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Thursday, 16 October 2008

Consumers Paying For Services That Are Free

In these troubled times, we as individuals must take economics into our own hands - cut costs, repair balance sheets. And so on.

One needless expense is the purchase of complaints handling services from private suppliers when the alternative is free of charge.

Not only does that cost you money, but it also means your complaint may not be visible to the authorities. So there won't be as much pressure on the product provider to cure the problem you're complaining about.

Topical examples include:
  • financial services claims management companies - why pay these guys, when the Financial Ombudsman Service (FOS) is free to consumers? The regulated product providers must pay FOS's fee for handling the dispute. That's an added incentive to resolve your complaint more quickly, and to avoid causing problems in the first place. But, as I've pointed out before, some claims management companies and law firms continue to promote services where the consumer bears the expense. There is even speculation within the industry that some product providers who've mis-sold financial services in the past are either starting up claims management companies or selling lists of affected consumers to them in order to profit from curing the problem they helped create. Your first complaint should be the product provider. But, if you aren't satisfied, then FOS is your best bet. Going to the media might sound attractive, but you shouldn't have to bear your soul in public to get a private financial matter resolved.
  • call blocking services - sure, cold calls are annoying - especially those from an automated calling system that fails to connect anyone when we pick up the phone (known in the industry as "silent calls"). But rather than pay for a blocking service, the best solution is to help ensure the people using these systems get named, shamed and fined. That way, it's the perpetrators who will demand - and pay for - the improvements in technology that stops this happening, not you. So, before you pay for one of these blocking services, complain to Ofcom or the Information Commissioner. The Ofcom policy on the subject is here. You'll be comforted to hear that Ofcom fined Barclaycard the maximum fine of £50,000 for breaching the rules on silent and abandoned calls last month. It may not sound like much, but it will end up saving you money on a blocking service.
We all whinge when the Government doesn't act. But we only have ourselves to blame if they do act and we don't take advantage - and end up paying for it.
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