ValueIreland.com

For a couple of years now, Value Ireland has been trying to keep track of all the incidences where Irish consumers have been overcharged. In my mind, this overcharging is the true face of “Rip Off Ireland”. Consumers are being charged more than they’re supposed to be for services they’re receiving. You’ll see some excellent discussions on this aspect of “Rip Off Ireland” on the AskAboutMoney forum - for example, here’s a recent thread.

To date, by our count in our article published here, 1.2million Irish consumers have been overcharged by over €100million. And these incidences of overcharging have been carried out by some of our best known companies - Bank Of Ireland, AXA Insurance, Meteor, AIB, VHI, Irish Life, Vodafone, permanent TSB, Eircom, O2, the ESB, (ESAT)BT, and NTL.

Another aspect that has come up on AskAboutMoney recently as regarding solicitors and how or if they are overcharging their own customers. Given some coverage regarding how it was alleged that some solicitors were double charging people who had received compensation from the Residential Institutions Redress Board, we tried to quantify this for our report above, but were unable.

A recent article in the Sunday Business Post, Complaints about Solicitors Rise has shown that since the allegations above, complaints regarding solicitors overcharging numbered 600 in 2005, 30% of the total of all complaints.

Of the total number of complaints made however, only 3% actually resulted in disciplinary action being taken, and as far as we read the article, only 1 of these complaints was as a result of solicitor overcharging (dishonesty). 1 complaint out of 600.

Having been in a situation where a solicitor appeared to be overcharging me for a particular service in my home town in Mayo, in response to a polite enquiry, my learned friend boldly told me that if I didn’t like it, I could “complain to the Law Society, but that won’t get you anywhere, and you’ll still have to pay me upfront anyway and get the money back from them”.

Hardly a model of customer service, and the prospect for people having to complain to a body of the apparent might of the Law Society doesn’t ease the process of making a complaint about your solicitor at all.

If we’re going to make the National Consumer Agency the saviour of the Irish consumer, then this agency should be looking at taking on and resolving complaints for all manner of consumer complaints, including the ridiculous situation where professions regulate themselves without any manner of independence at all.

Being a fairly irregular Lotto player, I never bothered checking the numbers immediately when they were drawn. Mostly, I’d just go to a shop, hand over my ticket and ask the person behind the counter to check if I’d won or not.

A couple of times, I’d win a few quid, or a scratch card, and they’d give me my winnings. However, on a couple of occasions, I was told that I’d won nothing, and they crumpled up my ticket to throw it away. I did find this strange on those occasions as normally I’d be given back my ticket if I’d won nothing. However, I didn’t think anything more about this.

Until now. Click here to read about a lottery player in Canada who had his winning ticket stolen from him by the woman behind the counter who was checking to see if he’d won anything. I read about this first on the Freakonomics blog.

Basically, this elderly gentleman handed over his ticket to see if he’d won. The woman saw that he’d won ca$250,000, but told him he hadn’t won anything and kept the ticket for herself. She claimed the money as her own, and received a cheque for the ca$250,000.

The gentlemen realised what happened almost immediately, particularly after seeing the woman receiving her winners cheque, and seeing the numbers he’d picked. Despite going to the people running the lottery with sufficient evidence, it too a court case and over 6 months before he eventually received his money in an out of court settlement.

Lesson learned. Not that we know that this has happened in Ireland, but we don’t know if it hasn’t happened either. So if you have lottery numbers to be checked, do it yourself. It’ll only take a couple of minutes for you to be sure. The numbers are available on the television, on Aertel, in the newspapers, on the National Lottery website, and you can get them printed out on a ticket in the shops the following day.

To take the slogan of the UK National Lottery, “It could be you!”, but in a situation like this, not in a good way.

I received this e-mail this morning. It looked like one of your normal rubbishy chain e-mails, especially as the heading was “Revenue owe YOU money, get it now… THIS IS ACTUALLY TRUE”. Normally the “THIS IS ACTUALLY TRUE” is a dead give-away.

However, the contents of this particular chain e-mail is correct. Maybe slightly exaggerated, but definitely it’s something that everyone should do. The Fine Gael Party almost touched upon this advice in their Taxback Campaign.

