Question of Cash: Warranty firms are mis-selling cover for satellite repair

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Q. In June I received a letter from Digital Satellite Warranty Cover asking for payment. I was expecting my renewal from my Sky Repair Plan, so I paid the requested £95.99. When I received my Barclaycard statement on July 15, I wondered who Digital Satellite was and I queried it with Barclaycard. I then received my Sky renewal and realised I had inadvertently paid the wrong company and still owed Sky for its service. I contacted Digital Satellite Warranty, which refused to repay me on the basis that it was after the seven-day limit for contract cancellation. DW, Kirkby.

A. Repeated calls to Digital Satellite Warranty were not answered. The good news is that Barclaycard has agreed to refund you the full £95.99. This is despite it having no legal obligation to do so under the Consumer Credit Act, as it is under the £100 protection threshold. We also contacted Sky, which issued a statement to us. "We are aware that Digital Satellite Warranty Cover Limited has been active in sending mailshots to many Sky customers," said the company. "We've received significant levels of complaints relating to this company. These complaints mainly relate to the mailshots, but include some relating to direct marketing telephone calls as well. We know of a number of warranty companies who pass themselves off as linked to Sky.

"We don't think it's acceptable to treat our customers this way and there is no justification for misleading sales tactics. We took a company called Satellite Direct UK Ltd all the way to the High Court and won our case. The judge ruled that one of the sales techniques used by the company was a 'blatant lie', and found the company liable for passing off their products as approved by Sky. We continue to track activities of other companies – including Digital Satellite Warranty Cover Limited – and investigate customer feedback in instances of passing off or mis-selling."

Sky also points out that complaints have previously been upheld by the Advertising Standards Authority against Digital Satellite Warranty and also against another company run by the same directors. Other companies run by one of those directors was successfully prosecuted by the Office of Fair Trading and trading standards departments.

Q. I buy goods regularly from Dublin, usually paying in sterling by cheque. But recently cheques have been lost in the post. As the payments have been large, I decided to pay electronically, arranging this through Barclays. I was told the payment would cost £25 and could take three to five working days. The full amount of £3,330 was deducted from my account the next day, plus another debit of £25 to pay for the transaction. But when the payment arrived in the supplier's account, there had been a deduction of £26.23, which I will have to refund to the supplier. It turns out that Barclays forwarded the payment to HSBC, which imposed its own charge of £21 for processing it. Another £5.23 was deducted by the supplier's bank for receiving the payment. Barclays now tells me the best way of making the payment was by cheque after all. KW, Devon.

A. Barclays is correct with that advice – payments to Ireland are cheapest if made by cheque, though this risks delays in the post. Barclays has now listened to a copy of the conversation between yourself and your adviser in the bank. It accepts that you were not advised that HSBC would make an additional charge for processing the transaction, but this was because the adviser you spoke to would be unaware that this would happen as they could not know that a correspondent bank would be used in this instance. Barclays says that, in the terms and conditions for the payment, it specifies that it will decide how best to transfer a payment and that an additional charge will be made where an intermediary bank is used. Barclays adds that this is common practice in the banking industry.

But Barclays accepts that you were not given a sufficiently full explanation of possible charges. On this basis, it is refunding you the £21 that your supplier has lost and requires you to repay. In future, you may decide it is best to pay by cheque, despite the postal strike. Barclays will also arrange for its call-centre staff to receive additional training.

Q. With the higher ISA savings limit for the over 50s, I can now top up my Barclays Golden ISA. But this is paying only 2.55 per cent, plus an introductory 1 per cent. Can the addition be made only to an existing ISA? Or could I withdraw the Barclays deposit and put the full amount in a new ISA? If so, what are the best rates? Is it worth it? VG, Woodbridge.

A. Whether you can top up your cash ISA depends on when you opened it. The ISA limit for the over 50s has just increased, with the maximum paid into a cash ISA in one year rising from £3,600 to £5,100. If you have already invested £3,600 into a cash ISA this year, then you can top this up. But if you opened the cash ISA account in this financial year, you are not allowed to open another cash ISA until the next financial year. You are permitted to transfer your cash ISA balance to another provider. However, the 3.55 per cent rate you are currently receiving is actually very competitive – and no longer available as Barclays stopped offering it in June. The best rate quoted by Moneyfacts now is 3.25 per cent, from the Chesham Building Society – which includes a 0.45 per cent introductory bonus.

Questions of Cash cannot give individual advice. But if you have a financial dilemma, we'll do our best to help. Please email us at: questionsofcash@independent.co.uk

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