CUNNING WHEEZES

[Stanley]

I fear we are going to see more of this 'value engineering' used to disguise the fact that prices are rising. It was pointed out yesterday that the change in Toblerone only applies to the UK..... Ponder on the 'Economic Miracle' and 'the pound in your pocket'.

[Stanley]

It looks as though at least one Cunning Wheeze is coming under attack. The 'Global Restructuring Group' was set up by RBS ostensibly to assist firms who needed to restructure their loans and other financial arrangements. Many such firms have complained that far from being an aid to them, GRG was a scheme in which the bank and the accountants manipulated the affairs of the firms in such a way that they could profit from them. See THIS for some of the detail. I think the situation at the moment is that one of the businessmen who alleges he was driven out of business under this scheme has now got permission to take the bank and the accountants to court.

[Stanley]

Only a minor one but one prevalent cunning wheeze I have noticed is that when manufacturers are advertising battery powered torches they make much of the fact that the LED elements last 'for over 100,000 hours'. Not a word about the legth of life of the batteries! In most of the small ones it is 3 x AAA and they don't last long at all before performance drops off. Most people who read the adverts will home in on what they want to see, 100,000 hours, and they are in for a disappointment!

[Tizer]

This trend towards trying to lock clients in by contract is spreading and I resist it every time.

Well here's an example of `You heard it first on the One Guy From Barlick web site':
Companies intend to trap us all in long-term contracts and subscriptions in the future but it will apply to far more than just broadband, insurance and the like. We will no longer buy a washing machine and own it. Instead we will pay monthly for the machine and at the end of its life (a lifetime as defined by the company) it will be taken away and recycled by the company and replaced by a new machine. If the machine breaks down it will be repaired by the company. This business model will be common for all kinds of products which at present we buy as and when we need them, choosing a retailer and manufacturer. Imagine how difficult it will become to switch to a different retailer/manufacturer. Of course, the business model will be promoted as being beneficial for the consumer - maintenance provided under the contract, disposal of the old machine, no worries, an easy life. But it's a great way for the company to lock in customers.

I wrote the above post nearly two years ago and I'm sorry to say that my prediction is turning out to be true. This morning I heard the boss of the Dixons/Currys/PCWorld/CarphoneWarehouse group getting very excited about their latest big project which is going to make the world wonderful for all of us consumers. The alarm bells rang immediately and I looked at the company's business news web page to check that what I was hearing is true. Prepare yourselves, we are all going to be slaves to the Dixons empire.

What I predicted is exactly what they are developing right now in cooperation with other companies. They are fanatical about wanting to control everything in our homes, with us signing up to contracts with them and their people coming to set up everything interconnected in our houses. The first sentence of their press release says it all: "Two of Britain’s biggest brands have announced a partnership to create a ‘one-stop’ solution that will give customers access to all the support and services they need to manage their homes, from boilers to laptops, dishwashers to wifi." It continues: "The partnership will be able to support all vital service requirements customers may have in the home. It will bring nationwide support to the UK & Ireland through the two brands’ combined customer base of around 10 million households, supported by a 4,000-strong workforce of highly skilled engineers and technical advisers and 1,200 stores. Customers will be able to control connected devices in the home, purchase a wide-range of recommended products, arrange installation of smart thermostats or security systems, get peace of mind cover and help to troubleshoot technical and maintenance issues." Here is the press release: LINK

As I mentioned in my 2015 post, the big companies are desperate to emulate the cunning wheeze used by broadband and mobile phone companies - they want to get us all signed up to contracts. You won't be able to go out and buy your appliances and gadgets from various sellers, you'll be locked in to a company for years on a contract paying monthly rather than upfront or via a credit loan. There will be penalty clauses and fees for terminating a contract early. We'll end up with with issues like the banks having to compensate people for PPI scams. It won't be easy or cheap to switch when you get fed up with poor products and service from the company that `owns' you. They'll agree business deals with other companies until your life is controlled by the one, big syndicate. I'm sorry to sound so pessimistic but we need people to be aware of what's happening and for government and regulators to stop the move towards contracts for everything.

