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Check Please

The Irish Independent
Ciaran Brennan, April 15th, 2008

You wouldn’t pay a restaurant bill before examining it, yet people are placing blind faith in service providers and it’s costing them, writes Ciaran Brennan

IT’S highly unlikely that you would hand over money for a meal in a restaurant without asking for the bill and checking it thoroughly to make sure it seems reasonable and everything is in order.

But a huge number of householders and consumers pay off bills and file their bank statements without even a cursory look. And they could be paying dearly for it.
If the history of personal finance has show us anything, it’s that consumers have regularly been overcharged — by banks, insurance companies, brokers, utility providers and even the State bodies.

Despite the plethora of high-profile cases in the past number of years, consumers are still failing to check bills and are placing blind faith and trust in service providers when it comes to their money.

A recent survey by website Valueireland.com found that four out of every 10 Irish consumers surveyed did not check their bills before paying them.

“Given all of this startling evidence of overcharging by large, well-known Irish companies, widely reported in the media, it is confounding that upwards of 42pc of the surveyed visitors to www.valueireland.com admit they don’t check every bill they must pay,” says Diarmuid MacShane, who runs Valueireland.com.

“Why then, when we have these companies themselves telling us that they are overcharging their customers, do we as consumers not check every bill that we get through the door to ensure that we are only being charged for the services we have received?”

Habit

A key issue is the number of bills that are now paid by direct debit. With money being automatically deducted from consumers’ accounts for many services, many have got into the bad habit of not checking their bills. The situation is made worse if you don’t regularly check your bank statements.

“If you pay by direct debit and you don’t get you bank statements and you are not regular about checking online, you’re never going to know how much money is being taken from you,” says Mr MacShane.

“There is a tendency for bills to come in the door and for people never to look at them because the money automatically goes out.”

Utility bills can present other problems for consumers. Their meter readers visit your home three or four times a year to read your meter. The rest of the time — or when they can’t get access — your usage is estimated. This estimate is based on previous consumption, and any necessary adjustment is made when the next reading is obtained.

A frequent problem is where consumers get an estimated bill which is much bigger than what the meter is showing. In this case, you need to get your actual reading to the supplier.

“One of the things we have done in Valueireland is to encourage people, even on a monthly basis, to read their meters and dial it in. It’s a five minute thing to ring in with your bill. Always keep it up to date to get away from having the estimates all the time. It means you are paying out for your actual usage rather than getting an estimated bill, it gives you a better idea of how much it actually costs.”

Householders and consumers should not be lulled into a false sense of security by the size and reputations of companies, warns Mr MacShane.

“Just because a company is big and well known and is one of the leading companies in the market, it doesn’t necessarily mean that you can trust it. Just because it’s big and well known does not mean it’s not going to rip you off and take money from you.”

Checking bills regularly will require a little time and effort on the part of consumers and may involve taking out a calculator and making a call or two for extra information.

“But it’s our money — shouldn’t we make sure we only hand it over when we’re sure everything is above board?” Checking your bills and statements when you get them allows you to rectify a problem early on, he says.
“The complaints procedures and the lengths you have to go through to try to get money back from these people are so complicated, the burden of proof, going back over paper work, having to write to them. You are better off catching it up front rather than trying to sort out things afterwards.”

Undercharging just never seems to happen

Companies usually refer to cases of overcharging consumers as “errors” which occur due to systems failure.

But Valueireland.com’s Diarmuid MacShane asks the pertinent question: “How is it that these errors are always in favour of the business, with undercharging being almost unheard of?” Here are examples:

– Just last month, the Financial Regulator warned consumers that some insurance brokers have been overcharging and failing to pay their clients rebates. The regulator carried out inspections of insurance brokers and found that some did not make full disclosure of fees for their services.

– In July 2004, AIB apologised to its customers following revelations of overcharging approximately 170,000 accounts of upwards on €25m for foreign-exchange transactions.

– In April 2005, Bank of Ireland admitted overcharging customers up to €15m for payment protection insurance.

– Ulster Bank announced last year it was to refund more than €4m to approximately 25,000 customers who were overcharged on payment protection policies taken out with loans from the bank.

– It was revealed in 2004 that 31,500 Eircom customers were overcharged by an estimated €409,000 over a 10-year period by being billed twice for call management services such as call waiting, mailbox facilities and diverting calls to another number.

– A total of €380m is expected to be repaid to patients illegally charged for their nursing home care, it was revealed earlier this year.

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