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Posts tagged Consumer affairs
Phishing emails from ‘Amazon’ are well out of order
Mar 14th
Fraudsters are targeting Amazon customers with emails telling them to check their account details
Customers of the online bookseller Amazon are being warned to be wary of a fake “phishing” email asking them to check their accounts.
These emails, addressed “Dear Customer”, say: “Your order has been successfully canceled [sic]. For your reference, here’s a summary of your order.” They then give an order number and a link to “order information”, which appears to take users to an external website that does not belong to Amazon. The emails have a link to the genuine Amazon.com website at the bottom, making them appear authentic.
“From time to time, customers may receive emails appearing to come from Amazon, which are actually false emails, or ‘phishing emails’,” said a spokeswoman for Amazon. “These can look similar to real Amazon emails but often direct the recipient to a false website, where they might be asked to provide account information such as their email address and password combination.”
She advises customers to send any such emails to spoofing@amazon.com and only check their order status by logging directly into their account from amazon.co.uk.
This particular spoof is one of a growing number of fake emails landing in people’s inboxes, as the global wave of phishing attacks grows. Phishing is the criminally fraudulent process of trying to illicit sensitive information such as usernames, passwords and credit card details from website users, usually via emails that look as though they genuinely come from a bank or an online retailer.
Last week the industry body UK Cards Association announced that the number of phishing attacks on bank customers had risen to 51,000 from just 1,700 five years ago. As a result of this and other methods of internet banking fraud, online banking losses totalled almost £60m in 2009 compared with £52.5m in 2008 and £23.2m in 2005. It is the only area of card fraud that has increased rather than fallen in the past year.
“Banks would never approach customers by email asking for their bank details, but people still fall for this scam,” says a spokesman for the association.
Phishing attacks have also plagued users of social networking website Twitter in the past few months. Criminals have been attempting to trick Twitter users into giving away their username and password via messages that apparently come from friends. The messages contain a link to a spoof website that looks just like the Twitter home page, where users are then prompted to enter their login details. Security experts have expressed concern that this information could then be used to gain remote access to Twitter users’ computers.
Last week the website introduced an anti-phishing service designed to protect its users from these types of attacks.
UK banking customers can see examples of recent phishing emails in a gallery, sorted by bank, on the industry’s Bank Safe Online website.
Protect yourself
• Make sure your computer has up-to-date anti-virus software and a firewall installed. Consider using anti-spyware software.
• Ensure your browser is set to the highest level of security notification and monitoring.
• Apply common sense. Your bank would never contact you to ask you to disclose your Pin or other sensitive details by email. Delete such emails and make your bank aware of what you have been sent.
• Always access online accounts by typing the bank or retailer’s address into your web browser. Never go to a website from a link in an email and then enter personal details.
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Time to hang up on 3’s mobile phone policy?
Mar 13th
Insurance wouldn’t cover my broken mobile because I reported it ‘too late’
In June last year I was persuaded to take out mobile phone insurance on a new Nokia N95 by a saleswoman in a 3 store. I have since been paying £6.99 a month.
I dropped my handbag, and my phone fell out on to a tiled floor, cracking the screen. I was going away on holiday and, on my return, claimed from Lifestyle Services Group, which manages the insurance on 3’s behalf. My claim was declined because I hadn’t reported it within 48 hours.
This might have been in the small print, but I cannot see how this has any bearing on the veracity of a claim. As far I can see, it is only designed to enable them to refuse paying out on as many claims as possible. JH, Plymouth
Guardian Money has long warned that mobile phone insurance is a waste of money, because policies are riddled with get-out clauses, and rarely pay out – as your case demonstrates. We asked 3 about your claim, and it immediately agreed it should have been handled differently. The 48-hour rule should only apply if the phone was stolen, to prevent the thief running up a big phone bill – not an issue in your case. After getting nowhere with 3, you bought a replacement handset on eBay.
The companies have now had a rethink, and have agreed to pay £230 for the phone and to waive the excess as a gesture of goodwill, which is much more like it. Also, 3 says it will be taking this issue up with its insurers and retail team to make sure it is better interpreted in the future.
Can we help? If you’ve got a problem you would like us to investigate you can contact us by emailing consumer.champions@guardian.co.uk or writing to Bachelor & Brignall, Money, The Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number.
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RAC car cover went into automatic
Mar 13th
I found cheaper roadside cover, but RAC took my premium and won’t give it back
I was recently sent a roadside cover renewal letter by the RAC which quoted a new premium of £228.
