The Financial News You Need To Know with Sarah Pennells – October 2015

Sarah Pennells is a personal finance journalist and the face behind SavvyWoman.co.uk. We think she does a great job at explaining financial subjects in a very clear and accessible manner. You can find her column below where she writes about the latest financial news, and helps you get more from your money.

Energy meter mix up

This week I’ve been involved in the BBC’s Rip off Britain programme and part of that has involved giving advice to people who’ve got in touch. One viewer, Maureen, contacted the programme because her late brother had received bills for over £1,000 for an electricity meter that had been removed.

Even though Maureen had been trying to get this sorted for four months, the energy company didn’t resolve it. Instead, it threatened debt collectors and sent final demands.

This type of mix up isn’t a one off. People do get billed the wrong amount, for the wrong meter, or by the wrong energy company, and when this happens, far too many are fobbed off by their energy company or pursued (sometimes aggressively) for money they don’t owe.

There are several things you can do:

  1. Know your rights. If you’ve sent information to the energy company and given them accurate meter readings, you should be protected by the ‘back billing code’, which means you won’t have to pay for more than a year’s worth of energy if you’ve not received a bill or an accurate bill. If you’re being billed for a meter that isn’t yours, you obviously don’t have to pay at all. If you’re being threatened with debt collectors when you don’t owe a penny, the energy company may be guilty of harassment.
  2. Escalate your complaint quickly if you don’t get anywhere – contact the chief executive’s office (they normally have their own complaints resolution team) and keep notes of who you spoke to, when and what they said.
  3. Use a complaints service or social media to get your complaint noticed. There are several free to use complaints services, such as Resolver. You can also contact Citizens Advice consumer team. In some cases they may be able to deal with the energy company for you. Twitter and Facebook can help focus a company’s mind when other channels fail!
  4. Take your complaint to the Energy Ombudsman if you’re not happy with the way the energy company has handled it. They can award compensation, in some cases and can order the company to write off debts.

Workplace fraud alert

Another week, another fraud. This time it’s one that’s aimed at people working in finance departments in businesses. They are being sent emails that appear to be from their boss, asking them to transfer money.

According to Financial Fraud Action, fraudsters have often hacked the email accounts of staff (generally through web-based services), and they’re sending emails so that the sender’s address looks genuine.

If you work in a finance department and you’re sent an email asking for an urgent payment to be made, check it’s genuine. Do this by speaking to the person who’s supposedly sent it (preferably by phone or in person). Don’t just click ‘reply’ or you’ll be talking to the fraudster.

When did you last write a cheque?

If you’re scratching your head to remember when the last time you wrote a cheque, you could be ahead of time! According Payments UK, we’re likely to write only two cheques a year by 2024. It also reckons that by next year we’ll spend more money using plastic and other non-cash ways of paying than we will with cash.

So, what are the pros and cons of different ways of paying? Here’s my quick guide:

  • Cash – handy and instant for high street shopping and other face-to-face transactions. The downside is there’s no protection if traders don’t deliver the goods or services they promise as there is if you pay by credit card. And if you lose cash, the money’s gone.
  • Cheque – useful for paying traders who don’t accept online or mobile payments and where you don’t want to pay by cash. It takes a few days for the money to show up in your account and you have to pay it into your bank account. From October 2017 you’ll be able to pay in a cheque by taking an image of it on your mobile. If you lose a cheque you may be able to stop it, to prevent it getting paid.
  • Debit card – the money comes straight out of your bank account. You can pay using a chip and pin terminal, or by contactless (if your card is enabled), or online. You get some protection if the company you’re buying from fails to deliver what it’s promised through ‘chargeback’. This means you can ask your bank to reverse the payment. You also can’t spend money that’s not in your account or not in your overdraft facility.
  • Credit card – you get an interest free period (typically up to 56 days), but if you don’t pay off the balance in full every month, you’ll have to pay interest, unless you’re on a ‘0% interest on purchases’ deal. You get legal consumer protection through something called ‘section 75’ if you buy something costing more than £100. If you don’t pay off your credit card in full, it can be an expensive way to shop.
  • Direct debit – you agree to pay a regular amount to a company (such as energy or telecoms) every month, but they can take what you owe. You are protected through the direct debit guarantee, which means that if a company takes money it shouldn’t, or takes money by direct debit after you’ve cancelled it, your bank (and not the company) MUST refund the money.
  • Standing order – you agree to make regular payments to a company but you set and control the amount. You can normally pay by standing order on a monthly, quarterly or annual basis, but you may not be able to pay more or less often.
  • Regular or ongoing card payments – this is a bit like a direct debit but instead of giving your bank account details, you give details of your debit or credit card. There have been some big problems with these payments in the past, in that some people have found money they’ve not agreed to pay has been taken from their cards. The rules were tightened up a while ago and now you can stop the payment either by contacting your bank or the company you’re paying. If more money is taken out after you’ve asked them to stop taking payments, you can get the money refunded.

SAVVY TIP: Be aware that if you pay for something with an online or phone banking payment, there’s no protection if the website turns out to be fake or the company disappears. It’s the electronic equivalent of paying with cash.