Tag Archives | National Irish Bank (NIB)

What would it take for you to switch your bank?

There’s a lot of talk these days about how our choice in banking is slowly but surely being eroded with the closure of Halifax, Postbank, NIB branches, First Active and the looming threat that both AIB and Bank of Ireland will engage in massive branch closures to save cash.

On that basis, this post may not be all that timely – but I guess after years of recording incidences of where banks repeatedly gouge their customers through multiple overcharging scandals, this post may never be timely in Ireland.

Is there anything that would make you change your bank account – assuming that knowing that your bank is quite likely to steal your money from your account for themselves won’t do it for you.

This article from the Get Rich Slowly website, What Does It Take to Make You Switch Banks?, asks that very question and poses a few scenarios. Are there any of the following points that would cause you to switch your banks:

  1. Higher interest rates on borrowings than the competition?
  2. Lower interest rates on savings?
  3. Poor customer service?
  4. Length of history with your current bank?
  5. The principle of the thing?
  6. Accessibility – particular now with branch closures

Another way of looking at this would be if you imagined what a bank outside of Ireland might be thinking when looking at Ireland to see if it’s worth coming into the market.

We’re going to hear much bleating in the coming weeks and months about the reduction in competition in the banking market, but if people aren’t inclined to switch banks (even during times when we had plenty of competition), what’s the point in calling for more competition if most people are going to stick with the old unreliables?

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Make your cash work harder for that rainy day

Irish News of the World

May, 2009

Diarmuid MacShane

Working Cash Hard for Rainy Day

Sometimes these days it’s hard to know whether to laugh or cry. As jobs are lost nearly every day, yet with the end of the Celtic Tiger comes cheaper shopping – prices fell by 3.5% on average in April alone.

Falling interest rates means some of us have cheaper mortgages while others are stuck paying fixed amounts every month. And falling rates are causing headaches for those of us who are trying to save a little nest egg for a rainy day.

Saving Ireland

In 2007 we were saving 3% of our disposable income, while now we’re saving over 3 times that at 10%. According to the NIB who releases those figures, “Irish households are saving by buying less”.

Do what mother says!

Growing up, we were always told that we should have a little savings in reserve in case of a rainy day. Some of us, unfortunately, may experience that rainy day sooner rather than later, and not just because our summer hasn’t started yet.

A rainy day fund should probably contain enough money to allow you cover your monthly expenses until you find a new job. To avoid having to wait to get access to your money, it should also be easily accessible in an emergency. Depending on your line of work, your rainy day fund could be anything from 4 weeks to 6 months or even more in the current job market.

Getting any Interest?

Even though keeping large amounts of money in your current account means that it’s the most accessible possible, apart from Halifax who pay 7% up to a balance of €2000, current accounts pay the worst interest of all – generally less than 1% for most banks.

But beware the small print

When picking an appropriate savings product, you should first check a couple of things. How long will the bank pay that rate for – many accounts are limited to some time in 2010? Is there a maximum or minimum balances? How often will they allow you get access to your money – is it days, weeks, months or years? Do you have to make regular minimum deposits – some let you save €1 per month, others want €100? Are there interest bonus’ or penalties  – either extra interest to leave your savings there, or penalties if you stop saving early?

Show me the regular money!

I think that the best way to build up the rainy day nest egg is to save a little amount regularly – and preferably to have the money taken straight from your account as soon as your salary is put in. That way, you don’t get the chance to spend it on something else.

Therefore, a Regular Saver account is the account to go for. If you had an SSIA, it’s almost the exact same concept, except this time there’s no free money from the government.

The best rate available at the moment is the Family Saver Account from the EBS that pays 5.1%. Next best is the Regular Saver account from the AIB that pays 5%. The worst accounts just pay 1%. If you’re saving €100 per month, that’s almost an extra €50 in your pocket (before DIRT tax).

More interesting

If you’ve got a bit of money put away already, and you want to try to earn a bit more money, you could lock away the money for a bit longer – but remember, the longer the term, the less easy to get at it in case of an emergency.

The best rate for a 6 month deposit is 4.07% with Investec. They also provide the best 1 year rate at 4.5%.

And try as we might, even when it comes to earning interest on our savings, the government will still take their chunk. For most of us, DIRT tax means they’ll take 25% of our interest as tax. This was only 20% back in November before the budgets kicked in.