Thinking this was rather high, I rang the call centre and was eventually offered the same cover at £163.50, but decided this was still too much. After shopping around, I found similar cover for £100 and bought it. I have now discovered the RAC has taken the £228 via my debit card – even though I didn’t authorise it to do so. All my attempts to get my money back have failed. Please help! CT, Hove
The RAC says you were placed on an annual automatic renewal payment in 2009, which comes with a 14-day cooling-off period to allow you to cancel. The RAC admits mistakes were made when you called, and you weren’t made aware of this. However, since we got involved, it has moved super-fast to resolve it. It has now sent you a cheque for the £228, plus a further £50 to cover your costs and say sorry. It also says it will be taking stringent measures to ensure this problem is not repeated.
Can we help? If you’ve got a problem you would like us to investigate you can contact us by emailing consumer.champions@guardian.co.uk or writing to Bachelor & Brignall, Money, The Guardian, 90 York Way, London N1 9GU. Please include a daytime phone number.
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Letting agents’ hidden charges prompt calls for tougher legislation
Mar 13th
Admin fees, insurance fees, cleaning fees, fees for charging a fee … the list is endless, says Penny Anderson, author of the Rentergirl blog
The escalating fees charged seemingly at random by letting agents defy the laws of economics. I half suspect they make them up as they go along, daring each other to see what they can get away with.
Penalties are disguised as “admin fees” or “key money”. In fact, the names are as ingenious as the fees. I once heard of a tenant being charged a “finance fee”; that is, the agent had the audacity to charge clients a fee for charging them a fee.
Recently, when I was flat-hunting, I discovered admin fees ranged from £75 to £200. Then there’s an “inventory fee”, “insurance fee”, “checking-out fee” and a “cleaning fee”. Bear in mind the letting agent is likely to be charging the landlord a “finder fee”, plus a part of the rent, often 15%. Then they sting the tenant as well.
The agent letting the flat I was due to move into tried to charge me £150, claiming in mitigation: “We have to pay for our office costs.” In that case, surely, I should be able to invoice them for my own costs, as those removal vans don’t pay for themselves. (They agreed to reduce the fee to £100 as they wanted “to be reasonable”).
In order to amuse myself while sitting in the office signing my badly photocopied, legally dubious, rental agreement, I timed them. Producing the ready-copied documents and checking over my credit rating (which they seemed to do in front of me) took 10 minutes. Another two tenants were in the process of signing up (it appeared they were charged £100 each). That makes £300 for 10 minutes’ work. I wish I was paid that rate.
Now here’s the catch: the usual excuse for letting agents who charge fees is that they cover time spent checking references which, if true, might be reasonable. It’s just that I know, for a fact, that my (excellent, I’ll have you know) references were never checked, which means that if my landlord was also charged a fee, those arduous 10 minutes of pulling pre-printed forms from a file could have earned them roughly £500.
So here is the problem: I’m assertive and know my rights. But what choice do desperate renters have when faced with an agent who – as here – simply issues an implicit threat: words to the effect of “no fee means no flat”? Shelter chief executive Campbell Robb says it “is vital that tenants ask about fees or charges upfront as, unfortunately, once they get to the point of getting the keys it is very difficult to avoid paying”.
He agrees that even when tenants try to clarify the bill upfront, mystery monies still appear. “Many of Shelter’s clients point to ‘hidden’ charges when they are initiating or renewing a tenancy. Often people are unaware what these charges are for, and struggle to pay them on top of a deposit.”
Scotland tried to solve this with legislation. The 1988 Housing Act (Scotland) decrees no fees be charged to tenants, but agents have reacted by brazenly ignoring the law. Admittedly, there is a minority legal view that a small amount is justified, but just before signing my rental agreement I politely suggested the mooted charge may be, well, dodgy. My concerns were greeted with sniggers of disbelief.
But exactly what constitutes a reasonable amount? Keeping in mind the fact that an online credit check costs as little as £5, charging an individual tenant £150 seems extortionate. Ian Potter, operations manager of Arla, the Association of Residential Lettings Agents, had this to say: “Fees will vary from region to region and will depend on the specific services offered.
“However, for landlords and tenants, it is important to obtain clear, written information from an agent about which services the fee includes – and whether there are likely to be any further costs. Consumers should always ensure the agents they use are registered with Arla or the National Association of Estate Agents, as they will have to comply with strict codes of practice. This means that, should a landlord or tenant feel the fees were unclear, they can lodge a complaint.”
