension (currently worth £97.65 a week).
The fact is that even after changes introduced by the previous government in April it will be 2025 before 90% of women qualify for a full basic state pension. I know that there are means tested benefits such as the pension credit which top up pensions for those on the lowest incomes, but they're not really the answer.
Introducing a flat rate pension of around £140 a week - which is the figure the government is rumoured to be thinking of - is not without its problems. The main one is whether or not it's affordable but there are others as well, such as how do you 'sell' the idea of paying National Insurance if you don't get an obvious benefit from it?
As soon as you make changes there will always be winners and losers and while it's not a reason to leave things as they are, I do feel for women who are caught up in the current increase in the state pension age and who have had little or no time to prepare. Although the rise in state pension age from 60 to 65, which is currently being implemented, was announced some time ago it didn't get a huge amount of publicity. I know from feedback I've received to the website that many women were caught out by the fact that they wouldn't get their state pension at 60.
We may be able to understand - from a mathematical point of view - that the state pension age has to rise once again. It's one of the less welcome consequences of the 'good news' story of our increased longevity. What's harder to accept is that women born in the mid 1950s (after April 6th 1953) will have had their state pension age increased twice by successive governments.
And while £140 a week is definitely better than £97 a week and even better news if you have a patchy National Insurance record, it means some women - and men - will have to find £5,000 a year if they want to retire before they qualify for their state pension. If they can't find the money, they're likely to face the prospect of working later than they'd planned. Assuming - of course - they're able to find a job.
Friday, 1 October 2010
Clampdown on debt management companies
The news that the Office of Fair Trading has decided to take action against debt management companies that have been flouting the law is very welcome and its findings were nothing short of shocking. Out of the 150 or so debt management companies it checked up on over 90% were flouting the law.
It wasn't just the case that they fell down on some minor administrative matter, they were giving people 'advice' when they hadn't found out the most basic information about their financial position, the firms weren't telling them how they were paid and - in some cases - were making out that the free alternative of debt advice charities weren't worth bothering with.
The debt management industry mushroomed a few years ago when companies realised they could push IVAs (individual voluntary arrangements), which would earn them a healthy fee of, sometimes, several thousand pounds a time. IVAs offer people who owe money the chance to have the majority of their debts written off, but they're not without risks and they're certainly not suitable for everyone.
I've always recommended that people who have debt problems go and see one of the debt advice charities such as CCCS, National Debtline or Citizens Advice. The debt management companies say there's a demand for their services because the debt advice charities can't cope with demand. That may well be the case as the number of people seeking debt advice over the last couple of years has risen sharply.
However, it's been obvious for several years that there's a massive problem in the industry with some companies aggressively pushing their services and - it now emerges - a distinct lack of openness about how they operate and widespread flouting of the law.
The action by the OFT is long overdue but - on the positive side - it pulled no punches. It's said that if 128 of the debt management companies it's looked at don't improve their practices in three months, they could be shut down. What the OFT must do now is to make sure it regulates this sector much more closely in the future. Allowing over 100 companies to have so little regard for the law when they are dealing with people who are often at their wits' end and desperate for help is something that must not be allowed to happen in the future.
It wasn't just the case that they fell down on some minor administrative matter, they were giving people 'advice' when they hadn't found out the most basic information about their financial position, the firms weren't telling them how they were paid and - in some cases - were making out that the free alternative of debt advice charities weren't worth bothering with.
The debt management industry mushroomed a few years ago when companies realised they could push IVAs (individual voluntary arrangements), which would earn them a healthy fee of, sometimes, several thousand pounds a time. IVAs offer people who owe money the chance to have the majority of their debts written off, but they're not without risks and they're certainly not suitable for everyone.
I've always recommended that people who have debt problems go and see one of the debt advice charities such as CCCS, National Debtline or Citizens Advice. The debt management companies say there's a demand for their services because the debt advice charities can't cope with demand. That may well be the case as the number of people seeking debt advice over the last couple of years has risen sharply.
However, it's been obvious for several years that there's a massive problem in the industry with some companies aggressively pushing their services and - it now emerges - a distinct lack of openness about how they operate and widespread flouting of the law.
The action by the OFT is long overdue but - on the positive side - it pulled no punches. It's said that if 128 of the debt management companies it's looked at don't improve their practices in three months, they could be shut down. What the OFT must do now is to make sure it regulates this sector much more closely in the future. Allowing over 100 companies to have so little regard for the law when they are dealing with people who are often at their wits' end and desperate for help is something that must not be allowed to happen in the future.
Saturday, 11 September 2010
Why can't shops get it right?
Why is it that some shops seem to know less about our rights than most consumers? I was in a bookshop last weekend when someone in the next queue complained about an e-book reader she'd bought a few months earlier. The shop assistant told her to contact the manufacturer - and this was after she'd checked with the manager.
The Office of Fair Trading has recently published information for retailers so they get it right and don't end up fobbing off consumers. In my view this can't come a moment too soon. OK so our consumer laws may not be the simplest in the world, but they're not rocket science.
And if you're a retailer, trader or supplier, it's down to you to get it right. A couple of years ago when I was still working as a freelance reporter for the BBC I did a report into the issue of shops giving people duff information about their rights and and pushing them to the manufacturer to get faulty goods replaced or repaired.
I interviewed several experts who thought that - while retailers may not be deliberately setting out to mislead - the fact that they didn't seem to think it was important that their shop staff knew the law and gave consumers the right information said something about their priorities.
The fact is that your contract is with the retailer or trader, so if you have a legitimate complaint, it's down to them to put it right. That's what the Sale of Goods Act is there for.
I hope that the OFT carries out some mystery shopping once the online advice hub has been up and running for a while and comes down hard on those retailers that are dodging their obligations.
The Office of Fair Trading has recently published information for retailers so they get it right and don't end up fobbing off consumers. In my view this can't come a moment too soon. OK so our consumer laws may not be the simplest in the world, but they're not rocket science.
And if you're a retailer, trader or supplier, it's down to you to get it right. A couple of years ago when I was still working as a freelance reporter for the BBC I did a report into the issue of shops giving people duff information about their rights and and pushing them to the manufacturer to get faulty goods replaced or repaired.
I interviewed several experts who thought that - while retailers may not be deliberately setting out to mislead - the fact that they didn't seem to think it was important that their shop staff knew the law and gave consumers the right information said something about their priorities.
The fact is that your contract is with the retailer or trader, so if you have a legitimate complaint, it's down to them to put it right. That's what the Sale of Goods Act is there for.
I hope that the OFT carries out some mystery shopping once the online advice hub has been up and running for a while and comes down hard on those retailers that are dodging their obligations.
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