How call centres profit from keeping large numbers of incoming callers in queuing systems
0870 and 0871 phone numbers are used by many companies' call centres and even by some government agencies such as the DVLA. A well kept secret about these numbers is that they cost you at least 150% on top of a normal national UK phone call, which allows the called party (e.g. call centre) to receive revenue for every minute that you're on the phone to them. It therefore benefits a call centre to keep large numbers of callers in a queuing system for as long as possible, as it generates significant revenue for the call centre. It also pays call centres to take incoming callers through a long series of voice menus before they enter a queue, as the extra time taken generates additional revenue out of every caller. You end up paying for this secret revenue stream through a higher than normal call charge. Most call centres deny that they are making money out of your phone calls to their 0870 and 0871 numbers, mainly because call centre managers keep the revenue stream a secret both from staff and customers. Some call centres even claim falsely that 0870 numbers are charged at UK local or national rates, which although true several years ago, could not now be further from the truth. Most 0870 and 0871 numbers simply forward your call to a conventional geographic number starting 01 or 02. Therefore if you want to avoid supporting this scam, insist to companies that they tell you their normal geographic number starting 01 or 02 instead of an 0870 or 0871 number, and then they won't profit from holding you in a queue. You can also try looking up the conventional geographic numbers that many 0870 numbers forward to at SayNoTo0870.com.
See page 33 of the March 2005 Which? report for more information. BBC Watchdog have failed to report on this scam because Watchdog themselves used an 0870 number for viewers to phone in until recently when they realised that this was inappropriate for a consumer related programme. There's plenty more information here about how non-geographic numbers such as 0870 are being abused as premium rate numbers.
UK card issuers charging hidden fees when you use your card abroad
Many UK credit and debit card issuers charge you a hidden 2.75% commission on top of the amount spent when you use your card for a transaction in any currency other than Pounds Sterling (GBP). Most card issuers don't itemise the commission and because non-GBP transactions involve a currency conversion, the commission is easily hidden in the resulting GBP charge without many card holders noticing. The commission (also known as a foreign loading fee) has nothing to do with exchange rates, as the major card networks (Visa, MasterCard, American Express and Diners Club) all use interbank spot rates, and the commission is subsequently added by your card issuer independently of the currency conversion by the card network. There are only a few UK card issuers who do not add this commission: Nationwide, the Post Office credit card and Lombard Direct charge no fee at all, while Frizzell, Liverpool Victoria and Saga charge no fee for transactions in European Union currencies but 1% for all other currencies. The commission is also charged on most debit cards as well as on American Express (2.73%) and Diners Club (2.75%), who both double up as card networks and card issuers. If you withdraw cash, you will also pay cash withdrawal fees on top of any foreign loading fee, so there's a double charge. You're usually better off taking cash than using cards that charge 2.75% commission. Don't be fooled by any perks you may get for spending on your credit card (e.g. cashback, airmiles or points) because the perks you receive are worth considerably less than the extra 2.75% that you pay. Furthermore, although most credit card issuers publish a separate APR for cash withdrawals (because a cash withdrawal fee forms part of the cost of borrowing on the card), most card issuers deceptively fail to publish a separate APR for foreign purchases, even though a foreign loading fee (like a cash withdrawal fee) forms part of the cost of borrowing. Next time you spend £1000 on your credit card on holiday, remember that you have probably been charged as much as £27.50 in hidden commission by your card issuer.
I was pleased to see that BBC News 24 covered this subject very well on 11th July 2004. Hopefully increasing media coverage will bring about an end to this scam.
Unfair discrimination against British consumers
On 15th June 2004, Apple launched its iTunes legal music download service in Europe, with separate services for the United Kingdom, France and Germany. Although Apple iTunes charges €0.99 per track on its French and German web sites, it charges a much higher price of £0.79 per track on its UK web site. There are two possible legitimate reasons for this, but both can be easily disproved. The first is exchange rate fluctuations: since the euro was launched in 1999, the EUR/GBP spot exchange rate has traded between 0.5680 and 0.7253. Based on this range, Apple iTunes' UK price of 79p is between 9% and 39% more than the French and German price. For Apple iTunes' UK price of 79p to equal the French and German price, the EUR/GBP rate would have to rise to the dizzy heights of 0.7980, which is 10% higher than the rate's all time high. Exchange rate fluctuations cannot therefore be a reason for the higher UK price. The second possible reason is VAT rates: whilst VAT in the UK is 17.5%, it is lower in Germany at 16% and higher in France at 19.6%. As VAT is lower in the UK than in France, the UK post-tax price should in fact be lower than the French post-tax price. Therefore VAT cannot be a reason for the higher UK price either. It is likely that the real reason for the higher UK price is simply that Apple think they can get away with it, because of widespread complacency and ignorance amongst British consumers, most of whom are not linguistically capable of using the French or German web sites. Apple's price differentials amount to a partitioning of markets, result in discrimination between European consumers, and represent a violation of the basic principles of the European Union..
At last this hit the news on 15th September 2004 when BBC News reported that the Consumers' Association's have taken action. On 3rd December 2004, BBC News reported that the Office of Fair Trading have referred the matter to the European Commission.