Housing charities have long argued letting agents need tighter regulation. Robb says: “Shelter believes letting agents need to be regulated, so they are more transparent and upfront about charges. We also believe most of these charges should be made to the landlord, not the tenant.”
Last month government plans for regulating the private rented sector were published. Housing minister John Healey pointed out more than 3 million families live in private rented housing and, while the majority of tenants say they are happy, many do face problems with their landlord, and should have better help and protection. He said creating “local letting agencies”, where councils and good landlords work together to help people find better-quality homes in the private rented sector, would help sideline the “cowboys”.
These proposals have no timeline, and there is no mention of sanctions for landlords or letting agents who disobey the new rules, or who fail to register, so I suspect the astronomical fees are with us for some time yet.
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Ticket inflation – the new rock ‘n’ roll
Mar 13th
Tickets for Lady Gaga’s forthcoming shows have gone on sale at twice the cost of her recent tour. Rupert Jones reports on the new CPI … Concert Price Inflation
We all know about the rising cost of living, with official figures last month revealing that consumer prices inflation (CPI) had leapt to 3.5%. But there is another CPI that seems to be shooting up much faster – concert price inflation.
Many long-time gig and festival-goers are paying significantly more than they were just a few years ago to see the same act, or attend the same event – and that’s even before the myriad fees and charges are added on.
Perhaps the most extreme example of gig ticket inflation is the cost of seeing Lady Gaga strutting her eccentric stuff. The triple Brit Award winner has just finished a string of UK arena shows, with tickets priced at between £27.50 and £35.
However, tickets for the extra dates in London, Manchester and Birmingham in May and June, which went on sale this week, carry a £50 to £75 price tag. That is despite the fact it is the same tour, visiting the same venues, just three months later. The star’s debut album is called The Fame, which might prompt some fans to ruefully recall that famous line in the eponymous 1980s TV series: “Fame costs. And right here’s where you start paying …”
But it’s not only Lady Gaga. Tickets went on sale this week for the Latitude Festival in Suffolk – a highlight of many a Guardian reader’s calendar, which will this year be headlined by Florence and the Machine, Belle and Sebastian, and Vampire Weekend. This is the fifth Latitude, taking place on 15-18 July, and weekend tickets have risen to £155, with day tickets rising to £65.
That compares with the £95 and £40 respectively that punters attending the first Latitude in 2006 paid – quite a hike in the space of four years.
However, while some fans on the festival’s forums were complaining, others seemed relatively relieved the cost had “only” risen by £5 since last year (weekend tickets were £150 in 2009, while day tickets were £60). Of course, the granddaddy of music festivals is Glastonbury, which, this year, takes place on 23-27 June and will see U2 make their debut appearance at the Somerset institution.
Tickets were quick to sell out, despite costing £185 each (plus £5 per ticket booking fee, and £4.95 postage and packing) – £10 more than last year, and £30 up on 2008.
In fact, Glasto tickets have more than doubled in price over the past decade; they cost £87 in 2000, when David Bowie was among the acts delivering storming sets. Turn the clock back 20 years to 1990 and you would have handed over £38 to see bands such as the Cure and Happy Mondays.
There are plenty of examples of what some would say are simply crazy prices:
• Aerosmith at the 02 Arena, London, on 15 June – £106 from Ticketmaster (£95 + £11 fees)
• Bon Jovi at the 02 Arena in June – £51.25 to £215 from Ticketmaster (face values £45-£200)
• Paul McCartney “Platinum Package” tickets for Hard Rock Calling in London’s Hyde Park on 27 June – £938.83 (yes, that’s not a misprint). Includes a champagne reception at Abbey Road Studios, three-course lunch, free bar (“excludes champagne”), VIP seating and other perks.
Standard McCartney tickets are available at £62.50 plus fees. When Bruce Springsteen headlined Hard Rock Calling last year, standard tickets cost a lot less – £45 plus fees. Some might wonder whether the price differential has anything to do with Springsteen tickets selling out in a matter of hours, and many then turning up for sale at much higher prices on resale sites such as Seatwave.
So it is perhaps no surprise to discover that these price rises are officially running ahead of inflation. The Office for National Statistics told Guardian Money that, while consumer prices as a whole were up 3.5% in the year to January, “cultural services”, which includes live music, cinema and theatre tickets, were up 5.6%.
