Never get ripped off again
As a nation, we Brits don’t stand up for ourselves enough. From faulty goods and holidays from hell, to bad service in restaurants and unreliable utilities, we’re far more likely to put up with poor products and shoddy services than kick up a fuss. However, you don’t have to just grin and bear it – knowing your rights and putting them to good use will stop you being swindled.
That’s what the Colemans did when their shower unit, bought for £750 on eBay from a plumbers’ merchant, cracked and started leaking just six months after it was installed. The couple contacted Whitmore to complain, but after months no further progress was made. Eventually, they got in touch with Which? Legal Services for advice and were told to make Whitmore aware of their rights under the Sale of Goods Act – that the shower should be of satisfactory quality and fit for purpose.
Whitmore didn’t respond, and the Colemans ended up taking the company to the small claims court for the £2,530 cost of buying and fitting a new shower and cubicle. The judge ordered the company to pay the couple the full replacement and installation costs, plus the court fees of £120.
Don't be taken for ride
According to the Office of Fair Trading (OFT), there are an estimated 26 million consumer-related problems in the UK each year – but despite this enormous figure, the government’s own advice service Consumer Direct only logged around 900,000 complaints last year.
Michele Shambrook, an operations manager for Consumer Direct, says: “Millions of people are losing out financially from substandard goods and services, but very often consumers do have routes for redress. Finding out about your rights is the first step to claiming the refunds, repairs and replacements you may be entitled to.”
So if you’re feeling like you’ve been taken for a ride, here’s how you can stand up for your rights.
1. Financial products
The UK’s financial services industry is to blame for the majority of our money woes, so you need to know how best to solve your problems should you ever be left unhappy or out of pocket.
Bank charges, which are typically charged when we dip into our overdrafts or when our cheques bounce, have traditionally been at the top of the list of complaints. The OFT continues its legal battle to be given the right to potentially cap overdraft fees - despite being given the nod by the High Court and the Court of Appeal to investigate whether charges were fair, an appeal by banks means the House of Lords is now considering the issue.
“Unfortunately, it will be some time before we know once and for all if bank charges are fair or not, so there is little that consumers can do except send in their claim letters,” says Andrew Hagger, a spokesperson for Moneynet.co.uk.
But bank charges are not the only complaints in the financial services industry. Payment protection insurance, which is designed to cover repayments on a credit card or loan should you find yourself unable to work due to illness or injury, has been another bugbear. Not only is it expensive, but it is also notoriously difficult to claim on and has been frequently mis-sold.
Hagger says: “PPI is not obligatory and should not be automatically included in the loan or at the point of sale. If you do feel you need PPI cover, always shop around and compare against prices from an independent provider such as British Insurance or paymentcare.co.uk.”
To make a complaint about your PPI policy (or other financial products) first speak to your provider and if that fails you could take your complaint to the Financial Services Ombudsman (FOS). You can also download a PPI refund template letter from Moneywise.
For loans, finance and credit cards, the true rate of interest must always be clearly advertised, and you must be sent a written credit agreement informing you of your right to pay off the debt early as well as the cancellation policy.
“If you sign the agreement at home you have a five-day cooling off period, but if you sign it elsewhere, such as at a car dealership, be warned that you do not have this right – although you have to be told this at the time,” Hagger says.
Complaining about a disappointing investment decision, however, is a tricky area, because investing is always a risk as future performance is impossible to determine. The key to any successful complaint is the advice you were given at the time.
“You should always be informed of the risks involved and be happy with them, and always be told about any changes to the product,” says Philip Pearson, an independent financial adviser at P&P Invest. “So check all the documents and read the small print. If you’re not happy with the product, don’t sign the forms.”
If a financial complaint ends in stalemate, contact the FOS. Emma Parker, FOS spokesperson, says: “It’s our job to settle disputes. We uphold around a third of all cases and our decision is always binding.”
It’s also important to know that you will only be able to log a complaint about being badly advised if you’ve bought the product through an adviser. If you bought the product directly it will be much harder to make a complaint.
For most of us, choosing to buy or sell a property is one of the biggest investment decisions we make in our lifetimes, so it’s crucial you know your rights before you accept or put in an offer.
Every estate agent is required by law to treat both buyer and seller fairly and with courtesy, and to act in the best interests of both parties. All fees and charges must be clearly explained before you agree to enter into a contract, and every property must be described accurately.
All estate agents must also be registered with an OFT-approved estate agent redress scheme such as the Ombudsman of Estate Agents (OEA).