More Interest, less Tax
There are ways to avoid paying this DIRT tax. You don’t pay DIRT on the money you make on your savings with the Credit Unions. But, the money you earn from a credit union isn’t treated as interest – instead it’s considered a dividend – or income. So, instead of paying DIRT, you must declare the income and be taxed on it.

For most of us, the main way to avoid DIRT means investing with the An Post through their Savings Certificates or Savings Bonds. These are longer term savings of 3 or 5.5 years so you’d need to be sure you won’t need the cash in the short term. The interest paid is equivalent to 4.3% and 4.7% respectively.

If you’re over 65 and meet certain criteria, you’re not liable to pay any DIRT on your savings interest. Also, if you’re a person with certain disabilities, you don’t have to pay DIRT tax either. The Revenue.ie website will provide further details on whether you have to pay or not, and how to go about getting refunds if you are paying but shouldn’t be.

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Working your Cash Hard for a Rainy Day

Irish News of the World

Sunday May 24th, 2009

Diarmuid MacShane

Working your Cash Hard for a Rainy Day

Sometimes these days it’s hard to know whether to laugh or cry. As jobs are lost nearly every day, yet with the end of the Celtic Tiger comes cheaper shopping – prices fell by 3.5% on average in April alone.

Falling interest rates means some of us have cheaper mortgages while others are stuck paying fixed amounts every month. And falling rates are causing headaches for those of us who are trying to save a little nest egg for a rainy day.

Saving Ireland

In 2007 we were saving 3% of our disposable income, while now we’re saving over 3 times that at 10%. According to the NIB who releases those figures, “Irish households are saving by buying less”.

Do what mother says!

Growing up, we were always told that we should have a little savings in reserve in case of a rainy day. Some of us, unfortunately, may experience that rainy day sooner rather than later, and not just because our summer hasn’t started yet.

A rainy day fund should probably contain enough money to allow you cover your monthly expenses until you find a new job. To avoid having to wait to get access to your money, it should also be easily accessible in an emergency. Depending on your line of work, your rainy day fund could be anything from 4 weeks to 6 months or even more in the current job market.

Getting any Interest?

Even though keeping large amounts of money in your current account means that it’s the most accessible possible, apart from Halifax who pay 7% up to a balance of €2000, current accounts pay the worst interest of all – generally less than 1% for most banks.

But beware the small print

When picking an appropriate savings product, you should first check a couple of things. How long will the bank pay that rate for – many accounts are limited to some time in 2010? Is there a maximum or minimum balances? How often will they allow you get access to your money – is it days, weeks, months or years? Do you have to make regular minimum deposits – some let you save €1 per month, others want €100? Are there interest bonus’ or penalties  – either extra interest to leave your savings there, or penalties if you stop saving early?

Show me the regular money!

I think that the best way to build up the rainy day nest egg is to save a little amount regularly – and preferably to have the money taken straight from your account as soon as your salary is put in. That way, you don’t get the chance to spend it on something else.

Therefore, a Regular Saver account is the account to go for. If you had an SSIA, it’s almost the exact same concept, except this time there’s no free money from the government.

The best rate available at the moment is the Family Saver Account from the EBS that pays 5.1%. Next best is the Regular Saver account from the AIB that pays 5%. The worst accounts just pay 1%. If you’re saving €100 per month, that’s almost an extra €50 in your pocket (before DIRT tax).

More interesting

If you’ve got a bit of money put away already, and you want to try to earn a bit more money, you could lock away the money for a bit longer – but remember, the longer the term, the less easy to get at it in case of an emergency.

The best rate for a 6 month deposit is 4.07% with Investec. They also provide the best 1 year rate at 4.5%.

And try as we might, even when it comes to earning interest on our savings, the government will still take their chunk. For most of us, DIRT tax means they’ll take 25% of our interest as tax. This was only 20% back in November before the budgets kicked in.

More Interest, less Tax

There are ways to avoid paying this DIRT tax.

You don’t pay DIRT on the money you make on your savings with the Credit Unions. But, the money you earn from a credit union isn’t treated as interest – instead it’s considered a dividend – or income. So, instead of paying DIRT, you must declare the income and be taxed on it.

