The Irish Examiner
Editorial, April 14, 2005
FROM banks to phone companies, insurance brokers and the ESB, the scandal of rip-off Ireland continues.
Seemingly, as far as some elements of business are concerned, overcharging the hard-pressed consumer is the way to go.
Today’s assessment of the latest evidence in a long-running series of financial controversies shows that in the past year alone, overcharging by public and State-owned companies exceeded €100 million.
Obviously, this estimate does not take into account the Government’s illegal charging of pensioners in nursing homes which could yet cost taxpayers €1 billion.
Persistent overcharging, unwitting or otherwise, adds considerable weight to demands for Government to establish a no-nonsense consumer body with sharp teeth and wide-ranging powers to root out the rampant overcharging.
In the past year, more than 1,200,000 consumers were overcharged to one degree or another and the total bill for the collective ‘oversight’ comes to a whopping €103,743,000.
Those who defend companies found guilty of overcharging are quick to point out that in some instances the level of repayment to individual consumers was so small as to be negligible. That line of argument misses the point.
The really worrying thing is that a rip-off culture has taken root. And it has been allowed to flourish unchecked ever since the introduction of the euro four years ago, despite Government assurances that this would never happen.
Because of the climate of denial in which they have been operating, some financial institutions had to be dragged kicking and screaming into admitting their errors. Invariably, when evidence of overcharging comes to light, the silence in the world of business can be deafening.
Yet, groups representing commercial companies are quick to object against calls to increase the minimum wage of people who have to pay through the nose for everything.
Further proof, if Enterprise Minister Mícheál Martin needed it, of the rip-off mentality that pervades this country, is to be found on the watchdog website Value Ireland.
On its current list of offenders, the minister will find household names from the world of finance, including AIB, Bank of Ireland and Permanent TSB, as well as the phone companies O2, Vodafone and Eircom, along with ESB, the State-owned electricity supplier, and the insurance group Axa.
No wonder people no longer trust the system. As the Consumer Association points out, a much stronger line must be taken towards companies which overcharge their customers.
Undoubtedly, the appointment of a Financial Services Ombudsman earlier this month is a step in the right direction.
But if faith in financial institutions and other companies is to be restored, and if the public is to trust the new regulator, a get-tough approach must be taken when companies break the rules. As well as refunding customers, they should be made pay a fine.
But the financial ombudsman is only part of the answer. If the present pattern is allowed to continue unchecked, not only will the relentless pressure on domestic consumers become utterly unbearable, the country will inevitably price itself out of cut-throat international markets.
Thankfully, there is no need for Mr Martin to commission yet another report in order to discover the scale of this problem. Such a report is already lying on his desk, having been commissioned by his predecessor, Tánaiste Mary Harney.
It has recommended the establishment of a powerful enforcer body to oversee prices and give meaningful protection to consumers.
That recommendation should be acted on without further delay.