Tag Archives | The Irish Examiner

Gift voucher proposals not worth the effort – New Consumer Protection Legislation (2 of 5)

Department of Jobs, Enterprise and Innovation has proposed some useless changes to consumer legislation around vouchersIn my summary blog post recently (Consumer Protection Legislation – some good but some pointless changes proposed) about the May 2015 announcement of some extensive changes to consumer rights legislation announced by Minister for Jobs, Enterprise and Innovation, Mr. Richard Bruton, TD, I noted that I expected that the greatest impact for consumers would be those impacting gift vouchers and the 30 day refund period for faulty products.

And not by accident, those changes would likely have the biggest impact on retailers, endangering their enactment at all.

30 Day Refund

For me, of most interest proposal which will provide for a standard 30 day period in which consumers can return faulty goods and get a full refund. This would be huge for consumers if it was to be enacted – the current hazy legislation regarding “refund, repair, replace” which leaves it down to the retailer to decide which remedy to apply, and over an undetermined time period, is probably one of the biggest bugbears and cause for confusion among consumers.

It will be interesting to see if this does go through as it likely to be rigorously opposed by retailers who hide behind the existing repair / replace options within consumer legislation to ensure they never have to return money to consumers for crappy products.

It is likely also to generate some comic conversations where within 30 days of purchase, retailers will try to justify how a clearly broken product is in fact operating exactly as it should.

Your smartphone won’t connect to the mobile network? Well, that’s the new thing – this is actually really supposed to be viewed as a Wi-Fi phone. Yes, that’s right, there are the Wi-Fi tablets already, so obviously the next step is Wi-Fi phones.

Developments and progress towards implementing the proposals here, and whether or not they’ll eventually be watered down before passing into law, will be worth monitoring.

Rights by Proxy

The new proposals includes somewhat innovative clause that would allow consumers who receive products or services as a gift be entitled to the same rights as if they bought the product or service themselves.

When I say innovative, maybe I should have said “makey uppey”. I’ve no legal background but I’m not sure that creating such a right by proxy would be very easily achieved.

More importantly, I’m not sure we really need such a new right to be provided to gift recipients. Existing consumer rights can handle such scenarios perfectly well without providing such rights by proxy.

Gift Voucher Changes

As I mentioned in my original blog post, I think these are mainly included in the proposals for their headline grabbing capacity, and the proposal is largely futile in its wish to ban expiry dates for gift cards and vouchers.

Regular readers here will know that I’m not a fan of gift cards and vouchers. You can read here my thoughts on why you should avoid gifts vouchers and instead, gifts could and should be much better thought out rather than plumping for the gift voucher catch-all.

I accept that, yes, this new legislation will remove the danger of voucher expiry from that list of dangers, but many other will still remain – and many cannot be mitigated through legislation.

Buyer should still always beware

The Irish Examiner Survey Says 46% of consumers don't check voucher termsAs in most things, the first line of protection for the consumer is the consumer themselves – which was always the case anyway when it came to expired vouchers. This article from the Irish Examiner [Survey: 46% do not check gift card conditions] highlights research carried out on behalf of the National Consumer Agency (NCA) [now the Competition & Consumer Protection Commission (CPCC)] which indicates that almost half of people receiving vouchers or gift cards as Christmas presents do not check the conditions of use.

Worse, consumers in many cases won’t even use their gift vouchers, never mind read the terms and conditions. According to estimates in this US article [1$billion in gift cards goes unredeemed], at least in 2007 up to 10% of all gift vouchers purchased were never redeemed. Whereas this article [Half of us have left gift vouchers expire] tells us that further National Consumer Agency (NCA) research has found that 48% of Irish people let gift vouchers and cards expire.

If consumers in general were to read the terms and conditions of their vouchers, and were to actually follow up and spend those vouchers in a timely manner, then we’d have no need for this legislation. In fact, in this view, even the vice-chairman of the Consumers Association of Ireland (Mr. Michael Kilcoyne) and myself are in agreement. In a recent article, Mr. Kilcoyne is quoted as saying:

But all the legislation in the world is no use if we, as consumers, don’t shop around and get the best deal for ourselves.

Rare wise and useful words. Next up, I’ll write a little more on what I think would be potentially the most beneficial proposal for Irish consumers – the automatic right to a refund within 30 days of purchase for faulty products.

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Will “naming and shaming” financial institutions make any difference to their behaviour?

Short answer, as I wrote about in detail back in 2010, Are Irish business so brazen that “naming and shaming” doesn’t matter any more?, is a big fat resounding no.

This topic has been around for a number of years now, and still the proposed “naming and shaming” powers have not been given to the Financial Services Ombudsman. The Ombudsman, Mr. Bill Prasifka was on the RTE “This Week” programme back in March when he reiterated a call for his office to be granted powers to release details of complaints against individual banks.

