HSBC - We'll phone you back... and other non-events

Like millions of former Abbey National customers I own shares in Spanish Bank Santander. I was disappointed by Santander's decision to exclude UK shareholders from its recent Rights Issue - which offered the opportunity to buy more shares at the lowest price for years. But Santander did write and explain why, sold our rights for a reasonable return and sent out a cheque, waiving all their fees.

I also hold Santander shares inside an ISA administered by HSBC. HSBC didn't inform me about the Santander Rights Issue, managed to sell my rights for half as much money as Santander, and hasn't even had the courtesy to write and tell its customers what a terrible return they'll be receiving.

Last Friday I phoned HSBC Invest Direct to find out how much money had been credited to my ISA for the sale of my Santander Rights Issue option.

The clueless HSBC customer services representative took 29 minutes to work out, first that I had forfeited the rights because I hadn't responded to their letter (which I didn't receive) and when I asked for my call to be escalated to someone who understood my enquiry, that my account had in fact been credited with £106 on 6th December for the sale of the rights I'd spent 29 minutes asking him about.

I couldn't fathom why HSBC had sold its Santander customers' share rights half price, so would they look into it and call me back? Yes, Monday promised HSBC.

You know what's coming don't you? You must be an HSBC customer...

Late Monday and not a peep from HSBC. So far they say they sent me a letter (which I didn't receive) and now they promise to phone (and then they don't).

I call HSBC again - this time they promise to call back within 24 hours.

You're already ahead of me aren't you?

Deathly silence from The World's local bank...

36 hours later and I phone HSBC a third time. Finally a senior customer services manager takes ownership of my complaint.

I ask about the missing letter - which apparently offered me the chance to buy shares at the once in a lifetime price.
Were letters really sent out on 15th and 16th November by Royal Mail 1st class post?
HSBC: Yes.
Even though the 16th of November was a Sunday?
HSBC: The Royal Mail collect from us daily.
What about the promised return phone calls?
HSBC: We'll investigate that.
What about the terrible price you sold your Customer's share rights for?
HSBC: We'll speak to our brokers - but it's probably the deteriorating exchange rate.
Why did HSBC decide to try and offer the shares to its clients - even though Santander decided there was insufficient time to contact shareholders?
HSBC: Our T&C require us to use 'reasonable endeavors' to contact clients.
Santander wrote to me twice and sent me a cheque. HSBC failed to contact me not once but three times, sold my rights for peanuts, and didn't bother to tell me. When I phoned for details it took HSBC 29 mintes to work out what they'd done and still can't explain fully what's happened.
Who would you rather hold shares with; Santander or HSBC?
HSBC:I understand the point you're making.

HSBC promise to call again in 24 hours.

To pass the time I look at the Royal Mail corporate collection website. The Royal Mail offer their largest customers a 6 days a week collection service - There is no Sunday collection. I read the HSBC terms and conditions leaflet. There is no reference anywhere to 'best endeavours'.

HSBC make bold claims, but they're not supported by the facts. I wonder where the letter they allegedly posted really is?

When HSBC call back they concede that the letters were actually collected by Royal Mail on Monday 17th November - not Saturday the 15th or Sunday the 16th, but some customers did receive them. I have to take HSBC's word for this, but do you see a pattern emerging? HSBC claim one thing and then when caught out they claim another.

I explain I'm surprised HSBC relies on posting letters on the 17th to arrive on the 18th for an offer which must be taken up (or lost) by the 19th.

We agree to disagree about the pathetic price HSBC's broker achieved for the sale.

HSBC do agree their customer service has been 'bad'. Some further training will take place a result.

HSBC offer £30 to 'more than cover the cost of my phone calls'.

I tell them it's a derisory offer - a single letter to an overdrawn HSBC customer would be charged at £35. I expected at least £100 - the difference between the price Santander and HSBC sold my share rights for.

Many times over the course of several return telephone calls I am reminded that 'some of our customers deal in millions of shares and have frequent successful contact with HSBC's call centre'.

I am also reminded why arrogant banks like HSBC are on their knees.

Tesco - Shelling Out More for Nuts

Yesterday Tesco customer services responded by email to the blog entry I sent Chief Executive Terry Leahy 'Tesco - Relentless Price Rises Not Peanuts'

Further to my previous email, I have received information from our Buyer regarding the recent price increase for our Tesco Value Salted Peanuts.

Unfortunately, the price increases are due to the cost of the raw materials as well as currency issues. The cost of raw materials have increased by 105% since May 2007 and the currency change has had a negative impact of 40%.

These increases were passed on to us from our supplier in April 2008 but we have tried to hold the price as long as possible, which is why the price increase has been applied recently.

So the cost of peanuts - presumably peanuts are the raw material in a pack of roasted salted peanuts - has increased by 105%. Is this true?

I was immediately frustrated by my attempts to verify this statement. When I typed 'peanut price rises' into Google my own blog 'Relentless Peanut Price Rises' came back as the top search result...