For those who still want their festival fix, but can’t afford the high prices, the answer is probably to turn to one of the scores of smaller events popping up all over the country. According to website efestivals.co.uk, there are 491 festivals in the UK between this weekend and the end of the year, so there’s bound to be something for every taste.
Meanwhile, growing numbers of music fans have been giving the UK a miss altogether and packing their bags for warmer climes. Benicassim, Spain’s major festival, is an increasingly popular draw. This year it is on 15-18 July, and will feature appearances from the Prodigy, Kasabian and Vampire Weekend. A four-day ticket costs £160 and includes free camping between 12-20 July, so you can make a holiday out of it. The site, near Valencia, is just a stroll from the beach.
But good weather is far from guaranteed; last year, strong winds caused havoc, forcing Kings of Leon to cancel their headlining slot – which may be why the price was frozen this year.
Responding to the Lady Gaga controversy, promoter Live Nation insists the prices are “comparable and fair” adding: “What was a small arena/theatre production is now a massive, first-rate arena production. Ticket prices for the previous dates were set long before the current Monster Ball [tour] was developed.”
The Paparazzi singer’s new dates are Birmingham LG Arena on 28 May, London 02 on 30 May, and Manchester MEN Arena on 2 June. She played the same venues earlier this year.
Asked about the price hikes over the years, a spokesman for Glastonbury Festival spokesman told us: “Running a festival for 140,000 people in the middle of the countryside is inevitably expensive, and the costs of things like diesel fuel have risen substantially. We’re also always investing in improvements, such as £250,000 this year for a new drinking water reservoir.”
He added: “We offer fantastic value for a show you couldn’t find anywhere else – five days of fun, something like 2,000 performances across dozens of stages and venues, free programme, no hidden extras plus all the magic that Glastonbury offers – and we still manage to donate £2m a year to good causes.
“The fact that nearly all our tickets for 2010 were snapped up last October suggests our audience agrees.”
Another big cost a few years ago was a steel fence installed after a mass break-in in 2000 brought vast numbers of people on to the site.
How to avoid paying through the nose
Some music industry experts blame websites such as Seatwave and eBay for driving up concert ticket prices. They say promoters have seen how touts reap huge profits from selling on tickets at inflated prices, and want a slice of this extra cash that some people are clearly prepared to pay.
There have long been calls for a ban on the resale of gig tickets, which would effectively kill touting. But the government has never been keen, and last month it announced that, after years of looking into the issue, it has decided that the primary and secondary ticketing markets should continue to regulate themselves. “The government has decided to maintain its existing policy that regulation … must be a last resort,” it said in its report on the consultation.
If you want to see an act but the tickets are expensive, there is not a lot you can do. However, you stand a better chance of being first in line if you sign up for emails from companies such as promoter Live Nation, which offer pre-sales and other offers.
Meanwhile, websites selling fraudulent tickets have been a big problem in recent years.
Consumer Direct suggests some things to look out for:
• Is the site making claims that sound too good to be true? Is it selling tickets to events that haven’t gone on sale yet?
• Check where the site is registered and who it is registered to. You can do this on Whois-Search.com.
• Always check for feedback, both positive and negative. Enter the website name into a search engine.
• Where is its office? Companies must supply the full geographic address where their business is based, not just a PO box or mailbox number.
• How can you contact the company? Does it have a landline number in the UK? Does this work? Be wary if the site gives only an email address or mobile phone number.
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Credit card limits slashed
Mar 13th
Consumers with excellent credit histories are seeing their card limits slashed, often without warning. Miles Brignall reports
Are you one of the growing band of Britons to have mysteriously had their credit card limit cut in recent months? Despite signs the economy is improving, and with huge sums of money being pumped into the banking system, it appears credit card providers fearing a rise in bad debts have been slashing credit limits.
In recent weeks Guardian Money has had letters from readers complaining about limit cuts, in some cases for no apparent reason. Internet chatrooms are buzzing with similar complaints.
The problem now appears to be increasingly affecting customers with excellent credit histories.
Traditionally, it has been the financially wayward who have seen their limits unilaterally lowered.
Citi is one of the latest card providers to upset some customers in this way. Last year Citi said it was going to withdraw its popular Shell MasterCard, which offered discounts on petrol purchases. However it has recently issued replacement cards with, in some cases, significantly reduced credit limits and higher interest charges.
Some other cardholders claimed they didn’t know their limit had been lowered until a payment was refused.