In the interview, Mr. Prasifka specifically said that:

Making the complaints record of individual banks public would influence how they behave.

Earlier this month in response to this call from Mr. Prasifka, it was reported by the Irish Examiner that he would soon get his wish. According to the article, Minister for Finance Michael Noonan will, on April 24th:

Bring forward an amendment at committee to provide the Financial Services Ombudsman with the power to name, in certain circumstances and subject to certain conditions, financial service providers about whom the FSO has upheld complaints.”

Never mind that the “certain circumstances” and the “certain conditions” will probably water down any proposals to a status of “let’s make it look like we’re doing something without actually doing anything”, I don’t believe, as I argued in 2010, that this will make any difference to how financial institutions will behave.

As I said back then, taking Allied Irish Banks (AIB) as a case in point:

Last week, I wrote about AIB admitting for the eighth time in 6 years that they’d stolen money from their customers. That’s them admitting to having unjustly taken nearly €34m from over 250,000 of their customers – an average of about €137.50 each. So why does AIB still have 4m customers when so many of them are being treated this badly?

Even with being named and shamed 8 times in 6 years for stealing money from their customers accounts (not to mention the balls they’ve made of their involvement in the property market in Ireland), they still have 4m customers.

How can that be? Do people never learn?

Why now then would any naming and shaming by a captured regulator in limited circumstances as allowed by a captured Minister for Finance make any further difference to consumer behaviour when having money directly stolen from their accounts isn’t?

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Refund.ie – A service that I’d stay well clear of

Both the Irish Examiner and the Irish Independent (three times) have blindly (and misguidedly in my opinion) given coverage recently to a new service called Refund.ie.

Crazily, when the Irish Examiner gave the website publicity, they hadn’t even properly published the website – it was full of dummy text with zero information available at the time.

Refund.ie is a private company, set up to make a profit. However, it is claiming that it will pursue financial institutions in situations where consumers feel they have been ripped off.

According to their website:

Refund.ie is a 100% Irish owned company established to fill a vacuum. Refund will help and encourage individual and corporate entities to pursue legitimate complaints in the area of financial services. Our team of experts will review each case with the aim of achieving a refund and/or compensation. In addition to our financial advisers we have a panel of Solicitors who will enforce our findings through the courts where necessary.

As well as pointing out that Refund.ie is not regulated by the Financial Regulator, it also highlights:

However, Refund.ie takes a commission of 22.5pc of any settlement it agrees with a finanical institution, whereas the ombudsman offers the same service free.
The new company also wants a upfront fee of €242, although this will be refunded if there is a successful claim.

Why on earth would you give your money to an organisation like this? From the Irish Independent article again:

Managing director of Refund.ie John Prout said people were still free to go to the ombudsman if they were not satisfied with the service they received from a claims management company like his.

Or, even more of a ridiculous suggestion:

They could also come to Refund.ie if a claim was rejected by the Ombudsman.

I find it ridiculous that a company think that they can get away with inviting consumers to pay them money to follow up on a claim that has already failed when reviewed by the statutory body responsible for such complaints, the Financial Services Ombudsman.

In my opinion, a company such as this shouldn’t even be given such cheap, easy and unquestioning press coverage. As far as I’m concerned, it’s preying on the fears and insecurities of consumers who may have a certain apprehension about going up against their bank in a complaint situation.

But, much as I have issues with parts of how the Financial Services Ombudsman works, that is what they’re there for – to help consumers – and, shock horror, all for free.

From the Ombudsmans office website:

The Financial Services Ombudsman is a statutory body set up under the terms of the Central Bank and Financial Services Authority of Ireland Act 2004 (Section 16 and schedules 6 and 7).
The Financial Services Ombudsman is a statutory officer who deals independently with unresolved complaints from consumers about their individual dealings with all financial service providers. It is a free service to the complainant.

So, if you have a complaint against a financial institution – go first through their own complaints handling process. (Click here for top tips on how best to approach going through a compaints process with any organisation, including financial institutions).

And if you don’t get anywhere with your complaint by going direct, then go to the Financial Services Ombudsman.

And stay away from companies like Refund.ie.

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More on the fixed rate mortgage holders bail-out proposals

I wrote about this last week, here, and it got a great response with some detailed and thought out comments. Liam Ferguson, who I mentioned in my original post, directed me towards a discussion that was ongoing at the time on the AskAboutMoney.com website on the same topic.