Further searches revealed that the price of peanuts in China - one of the main producers - rose by 13% in the first three quarters of 2007, apparently because profits from oil plants in recent years have been lower and so farmers have grown less - widening the gap between supply and demand. The last price I could find for peanuts is March 2007 - $363 per ton.

I'm unable to tell you the provenance of Tesco Value Roasted Salted Peanuts - because the packaging simply says 'produced in either The Netherlands or Poland.'EU labelling laws produce some curios anomalies - as we discovered recently with the contamination of Irish Pork. Meat grown in Ireland but baked into a pie in England means the pie can be labelled British.

So not much luck with the peanut price rise, but what about the 'negative impact of the currency change'?

Like many commodities peanuts are traded in dollars. If Tesco's peanuts are processed in the EU they are presumably bought in dollars and sold in euros. Sterling has sunk 25% against the dollar in the last 12 months and almost 20% against the Euro this year, so combining the 25% dollar surge and 20% euro rise, Tesco's 40% currency change is conservative.

Stand by for further price rises - if the underlying price rise is 105% for the nuts and 40% for the currency. So far customers have escaped with a mere 85% price rise. 145% peanut inflation will produce a new price in 2009 of 49p for a 200g pack of 'Value' peanuts. Watch this space.

The Woolwich and Barclays - Keeping Customers' Cash

Gordon Brown has instructed the banks to pass on the interest rate cuts to their struggling customers - but now the banks are coming up with other sneaky ways of keeping customers' cash.

Just spent 37 minutes on hold to The Woolwich - owned by Barclays Bank - to find out why the recent interest cuts don't appear to have been applied to a Lifetime Tracker mortgage.

Apparently Woolwich do pass on the interest rate cut - but they leave your monthly payments the same - so customers start overpaying the loan.

However for those struggling to meet monthly payments the spare cash is completely lost to them now when they need it most.

Secondly the interest savings don't go back into the economy - as the Government hoped when it pumped in billions of pounds of taxpayers money to save the banks.

Gordon Brown has told the banks to pass on the Bank of England interest cuts - I don't think what he had in mind was 'but feel free to hang onto the spare cash' do you?

If you're a Woolwich customer with a base rate tracker mortgage you'll have to telephone them if you want to have your monthly payments reduced to reflect the new interest rate.

Don't phone them now. At 12.22 p.m today there are 90 calls queuing and a waiting time on hold of over 30 minutes.

Customers are only just waking up to the realisation that their monthly payments haven't dropped and are phoning to find out why.

Has Woolwich drafted in extra staff or written to customers to explain the options? What do you think...In fact they close at 2pm on Saturdays.

At least it's free to call them on 0800 316 5500.

British Gas - The Priority Response Experience

British Gas - Daily Saturation Newspaper Advertising for Priority Response

Yesterday I spent 8 hours in the company of a British Gas heating engineer. Neither of us expected to spend so much time together. Keith explained that BG allows 45 minutes for each job. Each engineer must do 7 or 8 jobs a day.

BG Priority Response scheme offers a fixed price repair of £99 (including parts and labour) in exchange for a monthly subscription of £2 for 12 months. So whether your central heating requires a new pump or a new fuse the repair costs the same. It's a good offer and British Gas is advertising it heavily. So heavily in fact that the engineers in London can barely cope.

If 2 engineers phone in sick 16 jobs go into the backlog - except of course this scheme promises 'same or next day response if you have no heat or hot water', so the remaining engineers must cover the extra jobs.

The engineers who are working, work hard but apparently many are finding the pressure tough going and moving to postings outside London. There are fewer engineers available in the Capital but BG goes on advertising.

Note BG doesn't promise to fix the fault the same or next day. Keith first called on Sunday morning following our Saturday call out, but the job required new parts - a pump, an expansion vessel and valve - and he was scheduled for 2 days off so it was Thursday before the repair could be scheduled.

It proved to be a tricky job when he returned yesterday at 8.45 a.m. testing Keith's 5 years on the job since retraining as a BG engineer. If anyone thought becoming a plumber is easy Keith will testify otherwise 'my knees have gone already' he explained. Unsurprising - he spent 5 hours crouched down trying to fit the new parts inside the bottom of a small cupboard.

Eventually, having drained and re-assembled the system 3 separate times Keith was ready to admit defeat. The valve refused to register the pressure and he had no idea where all the water he had pumped back into the system had gone.

I'm a practical person and I've found myself in more challenging situations than this, especially when it comes to working in teams. Useful as it happens, because I realised Keith needed some extra back-up, which I found a tactful way of suggesting.

British Gas - Team Work

Half an hour later there were 2 more BG engineers in the small kitchen. After almost 7 hours on the job Keith and I were both relieved to see them. The new team sprung into action like a Formula One pitstop crew and had the boiler dismantled, rebuilt and the valve up to pressure within 30 minutes. Crucially they also had heat and hot water pumping round the freezing cold property.

The parts required cost around £360, that's not counting the 10 hours labour provided by a total of 3 engineers but the fee payable was a single fixed price (in this particular case £160).