[Stanley]

A thoughtful and timely warning Tiz. I have noted the same trend. If you remember Janet warned me 12 months ago that, using big data, four companies were trying to take over the world. I know that corporate ambition like this sounds unbelievable but remember that Coke publicly announced that their corporate aim was to make Coke a replacement for drinking water.
This is nothing more or less than a con trick. For a financial con trick to succeed the victim has to cooperate by being gullible, ignorant and greedy. For this to work they will have to be gullible, ignorant and lazy. For that reason many will be conned and join in as those traits are widespread in society. At its root it is a mechanism of coercion and control and as such demonstrates yet another area where business ethics have become so degraded that the line between good and bad practice is ignored with impunity. It already operates in the field of leasehold property and there is a very strong movement building to alleviate the consequences of a lease but it has taken a long time to develop.
Another cunning wheeze that is at last attracting wide opposition is the syndrome where an urban incomer to an agricultural community complains about smells, cow muck on the road and cockerels crowing applying urban standards to their new home. The argument that is growing is that the countryside is a factory, not a heritage site. If you build a new house next to a steelworks do you have a case for forcing it to close?
Count me in when the Resistance Movement is formed! To the barricades!!!

[Tizer]

Include in `leasehold property' not just houses but more generally such as cars. Also there is the trend towards hiring rather than buying. Not just car hire, but virtually anything. It's made easier by the webbynet allowing people to search and pay for such items, paying for use rather than ownership. We are told that this is `the way to go', that it's `trending', that it's what the `millenials' are doing and we're supposed to rush in to make sure we are part of this wonderful new world. Now I'm sure there are times when the hiring approach is very useful but we need to keep in mind that the people pushing this paradigm shift are not doing it for our sakes, they are hoping to `get ahead of the market', make their name and make much money. When we buy an item we generally have a grasp of the relationship between its value and its price but this becomes more easily hidden when dealing hiring. Once again, contract will raise its ugly head, terms & conditions will be more important and it will be easier to trick people. I wonder if in the future we'll decide that the latter half of the 20th Century was the high point for western civilisation?

[Pluggy]

Cars are no longer a price to buy, they are a price per month. A good way of reducing the number of vehicles would be removing all those that aren't owned by those driving them.....

[Stanley]

There wouldn't be many on the road Pluggy. Especially if you added those who had no off-road parking place! I don't know how the emergency services get down some urban roads.....

[Whyperion]

We have had rental of cars, washing machines , TVs etc for a long time, not a lot new. What we are getting in some urban new-builds is a tie in to a local CHP (gas) bolier distributing electricity, cost billed by the landlord on 40 year sub contract to whatever energy company they get the biggest kickback from. the consumer cannot choose cheaper/alternate supplier.

[PanBiker]

My sons last two cars have both been leased. He can't afford to buy one outright and pay for the maintenance but needs a reliable car for work. As he is a roaming IT technician with half a dozen schools to visit around West Yorkshire he does a reasonable amount of mileage. It's a bit of a no brainer really. He has an affordable payment each month which is budgeted for which gives him a new car every 3 years. He gets the first 12 months insurance free as part of the deal. He pays for two years of insurance and gets a reasonable fuel allowance on his contract of employment so all in all a good deal. He hasn't had a breakdown since he has been leasing but has put tyres on when required, cars are serviced by the dealer on the manufacturers schedule. He gets an allowance against a new lease based on the condition of the vehicle when he takes it back at the end of the lease period.

[Tizer]

We have had rental of cars, washing machines , TVs etc for a long time, not a lot new.

My concern is less with the old-style renting and more with the new contracts where big companies will want to tie us in for as much stuff as possible and for as long as possible. They aim to control our lives. I'm not talking conspiracy theory here but a simple hard-headed drive to compete to make the biggest profit by controlling the lives of the most people. Why bother with expensive marketing and advertising if you can increasingly bind people to your products and services? Next thing is the company will be forcing you to rent everything from them. Does that ring any bells? Is history repeating itself?