For most of us, the main way to avoid DIRT means investing with the An Post through their Savings Certificates or Savings Bonds. These are longer term savings of 3 or 5.5 years so you’d need to be sure you won’t need the cash in the short term. The interest paid is equivalent to 4.3% and 4.7% respectively.

If you’re over 65 and meet certain criteria, you’re not liable to pay any DIRT on your savings interest. Also, if you’re a person with certain disabilities, you don’t have to pay DIRT tax either. The Revenue.ie website will provide further details on whether you have to pay or not, and how to go about getting refunds if you are paying but shouldn’t be.

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More silly bank charges – this time from NIB

Obviously the credit crunch and the banking crisis is having it’s impact on the banks in Ireland and their need to keep their profits up.

Following on from Conor Popes experience where Bank of Ireland charged him €5.90 for a new Laser card, I was this week charged €1.95 by National Irish Bank for them to re-issue me with a PIN number for my credit card.

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The RIP-OFF Encyclopedia – Our A-Z guide on who is fleecing you and where

The Sunday World
Des Ekin, September 26th, 2004

Alcohol. You can’t argue with the statistics – since 2001, the average price of a pint of stout has risen by over a sixth (from €3.06 to €3.54) and the price of whiskey by a quarter.

Irish pubs are now the second most dearest in the Euro-Zone. A combination of grasping price hikes and increased Government taxes was already forcing punters away from the pubs long before the smoke ban hit.

Now that the €5 pint is a reality in some bars, business is plummeting. Wexford bar owner Francis Dooley has slashed his pint price by €1.50 in a bid to lure back his customers. He says he’s “reacting to market demands”. At long long last.

Banks. The overcharging scandals involving AIB (a mere €34m) and NIB (just €7.5m) were a drop in the ocean compared to the estimated €1,000m that the Irish banks ripped off from their Irish customers and the late 90’s and early 00’s when European interest rates plummeted.

A damning report by the financial services watchdog IFSRA roasted the banks for failing to pass on these cuts to their customers. The charge is repeated in the latest report from the National Competitiveness Council (NCC).

The ripoffs continue on a daily basis. Charges for a current account are 17% higher than in the UK and, although shopping around could save an average user €220 a year, crippling penalties have (up until now) prevented us from switching accounts for the best deal.

CDs. I’ve just bought two top chart CDs (The Thrills and The Streets) and a classic album (Nirvana’s Nevermind) from the website cdwow for a total of €38, or less than €13 each, including delivery to my door. The same three albums would have cost €48-€66 in the High Street.

A recent survey by the European Consumer Centre in Dublin showed that buying 10 albums online could save €85 – the price of a budget CD player! It’s the same story with DVD’s: another survey showed that a DVD costing almost €30 in Galway cost €24.99 in Dublin and €22.99 on cdwow. In New York it was €16.40.

Doctors and Dentists. When the euro came in, doctors and dentists hiked their prices way beyond levels that could be explained by inflation and higher costs. (Forfas Report, 2002).

A GP consultation that used to cost £25 (€31.75), suddenly became €35 or even €38. Now the norm is €40, but according to the Health Department, some GP’s charge up to €50 and private patients restrict their visits to less than three a year instead of nearly five.

Meanwhile, the cost of a dental filling can vary from €60 up to an aching €200, forcing “dental tourists” to travel to Belfast, Budapest and even South Africa to save money on complex work.

Electricity. This may shock you, but by January, you’ll be paying an extra euro for every €8 you’re paying now. There’ll be a 9% rise next month followed by a probably 3.5% in the New Year. This means that the monopoly ESB has hiked its prices by a staggering FORTY per cent since 2001.

All due to the oil shocks? No, according to the NCC report, which says oil rises “do not justify the high level of price levels for electricity in Ireland” which have always been out of line with the rest of Europe.

Fuel. The entry of Tesco into the petrol market forced pump prices down and showed what true competition could do. Yet some stations are still ripping off their customers to the tune of €250 a year, according to a survey by the Office of the Director of Consumer Affairs (ODCA).

This survey showed that some stations charged 15c a litre more than others nearby. For instance, in one area of north Dublin, the price varied from less than 95c to nearly 109c a litre.

ODCA also uncovered a flagrant practice in which customers were enticed into forecourts by low-price notices, only to be charged 4c more at the pump.