Of course the price would have been the same for any one of the other repairs Keith had scheduled yesterday - including replacing a timer and fitting 2 insulation panels - much simpler, quicker tasks requiring cheaper parts. Some you win, some you lose. I'd rather this job hadn't taken 8 hours, but I was glad I didn't have to pay for each and every one of them.

British Gas gets a lot of bad press and I've certainly had problems with them in the past. I tried 5 other plumbers before BG on Saturday without success. In the end the fixed price gamble and the expertise of 3 experienced engineers got the heating system fixed. As long as it remains almost impossible to hire skilled trades at short notice British Gas will find customers. All they have to do is find a way of continuing to deliver the service they promise.

Tesco - "Sir Terry Is Out of The Business"

Alarming news about Sir Terry via email from Tesco Customer Services

Last week I emailed my post about extortionate price rises on Tesco Value Roasted Salted Peanuts to Tesco Chief Executive Terry Leahy.

Today, a full 7 days later I received an alarming reply from Yvonne Edmonds Tesco Customer Service Executive:

Thank you for your email addressed to Sir Terry Leahy. As Sir Terry is out of the business, I have been asked to reply on his behalf.

Let's just review that second sentence again;

As Sir Terry is OUT OF the business...

Does the City know about this shock exclusive mistakenly revealed to the author of Adventures in Consumerland? What on earth will the impact on the share price be when it emerges that the CEO who has steered Tesco to become the most successful retailer in Britain (taking one pound in every eight spent on the high street) has left the business?

The email from Britain's Biggest Discounter continues even less promisingly;

I am currently investigating the details of your complaint and will contact you as soon as I have a response.

Could it really be a 'standard' holding email in which Tesco announces that Sir Terry is OUT OF THE BUSINESS?

Sir Terry, if you're reading, I'm sure you'll want to investigate....

VAT Savings My Arse

The new 15% VAT rate = a 4p VAT saving on a £1.89 6 pack of toilet rolls

The Government said this month's surprise cut in the rate of VAT from 17.5% to 15% was designed to encourage us to spend money.

The price changes have been a nightmare for retailers - with Christmas prices prepared weeks ago. Many shops are having to make the adjustment at the checkouts - because they've been unable to alter shelf-edge tickets.

However some retailers - especially those selling everyday items - seem to be exploiting a general ignorance about which products attract VAT to simply pocket the difference.

VAT rules are complicated. Buy chocolate biscuits and you'll pay VAT, buy a cake and you won't. Drink bottled water - and tax applies. Want to wipe your bum with toilet paper? You'll have to pay 15% tax too (although you can wipe it with newspaper tax free - there's no VAT on newspapers).

I bought 18 Velvet Triple toilet rolls (3 packs of 6) at high street chain Savers today. The sign above the display showed the price as £1.89. Another ticket had been added showing £1.87. If you thought this was the VAT reduction you'd be wrong. Deduct 2.13% from £1.89 and the saving is 4p not 2p. Multiply my purchase x3 and Savers has pocketed 6p from the original price it won't be passing on to Her Majesty's Revenue and Customs in tax.

Savers is owned by the same group as Superdrug (A.S. Watson Group).

Next door at Superdrug I brought some Nivea balm on promotion with a 33% reduction over the usual selling price of £4.45. 33% discount is £1.47 producing an offer price of £2.98. The VAT saving to me on this purchase price would have been a further 6p if Superdrug had passed this on in addition to their third off saving promotion - giving a final price of £2.92.

Superdrug's website says 'We are a challenging brand on behalf of our customers'. Superdrug has campaigned for VAT reductions on condoms and sun care products. It is less noisy about the latest VAT cut.

Superdrug aren't the only retailer who have received a 2.5% fiscal boost to their profits. Poundland hasn't reduced it's prices to become 98pLand and 99p Stores haven't rushed to re brand as 97p stores. These chains will simply keep the money they would have handed over in tax.

Many have criticised the VAT cut, pointing out not all the savings will be passed on. Superdrug's saving equals a loss of tax revenue for the Government which we'll all have to repay later through increased taxes.

The Daily Mail reads Advenures in Consumerland

Today The Daily Mail reported the high cost of tinned food - after I emailed my recent blog to their consumer affairs editor. Their report failed to identify exactly why the price of Sainsbury's Basic Tinned Chopped tomatoes has increased from 21p in September to 33p.
Encouraged by the Daily Mail's interest in my price monitoring I emailed my previous post - Tesco Relentless Price Rises - not Peanuts, to Tesco's Chief Executive Terry Leahy.

"Dear Mr Leahy, I have sent you a link to my blog Adventures in Consumerland. I welcome Tesco's comment on the recent excessive price rise of your Value range of Roasted Salted Peanuts. A price hike from 20p to 37p isn't really peanuts is it?"

I've received a standard holding reply, let's see what explanation Tesco has. Yesterday Tesco reported it's lowest quarterly growth figures (2%) for a decade. Commentators are noting that value seeking customers are turning to Asda and Morrisons as well as the German discounters Aldi and Lidl.