Jan Johnson, who lives in Harrogate, North Yorkshire, contacted us after Santander wrote to say that it was reducing the limit on her Asda credit card from £5,000 to £300. The teacher, who regularly spends around £1,500 a month on the card, always paying in full each month, has repeatedly asked Santander why it picked on her but, in spite of a lengthy correspondence, has failed to get a straight answer.
“I’ve had the card for eight years without a problem. I phoned to ask what was going on and they suggested I check my credit rating. When it came back as being in the “excellent” category – 999 out of 1,000 – I wrote back pointing this out, and was then told their decision was based on either a change in employment, a change in personal circumstances or credit rating, or a change in payments. None of these applied to me, so I wrote again. Finally, they said they could do what they wanted under the terms and conditions of the card.”
Like many others in the same situation, she has taken out a card from a different provider.
“A card with a £300 limit is a waste of time. It’s up to Santander how they run their company, but to remove virtually all of a customer of eight years’ credit limit, and to not give an explanation, is a strange way to do business. Everyone I tell this story to is as intrigued as I am,” she says.
Steve Rosson, from Wythall, near Birmingham, is another reader affected by this problem, albeit in a different way. He has taken out another card after Barclaycard cut his limit from £10,750 to a “paltry” £750.
In his case, the first the retired teacher knew of it was when his wife had a payment refused in a store. Only when he queried it was he told his limit had been slashed.
“We must have been customers of Barclaycard for at least 20 years, if not longer. I pay off our balance in full every month, but was told because I had made two late payments – an oversight on my part – within 12 months it was reducing our limit by £10,000. The company only wrote to us after the card was refused, and my calls for more information have gone unanswered.” When he pointed out his excellent payment record over many years – the second of his missed payments was a day late, and neither was due to lack of funds – it had no effect.
“We are off to Australia soon and I needed to book air tickets, car hire etc. I understand they might want to cut my limit – I don’t need £10,000 – but a card with a £750 limit is useless.” Like Johnson and other correspondents, he doesn’t feel he has had an adequate response from the card provider.
On 13 February, Guardian Money carried a report about a 61-year-old retired teacher, a customer of NatWest for more than 40 years, whose limit was reduced from £4,500 to £300. That prompted a 61-year-old university lecturer to contact us to say the limits on their two Royal Bank of Scotland cards had been slashed from more than £6,000 to £360 and £350, despite having not missed any payments in the last few years.
And on 6 March, we carried a letter from a reader who had “an unexpected large reduction in my credit limit on one card which was quite unjustified by my usage”. He later discovered incorrect information on his credit file, and his limit was restored.
Banks tend to hide behind a blanket of secrecy when it comes to credit limits and credit scoring. The lack of transparency is a major source of frustration to those affected.
A look at financial websites tells a similar story to those of our readers. Moneysavingexpert.com’s forums have plenty of disgruntled cardholders, and suggest Virgin, Halifax and MBNA have been cutting limits.
Paul Lawler, a credit card specialist at Moneysupermarket.com, says banks could be trying to limit their exposure to bad debts. “There was a lot of this going on at the height of the credit crisis, and customers saw their limits cut. Card providers may be under pressure to limit their exposure and are acting accordingly.” He says that a card provider will often look to see what other lines of credit are available to a customer, and may be more inclined to cut limits if they spot someone has other options.
“Prior to the credit crunch, many consumers held several cards as a result of transferring balances, but didn’t close old accounts.
“Many lenders experienced problems because of this. As credit dried up, those consumers who were used to transferring balances between cards at 0% were forced to open lines of existing credit. A lot of bad debts were caused by this, and lenders have been tightening up as a result,” says Lawler.
A call to the various banks mentioned above elicited little to reveal why this is happening.
A Santander spokeswoman says: “As a responsible lender, we undertake ongoing reviews of customer credit limits using internal data and data provided by our credit reference agencies.
“On occasion, this can result in a customer’s credit limit being adjusted. Customers are free to contact us should they wish to discuss any changes made to their account.”
In Jan Johnson’s case, it says that a manual review should have led it to “reassess its decision”, and apologised for this not happening.
Barclaycard says it will cut a credit limit if its information shows the customer may be experiencing financial difficulty and their circumstances may have changed. “If this appears to be the case, then their credit limit may no longer be appropriate and needs to be readjusted. We always try and contact the customer as soon as a decision like this has been taken,” it adds.
