If it costs nothing, it's worth very little
Saturday 18 November 2006
Bad news for those still clinging to the notion that there might, after all, be such a thing as a free lunch. Whether it's the internet or your bank, you can no longer take it for granted that anything is gratis.
Free, when it comes to broadband internet services, for example, does not necessarily mean no cost. The biggest-ever survey of broadband users, published this week, warned that the launch of free broadband earlier this year has resulted in a steep decline in customer satisfaction.
The price comparison service uSwitch discovered that while customers are now paying less thanks to the launch of free services such as TalkTalk, from Carphone Warehouse, they're not happy with the quality of what they receive, particularly when it comes to customer support.
Meanwhile, the phone and internet bank First Direct, which for the past 10 years has regularly topped customer satisfaction surveys, has said that 200,000 of its customers will have to start paying £10 a month for their current accounts (see story opposite).
First Direct says it is making this attack on the previously sacrosanct concept of free banking because it can no longer afford to service the accounts of customers with which it does not have a "deep relationship". For which, read customers from whom it does not make money back in one way or another.
These tales suggest that hard-pressed consumers face something of a Hobson's choice; either pay nothing and be prepared to put up with lousy service, or choose a decent deal and accept having to put your hand in your pocket.
The broadband survey, in particular, reminds me of the shocking documentary broadcast earlier this year in which a reporter went undercover at Ryanair. One of the most worrying parts of the programme showed staff dismissing customers' complaints - albeit privately - on the grounds that because they hadn't paid much for their tickets they had no right to moan.
Maybe people shouldn't be surprised when free or cut-price services turn out not to be much cop - or when they suddenly have to start paying for something they really value. But there's no getting away from the dishonesty that underlies the pitch of no-frills airlines, free broadband providers and all the other purveyors of seemingly bargain-basement deals. The claim that customers can have their cake and eat it is nonsense.
In these difficult times, consumers need a stronger voice, so one little-reported piece of forthcoming legislation in this week's Queen's Speech is particularly good news. The Government is to merge Energywatch and Postwatch, the consumer watchdogs, into the National Consumer Council, in order to form a "super consumer body".
The NCC already has an excellent record in taking on financial services companies - it has secured an investigation into the payment protection insurance sector, for example - so an increase in its powers is really positive news.
At the same time, however, it is time for individual consumers to become more sceptical about the messages they receive from companies peddling their wares. As an almost universal rule, if you want something doing properly, you'll have to pay for it in one way or another.
A word of warning about the latest scam to come to my attention, courtesy of Trading Standards officers. They have received a string of complaints about a bogus company known as Parcel Delivery Service (PDS), which has been putting cards through people's doors claiming that they have tried and failed to deliver a package.
When you call the phone number on the cards in order to arrange a pick-up, you'll automatically be charged £15 - and naturally there was never a parcel in the first place.
The Royal Mail and Icstis, the premium-rate phoneline regulator, are now investigating the fraud, which originates from Belize. But until they close the company down, look out for its calling cards.
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