Garbage. Charges for disposing of household waste have soared all across the country. In Cork, charges have risen 380% in the last four years, and in Fingal by 264% (compared with just 9% in Kildare and 45% in South Dublin), giving rise to suspicions that some councils are using it as a smokescreen for general fundraising.

Hotels. In the past year alone, the cost of tourist accommodation has shot up by 10%, nearly four times the rate of inflation. Now, nearly 2 out of 3 visitors feel ripped off in Ireland (compared to just over half in the previous year) and a high-powered tourism action group blames the industry’s “opportunistic price increases” for driving visitors away.

Insurance. Where to begin? With the fact that insurance cover costing €1000 six years ago is now costing €2200 (compared to €1380 in the USA, and €1220 in Finland).

With the fact that only Poland has had larger increases? With the sky-high premiums charged for car insurance (example:€3,419 fully comp for a 22-year-old nurse to drive a Renault Clio)?

With the fact that Irish motor insurance companies have been raking in ten times the profit of their UK counterparts? With the practice of some mortgage providers charging €100 more for home insurance to their own customers, then cynically agreeing to match a lower rate when the customer finds out?

The message from IFSRA is: shop around. It can save you up to 50%.

Jacking Up Prices. Three publicans were left red-faced when an ODCA survey discovered they were jacking up prices for big sporting events. One pub near Croker increased its pint by 20c for a semi-final and two pubs in Galway hiked their prices by 10% for the Races.

Kwik-E Mart. Apu’s famous convenience store in The Simpsons may be fictional, but the real convenience stores in Ireland are charging up to 47% above supermarket prices for some branded items, according to the website www.shoppingbill.com. “If you spend €50 a week in convenience stores, you could be saving anywhere between €1,222 and €1,733 a year by making a trip to the supermarket”, the website advises.

Line Rental. There was public fury this year when Eircom, which has a monopoly on phone lines, increased its line rental to €48 every two months – the third hike in a year, bring us €10 higher than the Euro-average. “The public are angry because the price rise is well ahead of inflation”, said Dermot Ahern. And HE’s the Minister in charge.

Mobiles. Irish mobile phone rates cost more than the EU average on a range of call types, according to the latest NCC survey. This follows an earlier report by Comreg that we are among the highest in the world. Yet the two main networks make huge profits. Other complaints concern the punitive price of roaming abroad and a cost structure nobody can understand.

Nannies. With creche cost running at between €600 and €900 a month, a survey last month revealed that one in every three worker-parents now pay more for childcare than they pay for mortgage or rent. The poll by www.recruitireland.com said parents would be prepared to take wage cuts of up to 30% if they had free childcare. The Central Statistics Office reckons childcare prices have risen by 8.4% in the last year, more than three times inflation.

Overcharging. Not the blatant ripoffs, but secret overcharging. How many times have you checked your checkout receipt to find that the prices are higher than the labels? Since January, ODCA has prosecuted 14 trades. Examples: Jaffa cakes, display price €1.80, charged at €2.89., McVities biscuits, display €1.00, charged at €1.59.

Plastic Money. A report earlier this year showed that some credit card companies borrowed money at 2% and then lent it to their indebted cardholders at up to 18.9%. Nice work if you can get it.

Another survey by Consumer Choice magazine found that the average interest rate of our flexible friends was nearly 40% higher than
in other European countries. They found an average rate of 16.7%, nearly 2% higher than the UK rate.

And that’s before the crippling charges for cash advances and late payments. Then, as we lie bruised and battered on the ground, the Government puts the boot in further with its €40 tax.

Queasy? You may feel even worse when you buy pills and tablets. An ODCA survey showed that a pack of Alka Seltzer costing €2.56 in a chemist was being sold for €3.99 in a convenience store… a head-wrecking €1.43 extra. Last week, another survey by www.shoppingbill.com showed that headache tablets can cost up to 62% more in certain outlets.

Restaurants. Even the Restaurants Association of Ireland admits now that there are a “few unscrupulous players” who overcharge and give the industry a bad name. The fact is that Irish eateries are now the second most expensive in the Euro-Zone, with prices at restaurants, cafes and canteens having shot up by between 3.5% and 8% in the last year alone.