Citi made similar points, saying: “Due to the way credit card lending works, other costs relating to fraud, bad debt and operations have to be taken into account. Customers’ interest rates are determined by a number of factors which include our costs, the cost of borrowing in the wholesale market and customer behaviour.”
Meanwhile, if you get such a letter, try not to take it personally. If you complain, don’t be surprised if you come up against a wall of silence. Bank staff appear not to want to change their mind, even in the face of compelling evidence that nothing in your circumstances has changed. As in Johnson and Rosson’s cases, you may find it easier to opt for a card from another bank rather than toughing it out with your existing provider.
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British Airways strike: how does it affect you?
Mar 12th
As staff of British Airways announce strike action, we unpick the confusing matters of compensation, rebooking and insurance
I’ve booked a BA flight during the strike period. What happens now?
The strike is set to run for three days from 20 March and four days from 27 March, but could cause disruption for days either side of those periods.
The airline says it plans to operate all flights from London City airport, including long-haul services to New York. From Gatwick it plans to operate all long-haul services and about 50% of short haul. From Heathrow it plans to operate a substantial part of its long-haul and short-haul schedule.
BA says it is also obtaining seats on flights operated by other carriers to offer to its customers. It plans to announce a revised flying programme early next week.
If your flight is cancelled BA is obliged under EU law to offer you either a refund or a flight on a different route.
Earlier today a message on its website said that anyone who had booked to travel over the strike period would be offered the option to switch to another BA flight within 12 months free of charge.
It also said passengers whose flights were cancelled could choose to rebook on a different date or on a flight to the nearest alternative airport, or cancel and get a refund.
Will my travel insurance offer any cover?
The Association of British Insurers says that any policy bought before the dates of the strike were announced will operate as usual. Many policies will pay out if you are delayed due to industrial action, but few will pay out if you now decide to cancel your trip – check the small print to see what cover you have.
Aviva, for example, says it will provide compensation for each 12 hours your flight is delayed, and if you decide to abandon your holiday because departure has been delayed for more than 24 hours. Pay outs will cover any travel and unused accommodation costs you have paid before you start your trip and cannot get back from the providers.
Now the strike dates have been announced many insurers, including Aviva, will refuse to offer cover on new policies because the action is a “known event”. Don’t let this put you off considering a policy as it will still cover things like lost baggage and medical expenses.
What about compensation from BA?
EU law dictates that passengers would ordinarily be offered compensation of up to £600 if a flight is cancelled. However, industry experts say the airline could argue that the strike was “beyond its reasonable control”.
Should I book my own alternative flight?
If your BA ticket is fully refundable you might want to cancel it and make your own alternative travel arrangements. If not you may want to sit tight, as buying a second ticket means taking a gamble: if the strike is cancelled, as happened at Christmas, you could end up with two tickets to the same destination.
Unless either ticket is fully refundable you will lose money because BA will not be obliged to give you a refund and your travel insurance is unlikely to offer any help either.
What if my flight is part of a package holiday?
Although most people just book a flight through BA, it does do package holidays. The Civil Aviation Authority says people who booked an entire holiday with the firm should contact their travel agent in the first instance, as they may be able to offer alternative travel options.
I already have a travel insurance policy. Will that cover me?
You need to check the small print, as not all standard policies cover flight delays and cancellations caused by industrial action. Those that do rely on a muddled array of factors including the type of strike and when the policy was issued.
If BA cancels the flight you may be able to claim back the cost of a new flight, and in some cases the cost of the whole holiday. Before you book a new flight check that your insurer will cover any difference in the cost. But if you decide to cancel your holiday it is unlikely your policy will cover you.
What can I do if my insurer refuses my claim?
If you have exhausted your insurance company’s complaints process and still think you have been treated unfairly you could take your case to the Financial Ombudsman Service (FOS).
It will consider claims on a case-by-case basis because policies are all worded differently. The FOS will look at the wordings of individual policies, how well the insurance company flagged up the issue of industrial action when the policy was taken out, and a person’s circumstances when they took out the policy.
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Capped energy tariffs don’t fit, so switch supplier
Mar 12th
Millions of us are ‘locked’ into costly capped energy tariffs. But, as Miles Brignall reports, it may be worth taking the hit on penalty fees and switching to a cheaper supplier
Up to 3m households are missing out on energy price cuts because they are “locked” into expensive capped tariffs, according to a report this week. It says many of those affected would be better off paying exit penalties and moving to the cheapest deal.