Two comments struck me from what was being said there (one also referred to by a comment on my post):

I was however, shocked and disappointed to read some of the comments from those that feel that I should not get out of my fixed rate mortgage. You are all certainly entitled to your opinion but sadly there was a nasty whiff of Irish begrudgery laced through many of those posts. There is even a smugness about many of the comments suggesting that I deserve the pain that my fixed rate mortgage brings upon me. Some even boast about the prized position of their own mortgage arrangement. Enough said.

And the response:

What pain? Your repayments are the same as they were when you took out the mortgage. Are you telling us that you took out a mortgage you couldn’t actually afford to pay???

Stop whinging. If you want a variable rate, go refinance and fulfil any financial obligations you have to extrecate yourself from yor fixed rate.

There are too many people suffering genuine distress at the moment to worry about your simple case of regret.

There seems, however, to be a growing campaign to do something for these people who took out fixed rate mortgages in the last couple of years. I’m told that the Ray D’Arcy Show on TodayFM is covering this, though I haven’t heard any of it.

This article from the Irish Examiner on Thursday refers to that, and also support for the relief of fixed rate mortgage holders expressed by Dermott Jewell of the Consumers Association of Ireland:

However, calling for the policy to be scrapped in light of serious financial difficulties being felt by bank customers, the Consumers’ Association of Ireland and opposition politicians have called for the banking sector to introduce “some leeway” for customers struggling to cut back on their mortgage expenses.

“We acknowledge that contracts are contracts and that terms and conditions apply, but what we are saying is that these are trying times and the one people who have been helped during this period are the banks,” said association chief executive Dermott Jewell.

“Those penalties — that’s what they are — are very high, they are significant and they need to be acknowledged as such,” he said.

I appreciate that these are “extraordinary times”, but I also have difficulties with these proposals to let people off with their financial commitments – I think the second quoted comment above just about says it all – people on fixed rate mortgages are paying the same as a couple of years ago in a time when other costs of living are falling.

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Consumer Feature

[This article refers to TopTips.ie which I gave up as no longer necessary – instead, you can click on the ValueIreland Top Tips page.]

The Irish Examiner
Fiona McPhillips

There are few of us who haven’t been hit by the recession, the credit crunch and the recent budget.  So what are we going to do about it?  Many consumers have been turning to the Internet for advice on how to manage their money, cut costs and find the best bargains.  Others have joined online communities in the hope of pooling their resources in the quest for a fair deal.

“How to live on less” is one such topic on the parenting site, www.magicmum.com, while www.boards.ie has a message board for bargain alerts and another one for consumer issues.  Financial awareness website, www.askaboutmoney.com, allows users to ask advice of other users on a wide range of financial issues, while another message board, www.thepropertypin.com, sorts the truth from the spin on the Irish property market.

Despite this positive action from consumers, it seems that Irish businesses have not yet stepped up to the mark.  Diarmuid MacShane of www.valueireland.com feels that there has still not been much of a change in how retailers and service providers deal with their customers.  “We’re seeing many gimmicky offers from the big supermarkets recently – points back weekends and money off weekends – but no consistent dropping in prices yet.  You get the impression that many Irish businesses would rather not sell anything at all instead of dropping their prices.”

Instead of putting up with this, consumers are moving away from the large supermarkets in favour of German discounters, Lidl and Aldi, once considered “too cheap” by many.  Web designer, Katherine Nolan, set up the blog, www.lidltreats.com, last summer in a response to the negative media attention the low-cost supermarkets were receiving.  The blog points out particularly good buys and quality products and offers some great recipes for those needing a little inspiration. “When exactly did it become shameful to get value for money?”, she asks her readers.

Only three months on, Nolan feels attitudes are changing already.  “There was a time when people would say that they only went to Lidl or Aldi occasionally or they would sniff about quality and say they never went near the place.  Now they are more likely to boast about how they’ve been shopping there for years and can’t understand why other people took so long to join them.  It’s a badge of pride to be able to point out the best buys and people definitely boast about their bargains.”

It is a view shared by Deborah Hadley at www.frugalireland.com.  “Initially, when people are quite amazed with the savings, they are likely to be quite proud and try to evangelise.  Eventually it will taper off as we all cop on and begin to shop around regularly.”  Hadley shares advice on budgeting, menu planning, supermarket deals and coupon codes.  She explains that, while she could do her weekly shop in Tesco for €250 in one hour, two hours of shopping around at Aldi, Tesco and her local butcher will yield the same results for €100.  Hadley advises calculating potential costs per hour for any shopping trip in order to maximise savings.  “People use lack of time as their biggest excuse but if you put it into perspective, it becomes less valid an excuse.”

There are also substantial savings to be made in both time and money by shopping online.  Keep an eye on online offers, sales and coupon codes at shopping.blogs.ie.