For a few years now, there have been numerous calls for the abolition of the credit card surcharges imposed by many online sellers just for the privilege of paying them even more money for their products. Those making payments online to companies such as Ticketmaster, Aer Lingus, Ryanair and others may find themselves subject to an extra charge of around 1.5pc to 2pc. Many holiday companies also impose these charges for consumers booking holidays online.

While the rules between the banks and retailers do not allow charges which discriminate against people paying by credit card, there is legislation allowing some surcharges, which means the matter is not clear cut which means in some cases retailers are perfectly entitled to add on handling fees.

The subject of this credit card charge is now the responsibility of the Irish Financial Services Regulatory Authority (IFSRA) since 2003, but still nothing has changed since then. The only comment I can find from them as a spokesperson saying: “The office is in discussion with the banks and we haven’t made as much progress as we would have liked.” He said the office would continue to press the banks with a view to eliminating these charges.

In 2003 it was quoted that of 63m credit card transactions, there were only 200 complaints related to this annually. So it’s not really a problem then? Or do people just accept that they’ve no choice but to pay the charges, and that there’s no point in complaining?

The helpful people at the European Consumers Centre said that if consumers agree to pay the surcharge, it is their choice. Excellent advice in a situation where these charges are levied on purchasing items online where there is little alternative.

In 2004, the Fine Gael party, via their Ripoff.ie website, called for IFSRA to abolish these credit card surcharges. A survey they did found surcharges ranging from 2% to 5%. In 2005, the Consumer Association of Ireland and the Irish Bankers Federation issued a joint press release calling for these charges to be dropped.

Now, in October 2006, this article in the Sunday Business Post brings alive the issue of the scrapping of these credit card surcharges. Unfortunately, there’s nothing new there, and it’s the same people making the same points.

Let’s face it; the credit card surcharge is a charge for convenience. We pay more in our local Spar for items instead of driving all that way to a larger supermarket, so isn’t it somewhat reasonable to pay for the privilege of not having to queue at the cinema for tickets, or to have the schlep all the way into town to buy concert tickets?

While I’d obviously be all in favour of getting rid of a charge that makes online purchasing cheaper, I think that it might be more realistic to ask that more realistic boundries be put on how these charges are levied.

It’s absolutely nuts to have to pay a surcharge on a per ticket basis to Ticketmaster since the administration overhead would be the same if I buy 1 ticket or buy 10. And it’s even more ridiculous to be paying these administration costs on a per ticket basis to airlines who are providing you with the facility of printing your own tickets. Where’s the administration there?

We’re told that these charges are to defray the “substantial costs” of processing credit and debit card transactions. Yet, these are all automated transactions that in all likely cost cents at a time, yet we’re paying large multiples of that. It would be interesting to see the profit that these companies make on credit card transaction revenue alone.

Finally, to show the ridiculousness of it all, some airlines doesn’t charge transaction fees on tickets bought for infants. Presumably though the same amount of processing is required in the background, so it shows the cynicism with which these fees are charged.

Why go for an all-out scrapping of this charge, which we’re most unlikely to be successful in getting? Maybe if we can ensure clarity and fairness in how these “convenience charges” are levied, it could be much fairer, with the companies still getting their money, but the consumers also having to pay less.

When Value Ireland was started in 2003, the Irish Times was one of the few national newspapers which provided the least amount of coverage to the perceived phenomonen of “Rip Off Ireland” at the time. By extension, they weren’t interested in giving any coverage to Value Ireland, unlike some of their competitors.

Things have changed. The Irish Times now has a PriceWatch section every Monday in their printed edition. The full page normally covers a feature article regarding consumer affairs in Ireland, and then has smaller sections devoted to reviews of a particular kind of product, e-mails from readers, and a section devoted to items given either a “thumbs up” or “thumbs down”.

The PriceWatch section is definitely worth a quick read each week to see what’s going on. It has actually taken over, in my opinion, from the previous leading position which the Irish Independent Business Section on a Thursday had when it came to consumer affairs in the national press.

You can access the PriceWatch column online for free via the Ireland.Com website. Look to the left hand side of the page in the Weekly Index section for PriceWatch on a Monday. Unfortuntately, I can’t provide a direct link - well, here’s a direct link for Monday October 23rd.

After having numerous issues personally with the mobile phone company 3, including the bizarre situation where they claimed that there were “implied terms” in their contracts, I’m glad to see the Office of Director of Consumer Affairs coming out with some guidelines on phone contracts.