Price comparison website Energyhelpline.com says large numbers of electricity and gas customers would have signed up to the capped tariffs offered by British Gas, E.ON, EDF, ScottishPower, and Scottish and Southern Energy over the past two years. They were heavily marketed as a way of avoiding further price rises, and sold on the basis that those who signed up to similar fixed-price tariffs in the past had done well.
Customers typically have to pay cancellation fees of £50-£70 – and, in some cases, up to £100 – if they want to switch to a cheaper deal, but energyhelpline says many need to do just that. It says the penalties appear to be scaring off many who signed up to these deals, and some customers will even be unaware they are overpaying.
The warning came in the same week that five of the big six suppliers announced relatively small (3%-8%) reductions to gas prices, leading to cuts in annual bills of typically £50-£60. The move has made the price gap between those on the cheapest online and the most expensive capped tariffs even more marked. According to the figures, the most expensive capped tariff, from British Gas, is, on average, £539 more expensive than the cheapest internet tariff – £889 offered by First Utility.
• Pensioners promised £80 rebate on heating bills
• Scottish Power trumps EDF with gas prices cut
• Compare and switch energy suppliers
Mark Todd, director of Energyhelpline, says millions of customers are now paying over the odds. “Many switched to these tariffs at the height of the price rises in 2008, but the charges they are now paying are way above current market conditions. Many feel they cannot leave these plans and they are stuck with them until the end of the contract.
“However, they should take stock of their situation because it’s generally cheaper to take the hit on the penalty fee, and switch to a cheaper deal. The average lock-in tariff is around £250 more expensive than the cheapest tariff.” He says the British Gas Fixed Price tariff, that runs until the end of January 2012, costs an average of £1,428 a year – a huge difference when compared to the cheapest available tariff of £889. Those signed up to the EDF Energy Price Protection 2010 plan until 30 September this year could also save more than £400 a year by switching to the cheapest option.
“Internet energy prices have been dropping rapidly, and many capped tariffs have been left behind. There is no reason why people should be missing out on these cheaper prices, so the time is definitely right to consider switching,” says Todd.
The message that you can switch was reiterated by Audrey Gallacher, from watchdog Consumer Focus. “If people are worried about being on fixed-price deals, there’s nothing to stop them leaving.
“They may be exposing themselves to a termination charge and therefore they should do their sums, do a price comparison, look at how much they can potentially save, and look to offset that against any potential termination fee,” she says.
British Gas, which has the biggest price differential, says it offers long-term contracts “because, like mortgage customers, many energy users want the peace of mind that fixed products offer. Customers can, at any time, choose to exit their deal before maturity on payment of an administration fee, which is clearly explained to customers when their contract starts”.
So, if you are on a fixed-price deal, how do you know whether you are being overcharged? The table above only shows the most expensive fixed-price tariffs; there are plenty of others that are similarly affected, albeit with smaller price premiums.
Your gas and electricity bills will show which tariff you are on. Armed with that information, go on to one of the comparison websites (others include the Guardian’s switching service, TheEnergyShop.com and uSwitch.com), input your annual bills, and they will estimate potential savings.
If you prefer to talk to someone, call the Guardian’s switching service on 0800 634 5192 and it will do the same. The cheapest tariffs mostly require you to manage your account online. The cheapest dual fuel deal is First Utility’s internet tariff named iSave V3. The second cheapest is British Gas WebSaver 4, priced at an average 899 a year.
Armed with the potential savings, it is a simple case of working out whether they will outweigh the exit penalties. It will depend on how much longer your deal has to run. Clearly those on British Gas’s fixed-price 2012 deal have nothing to lose by moving. They will save £500 by moving to British Gas’s cheapest online tariff – quite a saving.
The EDF deal which runs until the end of September is probably worth leaving, but the saving won’t be huge, given we have left the winter months behind, when usage is at its highest.
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Pensioners promised £80 rebate on heating bills
Mar 12th
Government initiative to cut bills for poorest pensioners will be funded by big six energy companies
Energy companies will cut a total of £20m from the electricity bills of 250,000 of the poorest pensioner households in the country, the government announced today.
The rebate, under a combined initiative between the government and leading energy companies, will be targeted at households where a at least person is aged 70 or over and in receipt of the guarantee credit element of pension credit.
