Money News: OFT forces supermarket sites to clear up price confusion

Consumers who buy groceries online will benefit from clearer pricing after intervention by the Office of Fair Trading (OFT).

Asda, Sainsbury's, Tesco and Waitrose (and the latter's online arm, Ocado) have agreed to improve the price information they provide on the internet after customer complaints that grocery charges on delivery were different from those advertised.

The supermarkets (although not Ocado) use only "guide" prices on their websites to show the costs of goods in-store on the day the order is placed. In most cases, the actual prices customers pay are those in-store on the day when the goods are dispatched. Since prices may change between dates of order and delivery, consumers often end up paying more than expected.

The OFT says the supermarket websites did not make it clear enough that the prices shown were for guidance only. Nor did consumers understand how these prices related to actual delivery prices. The four supermarkets have agreed that information about how guide prices work will now be displayed more prominently; special web offer prices will be treated as firm within an "offer" period; and shoppers will have easy access to terms and conditions.

Waitrose also agreed to introduce clearer pricing for goods sold by weight (such as fruit) on its Ocado website. However, the OFT found that all other prices advertised by Ocado matched those on delivery.

Energy bills

Npower deepens consumer gloom

Fuel bills for six million npower customers will rise next week, for the second time since the start of 2006.

From 31 March, customers will pay an average of 15 per cent more for gas, and 13.4 per cent extra for electricity.

The increase comes just 10 weeks after the hikes on 1 January - 14.5 and 13.6 per cent for gas and electricity respectively.

Npower blamed the rises on higher wholesale prices. "The cost [to the company] has trebled since 2003," said npower managing director Kevin Miles. "We delayed our price increase for as long as possible."

The hikes will add £114 a year to the average npower household energy bill, according to SimplySwitch, the price-comparison service. "This increase is the latest in a round of price rises from the six big energy companies," said spokesman Alistair Tillen.

"Npower didn't increase its prices in 2005, which may explain the need for this second rise. Despite this, customers' bills have gone up by 53 per cent for gas and 44 per cent for electricity since January 2004."

Adam Scorer, at the consumer body Energywatch, said npower's customers would be "staggered" by the latest increase.

"There's barely been time to draw breath from the last one," he added.

Fixed-rate mortgages

Lambeth walks from 'best buy' deal

Overwhelming demand for a competitive two-year fixed-rate mortgage from Lambeth building society forced the lender to pull the deal just a day after its launch.

The table-topping 4.25 per cent fix available last Monday was closed off to new business at 5pm the following day.

"We set aside £10m for this deal - [a sum] that usually lasts a couple of weeks. But it was far more popular than we expected, so we had to pull it early," said spokesman Nick Bayley.

Brokers weren't surprised by the abrupt withdrawal of the deal. "This is an unusually short time for such a product to be on the market," said James Cotton from London & Country. "But it was a very competitive deal."

Earlier this month, Portman building society announced plans to take the Lambeth over, in a deal expected to be completed in September.

The merger will generate a bonus of at least £400 for each of the Lambeth's 70,000 members - if they vote the deal through.

Mr Cotton stressed that borrowers who got the 4.25 per cent fix picked their time well.

Cheap two-year fixes are likely to disappear for a while, he said, as the cost of "short term" money - the rate for lenders borrowing from each other - began to rise last week.

Britannia building society increased its two-year fix by 0.6 per cent to 4.89 per cent on Friday "to reflect the rising costs of offering these loans", said spokeswoman Lise Bulloch.

Countdown to the housing shake-up

A timeline for the introduction of home information packs (HIPs) on 1 June 2007 has been unveiled by the Office of the Deputy Prime Minister (ODPM).

A huge publicity campaign begins next month, ahead of pilot trials involving solicitors, estate agents and lenders in June this year.

By autumn, a certification scheme for the newly created army of government home inspectors, who will compile the sellers' packs, will be launched.

Finally, in April 2007, the ODPM will pay for a high-profile public-awareness drive.

The Government believes HIPs will do away with buyer costs for surveys and legal fees when deals fall through after structural problems emerge late in the day.

By speeding up the buy/sell process, there will also be less opportunity for gazumping.

However, critics believe that the lack of valuation within the HIP will force buyers to pay for their own surveys, and increase costs.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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