The Fine Gael website www.ripoff.ie has logged such cases as the €7.75 slice of quiche, the €4.50 scone and the €3 cup of tea.

Soft Drinks. We’re No.1 in the Hall of Shame – the most expensive country in the Euro-Zone for non-alcoholic drinks, with mark-ups ranging from 300% to 1000% over off-licence prices.

In Drogheda, a Sunday World reader was recently charged €1.15 for a glass of TAPWATER with a dash of cordial. In Dublin, a Fine Gael survey recorded prices of between €3.40 and €4.70 for a mineral water and lime.

Now one Cork pub, The Bodega, has shouted stop. The pub has cut its price for minerals like Coke and 7Up from €2 to €1.50 and slashed its mixers from €1.90 to €1.45. Will other pubs follow?

Trolley Traumas. We are now top of the Euro-Zone league for food. Our milk, cheese, eggs, fruit, vegetables and potatoes are now the most expensive in Europe. So no wonder many customers are redirecting their grocery trolleys to cheaper stores. There are huge savings to be made from shopping around. Let’s take just one example – bread. www.shoppingbill.com has discovered differences of 350%. “Man shall not live by bread alone – but could save €300 a year to be going on with”, says the website.

UK Stores. Repeated surveys have shown that some UK chain stores are charging their Irish customers more than they charge at home.

Earlier this year, Fine Gael accused these stores of “blatant ripoff” when its survey revealed that a random selection of five products in Tesco was 43% dearer on average than in Britain. There was a 25% mark-up at Habitat and 18% at Argos.

One bit of good news. www.shoppingbill.com, which exposed huge disparities in Tesco’s prices north and south last month, reports that the store has since slashed prices on some of those items.

Vehicle Registration Tax. Not just a rip-off, this is a cause for barricades in the street! A car dealer imports a small car for €9000; the Revenue adds 21% VAT to make it €10,900.

Wash and Blow Up. Customers at hairdressing salons are being clipped in more ways than one. Hair salons were identified as one of the worst culprits who hiked up their prices during the euro changeover (prices rose by a fifth within a few months) and they’ve kept going up. Charges have soared 5.3% in the last 12months alone.

A wash, cut and blow dry that cost €23.51 in 2001 is now €30.40, a rise of 29% in three years, and prices in some Dublin salons are much higher.

X-Box and other games consoles. Like many electronic devices, they cost a lot more in Ireland. A survey by the European Consumer Centre calculated that savings of almost a sixth could be made by buying abroad, even taking delivery charges into account.

Young Voters. Voters in their late teens and 20’s could hold the key to the future of the next government. They may not forgive such price rises as the increase in college registration fees (up 15% to €750 this year, following following a 70% increase two years ago), the rip-off in cinema tickets (up 4.3% in the last year alone), and entry charges to a nightclub-disco (up by a mind-numbing 27% since the euro).

Zero Tolerance. Have customers decided they’ve had enough? More and more customers are voting with their feed, abandoning pubs that charge ripoff prices and boycotting ripoff restaurants. Meanwhile, hundreds of disgruntled customers are making their voices heard through websites like www.valueireland.com, www.ripoffireland.org and Fine Gael’s www.ripoff.ie, and seeking better value with the help of price survey websites like www.shoppingbill.com. It may not be the end of Ripoff Ireland…but it could be the beginning of the end.

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Many are paying bills ‘blind’

The Irish Independent
Orla O’Sullivan, December 2nd, 2004

AT least one in six people pay their bills sight unseen – despite admissions of overcharging by 11 Irish companies this year alone – according to survey results shared exclusively with Your Money by Diarmuid MacShane, who runs the website www.valueireland.com.

Of 200 respondents to the survey, run online from October 1 to mid-November, 7pc said they never bother to check any bill, Mr MacShane said.

Another 8pc of the 200 respondents agreed to the statement: “I pay by direct debit and don’t know what I’m paying.” In reality, says, Mr MacShane, “I would think the number of people who pay their bills without looking at them is higher than 15pc because visitors to our site tend to be more aware consumers than the general population.” www.valueireland.com, a forum where consumers share their experiences of good and bad value received, gets about 5,000 visitors a month.

Separate to the survey, Mr MacShane reviewed media coverage this year, and found 25 reported incidents of overcharging by 11 companies. “There were 900,000 customers affected to the tune of €42m.”

