Questions of Cash: ‘BG left me without heat’: The Independent
Q. I read the problem of the reader left without heating during the cold spell (Questions of Cash, 23 January). I have a warm air central heating system using a gas burner. It is maintained under contract by British Gas Homecare. An engineer called in December because I was worried about its reliability. Initially he decided everything was OK, but after packing everything away, he noticed some wear that had been there for some time and decided the system was unsafe, so cut-off the gas supply, leaving us with no heating. Phone calls to British Gas Homecare were not returned, we were given inconsistent information and we still have no heating! I am now employing my own contractor, who will install a new burner. Whilst I understand an unsafe appliance needs to be disconnected, the service I received from British Gas Homecare is shocking and the result is very costly: I had to buy electric convector heaters, which have been on non-stop since the gas was cut off due to the freezing weather. If I had a boiler that BG provides, I would have been on a fast track system and everything would have been fixed by 23 December. Homecare took my monthly payments, but provided me with an inferior service. WJ, Guildford.
A. British Gas rejects your version of events. It argues that your system was installed over 30 years ago and that your contract does not cover replacement of old systems that become unsafe. It says you were advised previously that the equipment was unsafe, but failed to replace it, and had previously had your equipment turned off as unsafe, which you turned back on yourself. A spokeswoman explains: “Our first priority is to keep customers and their homes safe. On several visits, prior to December of last year, our engineers advised the customer that the thirty year old warm air heating unit was not to current safety standards, due to poor ventilation, and that it would need to be replaced as a matter of urgency. It is only as a last resort that we would turn off a customers heating system at any time of year, but we have to act responsibly in terms of our customers’ safety.” She adds that when you originally signed-up for the service, your boiler was over 15 years old. Customers with a boiler less than seven years’ old are entitled to a free replacement boiler.
Q. I had to call out a BT Openreach engineer to repair a fault on the telephone system in my home. He spent no more than 20 minutes replacing a corroded box in my lounge, yet I was charged £184 plus VAT by BT. This is £552 per hour plus VAT. BT told me this is the standard call-out charge for an Openreach engineer regardless of the time spent at the property, but it appears extortionate to me. GJ, Aberystwyth.
A. BT has confirmed that it carried out work because the box was damaged by damp within the house and had to be replaced. While BT says that you were liable for a standard call-out charge, but this is £125 and you were wrongly overcharged. BT is contacting you about paying a refund.
Q. Vodafone has billed me for cancellation charges on the early termination of my account. But I did not cancel the account, so I do not owe them the money. I suspect Vodafone cancelled the account based on a communication sent before the start of the new contract. The matter is now with its debt collection agency, CapQuest, which has put the matter on hold while I seek to resolve it with Vodafone. I have written to Vodafone stating the reason why I should not be liable for this cancellation charge, but I have not had any response. AG, Nottinghamshire.
A. Vodafone has declined to provide any explanation to us, but as a result of our intervention it has now responded directly to you. You tell us that Vodafone now accepts that the charge was wrongly imposed, has cleared the account and instructed the debt collectors to cease action. Vodafone has confirmed that it regards the matter as now resolved.
Q. On 13 October, my bank account was debited with ten charges of £2.49 by AOL UK Services. This appears to have been a charge for McAfee security, yet I do not have McAfee security on my computer. I switched my provider from AOL to Virgin Media in 2008 so I don’t understand why I have been charged this money, or why it has been done without notification. CW, St Albans
A. The charges were for an AOL Virus Scan Service that you had apparently signed-up to and not cancelled. There was confusion because CarphoneWarehouse purchased part of AOL, but not all of it. This charge came from the part of AOL that was not bought by CPW: consequently attempts at resolving the problem with CPW were unsuccessful. AOL has now fully refunded the charge.
Q. A year and a half ago I responded to a promotional interest rate offer from Alliance & Leicester, investing £75,000 in its online saver account. After six months I received my first interest payment, which was only on £25,000. It emerged that the maximum investment was £75,000. I am not normally careless, but I obviously did not read the small print. Alliance & Leicester refuses to pay me the extra interest. MG, London.
A. As well as contacting us, you also referred your complaint to the Financial Ombudsman – who found in favour of Alliance & Leicester. Given the Financial Ombudsman’s finding, Alliance & Leicester feels its approach has been vindicated. One of the terms of this account was that: ‘No interest will be paid on any amount invested, which is in excess of the maximum investment permitted in the account’, which was £25,000. There is a strong onus on customers to act with care and you admit you were careless. Others may learn from your experience.
