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Consumers ‘victims of €620m rip-off’

The Irish Examiner
Tuesday, November 25, 2008
By Jennifer Hough

CONSUMERS have been ripped off to the tune of €620 million in the past four years, according to a watchdog website.

The report by ValueIreland.com shows more than 1.6 million customers were overcharged €623m for a range of goods and services from insurance companies to banks to phone companies from 2004 to 2008.

Editor of the website Diarmuid MacShane, a former director with the Consumer Association of Ireland, said he started compiling the name and shame list following a number of high-profile cases in 2004, and a survey by the website which found that more than 41% of Irish consumers did not check their bills before paying them.

The report paints a stark picture of how consumers pay for companies mistakes. AIB was listed eight times on the survey. Bank of Ireland had five offences, while the ESB was named four times.

The Government rang up the largest bill when it admitted in December 2004 that it knew pensioners with medical cards were being charged illegally in nursing homes.

This repayment of this overcharging is expected to cost in excess of €50m.

Mr MacShane said these revelations could possibly be the tip of the iceberg, as many people did not even notice they were being overcharged.

He added that he felt the Financial Regulator could be doing more to discipline the offenders, some of whom seemed to be overcharging again and again.

“As far as the consumer is aware there has been silence on the part of the regulator,” he said.

Dermott Jewell, chief executive of the Consumers’ Association of Ireland, said the research highlighted how important it was that people checked their bills.

Mr Jewell said the issue of overcharging had come up in a CAI survey in relation to supermarket receipts and price discrepancies.

“At different occasions we have carried out similar surveys looking specifically supermarket receipts. People need to be vigilant and check their bills.”

Mr MacShane also called for consumers to be cautious and not to make the mistake of assuming the bill was right.

“Banks and other companies had overcharged customers by large amounts of money, yet customers rarely noticed,” he said.

“If we don’t take such a precaution as checking a bill to protect ourselves from overcharging businesses, how can we expect others to protect us from these businesses?”

A spokesperson for the Financial Regulator said it was very active in pursuing companies who were thought to be overcharging.

The regulator yesterday announced that some of the country’s top banks are still not dealing adequately with complaints from customers.

It said that while all institutions had procedures in place that complied with the requirements as set down in the Consumer Protection Code, there were still problems, with 27% of consumers having “no idea” how to complain about a financial product or service.

Overcharging: High-profile cases

  • August 2007 — Ulster Bank admits overcharging customers by €4m.
  • April 2005 — AXA Insurance promises to refund €1.7m to 130,000 customers who overpaid for home or motor policies.
  • April 2005 — Bank of Ireland admits not refunding customers who had overpaid on insurance products to the tune of €15m.
  • June 2004 — Vodafone admits overcharging 22,000 customers a total of €147,000 through exaggerated roaming charges.
  • July 2004 — AIB confirms it was to make refunds to 34,000 of its third level and graduate customers. The total, before interest compensation, was €1.4m.
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