If you have a mortgage-related complaint, contact the lender or the broker who arranged the deal in the first instance. They are required to acknowledge your complaint within five business days, after which time they have four weeks to give you an answer – if you’re still not happy, your complaint can be considered by the FOS.
3. Faulty goods
Whenever you open your wallet to buy goods and services from a business or company, you have certain rights under consumer law (see below).
Should something go wrong, the law stipulates that you should return items within a reasonable timeframe. This can vary but it enables you to take goods home and try them out. If there’s a fault, it’s important you complain to the shop as soon as possible.
The same rights apply for goods bought online from UK merchants too. You also have the added bonus of a seven-day cooling-off period in which you can return and get a full refund (including the original cost of delivery to you) on any goods you decide you don’t want, regardless of the website’s own stated policy.
“Consumers have additional rights when shopping online. In most cases, these rights allow you to change your mind and cancel your order for up to seven working days after delivery,” says Shambrook. “Check your order when it arrives. If you decide to cancel, online retailers are obliged to refund the full cost plus the original delivery charge, although you may have to pay the cost of return. The law also states that, unless otherwise agreed, online retailers have 30 days to deliver your goods.”
Contrary to popular belief, you don’t need to provide a receipt to pursue a successful claim. “Always try and keep receipts, especially if you’re buying a gift for someone else,” Shambrook advises. “However, proof of purchase such as a statement from your current account or credit card will do.”
Hagger adds that using a credit card to purchase goods and services over £100 will boost your rights further. “Credit cards sometimes receive a bad press, but they are top dogs when it comes to consumer rights,” he says. “That’s because any purchase over £100, (but below £30,000) is covered by Section 75 of the Consumer Credit Act 1974.”
This section provides extra legal protection when you buy goods or services costing £100 or more on your credit card. It means the credit card provider is jointly responsible with the supplier if the goods are faulty or incorrectly described, or the service you receive isn’t up to scratch.
“With UK businesses going bust on an almost daily basis, Section 75 protection can be a lifesaver,” says Hagger. “The majority of debit cards don’t offer this, so make sure you’re not leaving yourself open to a nasty surprise.”
A word of warning, however: always tread carefully when you buy second-hand goods privately, either online or in person. “It’s a case of ‘buyer beware’ for private sales,” warns Shambrook.
Gas, electricity and water companies are obliged to provide you with an adequate service. You must always be billed correctly, and never suffer a disruption in supply or face increased prices without being informed.
According to Consumer Focus, if a utility company fails in any of these duties, you must be awarded compensation. For example, if you’re cut off through no fault of your own and not re-supplied with power within 18 hours, a payment of at least £50 must be made. Visit ofgem.gov.uk and ofwat.gov.uk and search ‘guaranteed standards’ for a comprehensive list of compensation limits.
Remember that your water supplier is not legally allowed to cut off your supply should you be unable to pay the bill.
This does not apply to other utilities, but you must be sent a disconnection letter and given seven days’ notice. Vulnerable people such as pensioners, disabled people and the long-term sick, cannot be cut off at all, providing the utility company is aware of their condition.
All communications services have to provide you with a reasonable standard of service for a reasonable price too. Should your mobile phone or internet be unreliable, for example, you have a justifiable reason to complain. If you have not heard from your provider within 12 weeks, contact the Office of the Telecommunications Ombudsman.
As the credit crunch rolls into a second summer, the holiday industry is feeling the pinch. According to Paul McClean, director of International Passenger Protection, over 30 airlines have failed financially in the past 12 months. “It’s clear the travel industry is facing some of the worst losses in aviation history,” he says.
If you don’t fancy being a victim of a grounded airline, make sure you book a flight or package holiday through a tour operator licensed by the Air Travel Organisers’ Licencing (ATOL) scheme. In the event of more company failures, you’ll either get a full refund or, if you’re already on holiday, the scheme will pay for you to get home.
“However, remember that airlines are not included in the ATOL scheme, so if you only plan to book flights with the airline directly, make sure they cost more than £100 and that you use a credit card for the Section 75 protection it offers,” says McClean.
You have additional rights if you book your holiday through an Association of British Travel Agents (ABTA)-approved travel agent. As its code of conduct is designed to protect holidaymakers and hopefully make sure each trip is an enjoyable one, all holidays booked and paid for must be as described in the brochure. A sea view shouldn’t be obstructed, for example, while hotels in a quiet residential area shouldn’t be on a main road.