Mortgage market gets complicated: Belfast Telegraph
The mortgage market is going through a major shake-up at present, which should encourage borrowers to review their existing loans. And people looking to buy for the first time may find additional and more competitive mortgage products are now on the market.
While this may sound like good news, there is also bad news. One of the UK’s largest mortgage lenders, the Skipton Building Society, has just raised its standard variable rate substantially – from 3.5% to 4.95%. This increases repayments on an interest only mortgage rise by about 40%.
The Skipton is in a difficult trading position currently and has been badly hit by the level of competition for savings from overseas banks, UK government-supported banks and the UK Government’s National Savings & Investments. As well as raising interest rates, it is cutting about 90 jobs – though staff at its Homeloan Management (HML) subsidiary in Londonderry are unaffected.
Nationwide, the largest building society, is in a much stronger position, but it is also raising the SVR on some products that are higher risk for the society – including some mortgages where income was self-certified.
Skipton partly justifies its hike by explaining that its SVR mortgage rates were near the top of the best buy league tables. But they are certainly now some way from the best in the market for either new loans or for existing borrowers: quoted SVRs can differ for new and existing loans.
The Nationwide and its recently acquired subsidiaries the Cheshire and Derbyshire building societies all charge just 2.50% to existing borrowers on SVRs, as does the Cheltenham & Gloucester – part of the Lloyds Group. Bank of Ireland is nearly as competitive at 2.99%. The lowest variable rates available to new customers start at 2.58% from First Direct and are shown in the accompanying best buy tables.
Moneyfacts suggests that borrowers consider carefully the SVR they are now on. “Some borrowers on SVR may have paid more than double for the same mortgage than if they had been with a different lender,” says Moneyfacts’ Michelle Slade. But, she adds, those paying the highest rates may have been forced into doing so because they have insufficient equity in the property to take advantage of the lowest SVR rates.
Despite this, the market is also easing in terms of obtaining higher levels of loans to value (LTV), which will particularly assist first time buyers. According to analysis from Moneysupermarket.com, there has been a 22% increase in mortgages available for an 85% LTV, and an 11% increase in those available for 90% LTV since the beginning of the year. Interest rates have also fallen on mortgages with high LTVs.
Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, says: “Whilst rates are obviously lower for those with a higher cash deposit, it is encouraging to see rates starting to drop across all LTV products.” She warns, though, that Skipton’s hike in interest rates could lead to other lenders doing the same.
With the risk of SVRs going up, more people will consider either fixed rate or tracker mortgages. Woolwich (owned by Barclays) has just cut its tracker rate to 2.63%, which is 2.13% over base rate for life. And the Post Office – whose products are supplied by Bank of Ireland – is offering a 3.49% tracker (2.99% over base rate) for those with a 20% deposit.
However, the rates charged on SVRs have little relevance for many seeking a new mortgage. “Most lenders don’t allow new borrowers to start off on SVR and the few that do have a high SVR,” explains Ray Boulger, of John Charcol mortgage brokers.
“Therefore the choice is primarily between fixed and tracker. A few lenders offer a discount off their SVR, but these deals are uncompetitive compared with trackers. Trackers offer better value, particularly lifetime trackers, than fixed rates at the moment because I expect bank rate to remain below 2.5% for at least three years in view of the dire state of the UK economy and the significant differential of 1 to 2.5% between the initial rate on a tracker and a fixed rate.”
Boulger adds that where borrowers do find fixed rates attractive to provide certainty on future outgoings, long term fixed rates make much more sense than a short term fixed rate deal.
Q. I have paid several hundred pounds to a company that told me it could clear my old credit card debts, as these are legally unenforceable. I am now worried that I have been ripped-off.
A. You probably have been. The Department of Enterprise, Trade and Investment issued a warning in December about this scam. It warned that people were phoning round, cold calling, offering to wipe out old credit card debts in return for an advance fee of £1,000. Without knowing the detail of your credit card contracts it is not in a position to know whether your debt is legally collectable. There is an ongoing legal question of whether credit card companies can collect old debts if they no longer have a copy of the contract with their customers. But it is unlikely that the debt can be written-off unless there are clear grounds for believing that there is an error in the way the debt was calculated; that the person billed is actually liable for the debt; or that the bill is for a service, such as payment protection insurance, that was mis-sold. If you paid the fee to the caller by credit card or by Visa debit card you should request a chargeback to have the payment cancelled and your account refunded.
