Customers 'offered poor terms by utilities and banks'

05/03/2009

Utilities providers - along with banks - are offering customers "dodgy deals" as the UK economy slides further in to recession.

With unemployment on the rise and repossessions increasing as the credit crunch bites, disadvantageous terms are currently being offered to customers by the firms, the Times reports.

Examples cited by the newspaper include BT's practice of locking customers in to 12-month rolling contracts from April at significantly higher prices than they signed up to last year.

Elsewhere, many UK credit card firms were found to be raising their rates for indebted customers - despite the Bank of England's lending rate having been cut to all-time lows.

Energy firms were shown by the newspaper to be consistently charging customers who lived within their "encumbant area" - ie, locally to where the firm is based - extra, when compared to non-local customers.

Banks were accused of automatically withdrawing money from customers' current accounts if they had other unsecured debts held with the bank, publishing "misleading" headline interest rates and charging "sneaky" extra costs for mortgage customers.

Kevin Still at EuroDebt added: "It is interesting with hindsight for many clients who signed up for fixed rate or capped deals over a year ago whether their decisions proved correct. The window to make switching decisions seems to be very short in many instances with providers requiring formal written notice where clients want to change provider or move to another tariff.

"As always, it is the small print and what happens at the end of the promotional period that catches people out where they may have been lured by the headline offer. It is often the people in financial difficulty that fall foul of the hidden charges and ineligibility criteria buried in the respective agreement. Taking advice can take many forms and this may include ensuring that the right options are chosen before signing on the dotted line or taking advantage of cooling off periods."

Figures from the Financial Ombudsman Service suggest that there will be a 44 per cent rise in customer complaints in 2009.

Tags; Debt Management and Banking, Retirement Money Problems, Credit Card Lifestyle,

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