Sean Tipton, a spokesperson for ABTA, says: “If you have a complaint when you get to the resort, tell your tour operator or its representative as soon as possible. Nine times out of 10 the problem can be resolved there and then. If it has to wait until you return, video and photo evidence and the names and addresses of other guests or witnesses will help prove your case.”
And remember, if your trip is cancelled, you should be offered either a full refund or an alternative and comparable holiday.
Keeping fit and healthy can be easier said than done, especially if you signed up for a gym membership you no longer use. Every now and again most of us need a trip to the doctor or dentist. However, sometimes things can go wrong, so if the standards of healthcare you receive are below par, be sure to put your case in writing to your local NHS healthcare trust.
“You should receive a response within 10 working days,” says Emma Reynolds, a spokesperson for the Healthcare Commission. “If you’re still not happy, you are free to refer it directly to the Parliamentary and Health Service Ombudsman and request a review.”
Consumer law explained
1. Sale of Goods Act 1979
Whenever you buy goods from a trader, on the high street or online, this law sets out that the goods should be of satisfactory quality, as described, clearly priced and fit for their purpose. If something goes wrong, you may be entitled to ask for a full refund, compensation, or a repair or replacement.
Although you have full rights under the Act when you buy second-hand goods, you must consider the price paid and, if necessary, be prepared to lower your expectations about its performance. If the item is in a sale, check that it is not reduced due to a fault, in which case you cannot ask for a refund. You forfeit these rights if you buy from a private individual.
2. The Consumer Protection (Distance Selling) Regulations 2000
This offers protection when ‘shopping from a distance’, such as over the internet or telephone. You must receive clear information from the trader about the goods, the delivery and the price. You can cancel and return the item within seven days.
3. The Cancellation of Contracts made in a Consumer’s Home or Place of Work Regulations 2008
If you buy something from a doorstep salesman, this gives you the right to cancel most types of agreements over £35 within seven days without a penalty. You should always receive a copy of your cancellation rights in writing.
Five steps to making a succuessful complaint
1. Contact the company or business involved as soon as possible and ask it to put things right
2. State your case clearly and keep to the facts. Be firm but polite and be prepared to compromise
3. Keep all copies of correspondence, send all letters by recorded delivery, and note down the name of anyone you speak to
4. Don’t expect immediate results – some complaints take time to resolve
5. If you are unhappy with the decision, an independent body such as an ombudsman can help resolve the dispute
An overdraft is an agreement with your bank that authorises you to withdraw more funds from your account than you have deposited in it. Many banks charge for this privilege either as a fixed fee or charge interest on the money overdrawn at a special high rate. Some banks charge a fee and interest. And other banks offer a free overdraft but impose very high charges for exceeding the agreed limit of your overdraft.
Payment protection insurance is designed to cover you should you fall ill, have an accident or lose your job and can’t make repayments on loans or credit cards. However, research by consumer watchdogs found the cover to be overpriced, filled with exclusions (policies exclude self-employment, contract employees and pre-existing medical conditions) and were often mis-sold because the exclusions were never fully explained. In May 2011, the High Court ruled banks had knowingly mis-sold PPI and ordered them to compensate around two million consumers.
Small claims court
Courts that sit in England and Wales (Sheriffs Court in Scotland) and used by the public to resolve most consumer and personal-related disputes. “Small claims” refer to action where the monetary value involved is £5,000 or less. You can claim for faulty goods or services and even for wages owed and also bring a personal injury claim, as long as the value is under £1,000. You can also use small claims court if you’re a tenant claiming against your landlord for repairs that total less than £1,000. It’s worth noting that, even if you lose your case, you won’t have to pay the other side’s costs.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.
Everything you own: all your assets (property, cars, investments, savings, insurance payouts, artwork, furniture etc) minus any liabilities (debts, current bills, payments still owed on assets like cars and houses, credit card balances and other outstanding loans). When you’re alive this is called your wealth; when you’re dead, it becomes your estate.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.
The period of time you’re allowed, after signing an agreement, to cancel it without incurring a financial penalty. Financial products including banking, credit, insurance, personal pensions and investments are subject to a 14-day cooling-off period (this is 30 days in the case of life insurance and personal pensions). The insurer or broker must refund any money paid by you within 30 days, although it has the right to deduct a reasonable admin charge, and a sum proportionate to the number of days’ cover you had. If you have any related credit agreements, these will also be cancelled.