Not widescreen after all
Television broadcasts in the UK are transmitted with an aspect ratio either of 16:9 or 4:3, and television screens are therefore shaped in one of these two aspect ratios. However, nearly all widescreen LCD TVs on the market have an inappropriate aspect ratio of 15:9, a shape that is never used for television broadcasts, DVDs or other media, either in the UK or elsewhere. A widescreen TV should be 33.3% wider than a conventional TV, but the 15:9 LCD screens are only 25% wider. Watching a 16:9 broadcast on a 15:9 screen results in the picture being slightly squashed or in other words, it makes people's faces seem a narrower than they really are. The majority of so-called "widescreen" LCD TVs have 1280 x 768 square pixels, no matter what size the screen is. The maths is simple in that 1280 ÷ 768 x 9 = 15. A small minority of widescreen LCD TVs have 1280 x 720 pixels or 1366 x 768 pixels, which gives them a correct 16:9 aspect ratio. Again, this can be proved in that 1280 ÷ 720 x 9 = 16 or 1366 ÷ 768 x 9 = 16. Instead of pixels, you can also take the exact screen dimensions in millimetres and do the same maths, which again proves that most "widescreen" LCD TVs have a 15:9 aspect ratio. Many of these incorrectly shaped widescreen LCD TVs are falsely advertised as having a 16:9 aspect ratio. It is a mystery why so many manufacturers are producing screens with an aspect ratio that is unsuitable for television broadcasts anywhere in the world, but it is most likely because 15:9 is cheaper to produce that true 16:9 and the manufacturers hope that consumers will be fooled.
Charging you a subscription to use your own video recorder
Sky+ is a very clever video recorder, known in the industry as a "personal video recorder" or PVR. Rather than recording on to tape, a PVR records on to a built-in hard disk, in the same way that your computer stores data. The advantage of this technology is that you can record on demand, without having to find a blank tape. It also allows you to "pause live TV", in that if your viewing is interrupted (e.g. by a phone call), then the PVR can start recording immediately. When you return to your viewing, you can carry on watching from the point where you started recording, even while the PVR is still recording the live broadcast. You may even subsequently catch up with the live broadcast by fast-forwarding through adverts. Many PVRs can also automatically record every broadcast of a certain programme, and Sky+ achieves this by using Sky's free-to-air electronic programme guide (EPG). PVRs are a great idea, and several manufacturers produce them. However, the Sky+ PVR doesn't work unless you pay Sky a £10 per month fee to enable your equipment (or subscribe to premium channels), even though you have already bought and own the equipment. This is despite the fact that Sky+, like other PVRs, is a product, not a service. The Sky+ monthly £10 is on top of any subscription you pay to receive Sky's channels. You're better off buying another make of PVR that cannot be remotely enabled or disabled by Sky. Would you be happy to pay Sky £10 per month for the privilege of using your standard video cassette recorder? Probably not.
Charging a subscription to watch channels that are already paid for by advertising
Top Up TV is similar to the old "On-Digital" or "ITV Digital", but reinvented by a new company with a smaller selection of channels. It operates on top of Freeview, the selection of free-to-air digital channels. You have to pay a subscription to watch Top Up TV's channels, but most of the channels are already paid for by advertising, just as ITV and Channel 4 are. So not only do you pay a subscription for channels that advertisers have already funded, but you have to pay for the privilege of watching the adverts. To make matters worse, the adverts on these channels are at least as frequent, if not more, than the mainstream advertising-funded channels like ITV and Channel 4.
Where comprehensive insurance cover means third party only
Admiral, Diamond, Esure, First Alternative and Direct Line offer low car insurance premiums but their "comprehensive cover" is not quite as comprehensive as other insurers. Unlike other insurers, if you take your car outside the UK (but still within the European Union), these insurers' cover will drop to the minimum level of cover required by law, which usually means third party only, so you could be left with no cover at all if your car is stolen, vandalised or you have an accident that is your fault. Most UK car insurers use the term "comprehensive" to mean the same full level of cover anywhere in the European Union plus Switzerland, but the above insurers think differently. If you want these insurers to give you normal comprehensive cover when you take your car abroad, you have to let them know your exact travel dates in advance and then pay them an additional premium to upgrade your cover from third party to fully comprehensive. This is despite the fact that the insurance risk while your card is abroad will probably be lower than at home (particularly if you live in a London postcode area), so if anything, you should really get a premium rebate rather than a surcharge when you take your car abroad. Surprising, not all of the companies in the Admiral group provide cover below a comprehensive level - Elephant and Bell Direct give the same level of comprehensive cover throughout the European Union and Switzerland, just as they should.
Charging you for calls that somebody else is already paying for
0800, 0808 and 0500 phone numbers are free to the caller because the called party pays for the call. They are a kind of reverse charge number. These numbers are therefore not supposed to cost the caller anything. However, all UK mobile networks charge the caller for calls to 0800, 0808 and 0500 numbers, even though the call is already being paid for by the called party. Orange did not charge their contract customers for calling these numbers until 1st December 2005.