Each household meeting these criteria will receive a flat-rate rebate of £80, with the first payments in May or June. Energy companies will make the awards automatically in most cases by subtracting it from householder’s bills, a Department for Work and Pensions spokesman said.
The government intends to share data with British Gas, EDF, E.ON, nPower, Scottish Power and Scottish & Southern Energy about who these householders are so the companies can automatically issue the rebate, which will be funded by the energy company. Smaller suppliers, such as Ebico and M&S Energy, that get their gas from the big sixwill automatically be included in the scheme.
The move is aimed at reducing the heating bills for the most vulnerable householders, despite the fact that most households heat their homes with gas rather than electricity. “I don’t want any vulnerable pensioners to be afraid to turn up their heating,” Yvette Cooper said, announcing the initiative.
It comes in the same week that four of the big six energy suppliers cut their gas prices by between 4 and 8%. Scottish & Southern cut its prices last week and British Gas did so in February.
The £80 rebate comes on top of the £250 winter fuel payment and the cold weather payments already received by eligible households.
“Better targeting of assistance to low income households is the way forward in assisting the poorest customers who are struggling to meet their energy bills,” said Jonathan Stearn, energy expert for Consumer Focus. “This is a very welcome move and needs to be developed to help all low income consumers struggling to make ends meet.”
A spokesman for the DWP said the data share would be handled by a third party data handling company to ensure it is secure. The government will provide the company with details of the eligible households and energy companies will provide it with lists of customers. The third party will then match the two and share the resulting data with the energy companies.
Some of the details of eligibility are still to be ironed out and will be announced at the end of March. For example, householders who are already on energy companies’ social tariffs may not qualify for the payments and there may be problems if the bill payer does not qualify but someone they live does. In this case the rebate should still be rewarded, said the DWP spokesman.
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Direct debit dangers of ‘rolling’ policies
Mar 12th
A customer was confused by a long-forgotten direct debit for a ‘rolling’ insurance policy, which kept making her overdrawn
This is a warning to all those who have bulging, unstudied files of paperwork. Track them down, dust them off and study them because you could be lining the pockets of companies you’ve completely forgotten about.
Catherine Mattingly wanted to end her relationship with her bank and so cancelled all her direct debits and attempted to close the account. Shortly afterwards she was told that the account she had thought extinct had, in fact, gone overdrawn and she had been fined £90 for her audacity. She paid up.
The next month the account was still alive and kicking and once more in arrears, so Mattingly once again forfeited £90 in fees. This time her son, Zach Brown, examined her statements and discovered a monthly direct debit mandate to a company called Policy Administration Services (PAS). This turned out to provide insurance for a long defunct mobile phone, and Mattingly was certain she had never heard of the company.
Further sleuthing revealed she had been talked into a three-month rolling policy when she bought a handset through Phones 4U in 2004, and in five years had inadvertently paid £519 in insurance premiums.
Mattingly had no recollection of any paperwork associated with the policy, which is not surprising because PAS admits it never sent any, except for a welcome pack in 2004.
A spokesman says: “PAS are not required to send renewal letters to customers as both the mandate signed instore and the terms and conditions of the policy state that the insurance is provided on a rolling monthly renewable contract and can be cancelled at any time.”
The company could not even provide the signed direct debit mandate so referred Brown to its sister company, Phones 4U. It did, however, offer to refund £191 of the payments, but Brown questions whether it is legal for a company to renew a policy annually without contacting the customer.
It is legal, but not good practice, and in Mattingly’s case the issue was compounded by the fact that PAS’s name gives no indication that it is an insurance provider, and so she had forgotten what she was paying for.
Obviously, Mattingly should have kept a closer eye on her accounts and queried the payments earlier, but a spokesman for the Financial Ombudsman Service says it would consider taking up such a complaint, although he points out that some policies sold before April 2007 are not regulated.
He added: “We would look at how the policy was explained to the customer at the point of sale and what paperwork she was given, because this must be clear and fair. We would consider it reasonable for a company to keep in touch with its customers and would look at whether the company has tried to do this.”
Happily, Phones 4U’s respect for the Guardian encourages it to refund the entire £519 as a goodwill gesture.
Let others beware. Should an amiable salesman terrify you with a sketch of the catastrophes that await you if you don’t insure a new purchase, make sure you know what you are signing up to, how you can cancel it, and whether it is worth the money.
Watch out particularly for three-month deals (or similar) as the provider is counting on the fact you will forget to cancel at the end of the period and will fund them inadvertently for years to come.
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