I presume these are prompted by the Smart Telecom debacle recently and the apparent inactivity by Comreg until it was too late, but they’ll apply to mobile phone companies as well as fixed line providers, and presumably broadband suppliers as well.

Comreg, as I discovered myself, will not assist you with any contractual matters between yourself and your phone provider. By providing this help, presumably the ODCA will now provide guidance to consumers should they need it in the future.

The clarity on where Irish consumers could go with complaints about their phone service providers was badly needed.

Today, the Competition Authority have announced that they are to investigate Ireland’s soaring electricity and gas prices. Specifically with regards to electricity prices, ESB prices are set to go up in January 2007 by 20%.

Here’s a tip for the Competition Authority. According to Value Ireland research, there is no competition for Irish consumers in the electricity market. You can buy from the ESB, and that’s it. Read the research article here.

Irish domestic consumers now pay 51% more for their electricity than the EU average. From January, Irish consumers will pay about 17.5% per cent more for electricity than their British counterparts. Ireland could have the third highest electricity prices in the EU by January with this most recent price increase.

We’re told that this is because of increasing costs of the raw material used to create electricity - oil and gas. Yet we’ve seen the wholesale prices of these materials fall recently. And if that was really the case, why have we seen electricity prices increasing about four times as fast in Ireland as price rises in the 15 countries of the pre May 2004 EU, according to figures published by Eurostat earlier this year.

But wait a minute. We’re told in a Deloitte report that Irish consumers are forking out an extra €100m on their electricity bills due to poor management at the ESB. The debacle at the Rhodes powerstation is a great example of this poor management. We’ve also been told in the press that wages for some individuals working at the ESB Poolbeg generating station in Dublin running to €140,000 including overtime!

These huge costs within the ESB are on top of the €77m dividend that the ESB paid to the Government in 2005, which brought dividend payments from the ESB over the previous three years to €175m.

So we’re paying higher costs because of the inefficiency of the ESB. Yet the ESB expected in 2005 to make a profit of around €300m.

The numbers here are staggering. Is there nothing that can be done to address the numerous issues here in order for us to have lower electricity costs?

The Government will claim that there’s little they can do in the short term. But there is! The Government currently charges 13.5% VAT on electricity compared to 6% in the UK. This provides a further €360m annually to the Government finances. Even reducing this VAT rate to the same as the UK would save Irish consumers nearly €100 per year.

Finally, there is a tiny flicker of light at the end of the tunnel, as expensive as that may cost us. It is expected that the Public Service Obligation (PSO) will be removed from all electricity bills in 2007. This saving is a result of the steadily improving competitive position of wind power, which has resulted in a reduction in the annual PSO levy imposed on domestic consumers. This levy will be set at zero in 2007 and will result in annual domestic electricity bills falling by whopping €11.

Apart from the Boards.ie “Rip Off Ireland” Forum, Value Ireland was the very first internet site to address the concerns of Irish consumers.

The launch of Value Ireland in 2003 attracted a huge amount of attention, from internet users and the media alike. This can be seen in the media coverage the site received at that time.

Some media outlets were so keen on getting a story about Value Ireland into the paper that they didn’t even waste time speaking to me and simply copied and pasted bits off the website.

Value Ireland was quickly followed by RipoffIreland.org, Ripoff-Ireland.net, SoapBox.ie, RipoffIrl.com, RipoffCard.com, IrishShopper.com, ShoppingBill.com, IrelandsCheapest and a few others that don’t come to mind right now. Most of these are gone now, or are rarely updated.

What is it they say, “Imitation is the sincerest form of flattery”? In that case, I was most flattered by the decision of Fine Gael to create their version of Value Ireland. Ripoff.ie came along in early 2004, and burned brightly for a while before they too realised that people don’t really care all that much about complaining any more. Obviously no votes in that any more.

All of these websites took the tone of focusing on the negatives of the perceived “Rip Off Ireland”. Value Ireland continues better than ever, focusing on the positives, and providing helpful advice to consumers on how to act in the consumer environment we’re facing today.

Value Ireland is also, to a certain extent, filling the void left by any of the established Irish consumer agencies (Consumers Association of Ireland, Office of Director of Consumer Affairs, National Consumer Agency) in providing consumer advice online to Irish consumers. And it’s intended to continue and strengthen this into the future.