These include the highly publicised cases involving Allied Irish Banks, National Irish Bank and mobile operators, O2 and Vodafone, plus others involving businesses such as Eircom and Esat BT. In total, 42pc of respondents said they do not check every bill they receive. Some check only certain bills from certain companies or individual bills with which they take issue.

“How can people expect the Government to help them if they don’t help themselves by keeping watch over their payments, especially when they’re dealing with companies that have been known to overcharge?” he asks.

There were also three reported incidents of companies undercharging their customers: NIB and its credit card customers; AIB and some student/graduate charges; and ESB, which will start to collect an average of €120 from each customer undercharged.

“We don’t want to be too negative,” said Mr MacShane, formerly a business analyst for investment banks. “If consumers focus on spending money with companies that offer good value, then those companies will prosper.”

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National Irish Bank – Credit where credit is due

I mentioned previously on the blog that as well as complaining any time we as consumers receive poor service or poor quality goods, we should always make sure to praise excellent service and goods.

Therefore, I’d like to both slag off and praise National Irish Bank customer service at College Green (and just slag off the NIB telephone customer service).

On 4 occasions, twice by phone and twice calling into the branch, I tried to get a regular savings account set up and to have it associated with my current account in my internet banking set up.

On each occasion, including once by my “specialist advisor” I was told that I couldn’t do this either over the phone or in the branch. Their process meant that I would have to be sent out some paper forms to fill in from their operations centre, in Belfast I think. This documentation never ever arrived.

This afternoon I went into my branch again and asked the same question. “Certainly Sir” was the immediate response. Within 20 minutes, it was all done and I had a new savings account.

I expressed my gratitude to the very nice lady who’d helped me out. I also explained why I was so grateful given the previous fobbing offs I’d received. Poor lady didn’t know what to say, but managed a surprised sounding “thank you” as I left the branch.

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National Irish Bank – confusing message?

I saw a leaflet recently for a new investment from National Irish Bank. The top of the leaflet says that the bond is 100% capital secured, while the bottom says that you may get back less money than you put in. Sort of conflicting messages there.
I realise that the IFSRA (now part of the Competition and Consumer Protection Commission CCPC) may require that at least the bottom message be placed on all financial advertising – but in this case, surely it can only add to the confusion for consumers rather than clarifying things.
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Bank Switcher Code

I changed banks recently, and despite the supposed ease with the Switcher Code, it’s been an absolute pain!

I’m now on the second month since changing, and for the second month my mortgage and mobile phone bill hasn’t been correctly taken from Direct Debit.

I was with Ulster Bank, and I’ve moved to National Irish Bank. Apparently, the fault was with Ulster Bank since they told all my direct debit payment companies an incorrect new account – so, though each company knew to go to NIB in future for payment, they were looking to the wrong address.

Ulster Bank have acknowledged this, and refunded me charges I incurred because of missed payments.

But still, a second month now where I have to manually make payments where Direct Debits should be doing it automatically. Ridiculous!!!

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Teaching consumers to suck eggs

Some advice in yesterdays Irish Independent from Michael Kilcoyne of the Consumer Association of Ireland. The article, Beware of hotel minibars fitted with sensors, detailed how some hotels were using sensors in their minibars to determine if people were using the highly overpriced items provided there-in.

One of my good friends actually used to work for a company that sold and install such systems in hotels. As alternatives, hotels either have to work according to the “honour system” and trust that people will own up to what they use, or send staff around to each room before people checked out to see what was being used.

Based on recent coverage (which I can’t find at the moment) where Irish consumers admitted that they wouldn’t normally return money if they were given too much change in a shop, you’d have to wonder how many people would fully admit to what they’d used in a mini-bar. And obviously hotels would reckon that the overhead of sending staff around would be too costly and inefficient. So we’re left with the sensors.

The article claims that even moving items within the mini-bar could incur the charge, and Mr.Kilcoyne tells customer not to pay for anything that they haven’t actually consumed. I would have thought that that’s standard practice. He adds that consumers should to check their bills to make sure they’re not charged – and to question any issues.

Maybe better advice would be to stay away completely from mini-bars where items are usually priced at massively overinflated prices than you’d pay in a normal shop.

Some interesting comments here about mini-bars in hotels.

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