[Stanley]

I agree Tiz that the trend is for companies to try to lock you into a contract and sometimes try to stipulate which insurance company to use. Like you I don't like it!

[Tizer]

While we are on the subject of rental, leasing and the like how about this for a cunning wheeze to screw more money out of people tied into contracts. This news story was in September 2007 but it's only now that many people are trying to sell their leasehold Wimpey house or flat but the prospective buyer is dropping out when their solicitor tells them what's hidden in the lease details - a doubling every 10 years. The wheeze also involves selling on the freehold of the property so you can never be sure who you'll be paying a fortune to in the future.

From `Property News': `New warning on small print' LINK
People buying new flats from developers — and their solicitors — should beware of a new menace. Homes & Property has learnt that a clause is increasingly appearing in new leases, which states that the ground rent, normally a nominal peppercorn amount, is doubled every 10 years. This is set out in dense legalese, over more than one section of the lease, and a lay buyer may easily not realise what they are signing up to. But when Irvin Tarn reserved a flat in a new development at Mill Hill, he did understand — and pulled out of the sale, demanding a refund of his £2,000 deposit. He also challenged the developer, Taylor Wimpey, to explain itself. “Even first-time buyers know about ground rent, but they expect it to be a small and fixed amount, as it has always been,” he told Homes & Property. “But in my case, when I looked through the 19-page draft lease from Taylor Wimpey for a modest flat in Mill Hill, I discovered that the initial ground rent may be only £300 a year — but by 2057 it would be £9,600. “I have since spoken to several solicitors who confirmed that, like me, they had never heard of this, and described it as outrageous. The estate agents involved claimed to know nothing of it, either.” Mr Tarn added: “I think that first-time buyers have enough of a struggle to get on the housing ladder without national companies trying to make an extra profit by burying clauses like these in their long leases.”

Taylor Wimpey responded to Mr Tarn by stating that the rent review clause was “George Wimpey UK policy and is in place on all leasehold developments.” It offered to refund his reservation deposit “as a gesture of goodwill”. David Bridges of Taylor Wimpey said: “Historically, most ground rent review clauses were tied to the Retail Price Index (RPI). But house price inflation has significantly outstripped RPI, and developers are looking at terms and conditions that better reflect this.”
------------------------------------------

At the end of October The Guardian reported:
`The new-builds catching house buyers in a leasehold property trap'
When Clare Budgen bought her first house in Ellesmere Port in 2009 for £155,000 the last thing on her mind was the lease. Taylor Wimpey, the developer, arranged the lease on a 999-year basis, so what could the then 22-year-old possibly have had to worry about? But just seven years later, when she looked into buying the freehold (to enable her to sell the home more easily in the future) she was astonished to find that, first, Taylor Wimpey had sold her freehold to another company, E&J Estates, and, second, it wanted £32,000.
More here: LINK

[Stanley]

Outrageous isn't it but par for the course to slip something like that in via the small print. The only sure way out is to buy freehold! Definitely qualifies as a cunning wheeze.....

[Tizer]

How about this for a cunning wheeze? I'm not too bothered about them collecting data on TV viewing but they should be open about it and ask for consent first. Otherwise, where does snooping stop?

`TV maker unlawfully tracked viewing habits' LINK
"TV maker Vizio has agreed to pay out $2.2m in order to settle allegations it unlawfully collected viewing data on its customers. The US Federal Trade Commission said the company’s smart TV technology had captured data on what was being viewed on screen and transmitted it to the firm’s servers. The data was sold to third parties, the FTC said....The FTC said the data collection began in February 2014 and affected around 11 million televisions. "Vizio collected unique data from each household with a Vizio smart TV that included not only second-by-second viewing information, but also the household’s IP address, nearby access points, zip code, and other information,” the FTC said in a blog post explaining the settlement. "They also shared that information with other companies." It added: "This settlement stops Vizio’s unauthorised tracking, and makes clear that smart TV makers should get people’s consent before collecting and sharing television viewing information.”

[Stanley]

And now your smart household appliance can do the same thing..... Include me out!