Top Five Lidl Treats:

  1. Chocolate: the JD Gross bars and the Fair Trade chocolate are as good as premium brands and half the price.
  2. Continental meats: parma, salami and chorizo are of very good quality and priced so that they can be everyday purchases rather than luxuries.
  3. Vegetables: good quality, excellent selection and the best organic vegetable section of any supermarket.
  4. Frozen fish: salmon fillets, prawns and breaded fish are all good.  There are often great fish specials such as sea bass, lobster and crab and frozen, ready-prepared fish dishes of a very high quality.
  5. Kitchen stuff: washing-up liquid, dishwasher tablets, surface cleaners, tinfoil, greaseproof paper, freezer bags and refuse sacks are all very cheap and very good quality.

Top Five Value Ireland Tips:

(see also www.toptips.ie)

  1. Read up on the budget – Find out exactly how the budget changes are going to affect you.  If you are going to need more money, work out where that is going to come from.  If you are going to be better off, put the extra money into your savings.
  2. Review your habitual spending – Make sure you are getting the best deals on your home, health and car insurance.  Monitor your electricity and gas usage.
  3. Be vigilant for price rises – Make sure you are not taking the hit when the 0.5% VAT increase kicks in on 1st January 2009.  Any businesses that are trying to pass the cost on to their customers should be exposed and boycotted.
  4. Be aware of your consumer rights – Make sure you know what you are entitled to as a consumer so businesses cannot take advantage of you in their efforts to cut costs.
  5. Get online – As well as consumer-led resources, there are government-run sites that can benefit Irish consumers.  These include the National Consumer Agency (www.nca.ie), the Financial Regulator (www.financialregulator.ie) and the communications regulator, ComReg (www.comreg.ie).

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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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    Overcharging banks – Consumers suffer again

    The Irish Examiner
    Tuesday, November 25, 2008
    Editorial

    A SURVEY, compiled by ValueIreland.com since July 2004, indicates a range of banks, service providers, and insurance companies have been exposed as overcharging 1.6 million Irish customers by at least €623,943,892, over the past four years.

    In April 2005, Bank of Ireland admitted that it had not refunded customers who had overpaid for insurance cover on car loans.

    It estimated that there were a total of 65,000 loans involved in that error. It agreed to refund all the customers a total of €15m.

    In May of this year, Bank of Ireland announced it was refunding about €200,000 to 16,000 holders of child saving accounts.

    The bank has agreed to repay the money after an incorrect interest rate was paid on the savings accounts between May 2003 and February 2008.

    Ulster Bank admitted in August of last year that it overcharged clients by not refunding about 25,000 borrowers almost €4m that they were due on insurance policies after they had repaid loans early.

    Abuses at AIB had previously been detailed.

    Over the past four years, Irish consumers have been ripped off by the banks to an extent that the term bank robbery has been given a whole new meaning.

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    Overcharging In Ireland: Hibernian at it again

    For the second time in 2008, Hibernian Direct Insurance has been added to the ValueIreland.com Overcharging List of Shame.

    As reported in Saturdays Irish Times, this week the Hibernian Direct has had to repay 370 of their customers a total of €16.608, as well as a €45,000 fine to the Financial Regulator. This was because the Financial Regulator determined that Hibernian had broken the consumer protection code.

    According to the Irish Time article:

    The breaches related to the sale of optional extra cover in relation to motor policies sold by Hibernian. The regulator found that Hibernian did not provide all the information required by the code when selling these extras.

    In another case of providential timing, this is the first time in 4 years that the Financial Regulator have fined a financial services company (at least that they’ve told us about) who was found to have unfairly taken (read: stolen) money from their customers.

    It was only last Tuesday that the Irish Examiner highlighted the fact that these companies normally get away free and easy for such actions.

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    Rip-off culture has taken root

    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.

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    Directory Enquiries – Now available via text

    At the start of June I published some research on the ValueIreland.com website regarding the relative costs of the different directory enquiry options available across the different phone service providers.

    This article recently in the Irish Examiner details a new text service which will provide directory enquiries on your mobile. The service is called Text Express and can also be accessed online at www.53939.ie.

    According to the article, Mark Flanagan who is behind the service said:

    Text Express replaces the waiting and expense of phoning premium directory enquiries numbers by providing a text service that costs just 60c as compared to as much as 71c with 11890, 96c with 11811 and 1.14c for 11850.

    As above, this service costs €0.60 per text (though it’s not clear if that includes the operator text cost as well).

    I’ve tried the service a couple of times. I’ve found it most useful when you just need a generic service and don’t really care who you’re going to use, as highlighted in the website – “taxi Limerick” or “pizza Galway”. I did find that trying to find a specific business took 3 attempts to get the number I was looking for.

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