[Big Kev]

My sons last two cars have both been leased. He can't afford to buy one outright and pay for the maintenance but needs a reliable car for work.

I did consider leasing but didn't want to commit to 3 years of payments, I can see the benefits though. I traded the Golf in last year (237000 miles was starting to show) against a 2005 Ford Mondeo, it had 90000 miles on the clock so was 'low mileage' for me . It's had a rear wheel bearing replaced in the 12 months I've had it, not bad for 21000 miles. It's in for MOT tomorrow.

[Stanley]

I have always had a basic (and I believe healthy) aversion to any multi page document that ties me down to a contract. There are times when they can't be avoided but if I was buying a car it would be a good second hand one.... They have never let me down but of course I had the advantage of understanding them. I can see why non-mechanical people prefer what they see as 'legal safeguards' like guarantees. I would be with Kev.....

[Big Kev]

The Mondeo is in for MOT today, 2 new front tyres and a bit of flexi pipe to be replaced on the exhaust. That'll do for another 12 months (hopefully).

[Tizer]

There'll probably be a lot more people hanging on to their present cars once they find out about the new road tax rates coming in this April. Any car registered before 1 April, 2017, will continue to be taxed as it currently is and cost its owner the same annual sum in Vehicle Excise Duty. If you own a low emission car like a Fiat 500 TwinAir you'll stay on the present zero rate. But somebody who buys one after April will pay tax of £100 in year one, then a flat rate of £140 a year thereafter. It's all intended to get people onto electric cars but I wonder whether there might be a case of unintended consequences bubbling up here? Most of us won't be buying electric vehicles until the get cheaper and there are more charging points; many won't even be buying them then. So the change in tax could result in a lot of folk still motoring around in relatively high emission cars.

[Stanley]

I am so glad I ditched car ownership.....
One Cunning Wheeze I have noted of late is the standard government response to criticisms about waiting times in A&E which are even worse now. Only 82% are being seen inside the four hour rule. They say that the majority of people are seen inside the limit. This would be true of course if only 51% were seen in less than 4 hours. It leaves aside the fact that 4 hours is far too long and is simply an arbitrary time picked by New Labour when they instituted the rules.

[Stanley]

LINK Have a look at this, Tesco reported as charging more at the till than the shelf price..... Conspiracy or cock-up?

[Tizer]

`Conspiracy or cock-up?' Both, I reckon. Cock-ups occurring but management conspiring to ignore them to their financial advantage. But the BBC reporters must be the only people in Britain who didn't already know all about it from their regular shopping experiences.

[Stanley]

In the days before the rise of the supermarkets when I was Open All Hours the mark up on groceries was 15% and on greengroceries 50% because of the waste. This was supportable because our customers were getting a living wage and our mark up wasn't excessive, it was industry standard and we were not making a fortune! In recent years the relative price of food has been driven down by economies of scale and better distribution and we have reached the point where the margins on normal trading are reducing as the pound slides. The eventual cure for this is going to be higher prices but in the interim the supermarkets are constrained by competition. So the only way to jack up overall profit is by adopting cunning wheezes, hence the increase in dodgy pricing policies. As these are identified and clamped down on, prices will rise, the increases can't be held back much longer. There is a limit to the efficacy of the cunning wheeze.....

[plaques]

I'm not sure if this is a cunning wheeze or just bad luck. As part of our recent redecorations higher management thought that some very fancy glass lamp shades that we had saved from an old chandelier would look very nice. The problem was that they would only take a 22 BC candle bulb. Since we required 9 bulbs of which only two were used with any frequency it was thought, by me of course, that some cheapo's would fit the bill. 20 off were ordered through Amazon-Ebay, Then the problem started. Out of 20 Eveready bulbs 14 went 'pop' on switch on. No problem, refund given immediately. Next with new supplier ordered 10 'Osram', waited two weeks, complained, refund given. Not to be beaten order 20 off of unstated manufacture from a different supplier. To my dismay they were Eveready. Performance 12 went pop! Refund immediate. Bad luck or stupidity take your pick. Don't answer that!