Power At The Speed Of Light

Yesterday afternoon I was sifting the internet and reading the referenced article on the future of energy prices. The news was bad - Ofgem are predicting steep rises anywhere up to 60% over the next 7 years.

To my surprise the doorbell rang as I was reading the very article and once I had calmed the dogs down I found a clean cut, nicely suited young man brandishing an identity card as if he was from the FBI. It turned out he was from npower. I suspiciously looked back toward my PC thinking the worst of conspiracy theories, how could he have got here so fast?

'Hi, I'm from npower and this is my identity card,' he said with a pleasant smile. 'And how are you this cold day? Winter is on its way, isn't it?'

I have read that the power of suggestion is remarkable and an involuntary shiver ran down my spine to confirm it. The coincidence, if it was such, was suspicious.

'What are you doing here?' I asked warily.

'To save you money on your energy bills, as I have done for....' he reeled off the names of all my neighbours, even the two people I knew were away in Majorca and Ireland respectively. It made me fear the worst and I envisaged them tied up in their lounges, gagged and unable to call for help having been forced to sign a new power deal. Either that or he was lying about speaking to them.

'Prices are set to rise,' he continued. 'You probably would want to protect yourself against such rises and by signing up with npower you can not only protect yourself from those rises but we guarantee a saving on your current bill. You couldn't refuse an offer like that, could you?'

The last bit was delivered with a smile but it sounded a mixture of mafia-style threat and the suggestion I must be stupid if I refused. I panicked.

'I'm only the janitor,' I blurted out. The chap looked bemused.

'This is this address,' he said pointing to his clipboard. I nodded it was pointless lying, he knew everything - he even had the number of my gas and electric meters down there. 'You are Nigel Dunn, aren't you?' It was an obvious threat - deny it and I would disappear like my hapless neighbours. I caved in, bowing to his superb interrogatory techniques.

'I am,' I said.

'Good, got that sorted,' he smiled again. 'A lot of people think we are trying to sell something and so fib. But I am not selling you anything.'

'What would you call it then?' I asked. It just came out, I don't know why I said it. His face seemed to darken for a second.

'No, people only think we are salespeople,' he smiled, his teeth slightly more clenched. 'But we are energy consultants. We are here to help you save money. There is a difference, you know.'

Clearly the debate was over. 'To qualify for the savings now and to lower your current bills and then protect yourself from future rises, all you need to do is sign here,' he continued, pointing to a line next to my name which was currently blank.

'Don't you want to see my bills first and check you can get be lower?' I asked. 'That's what the last guy wanted.' He laughed.

'Of course, but it's just a formality,' he said. 'We know we are cheaper than your current supplier, Eon.' It was the last throw of the dice of a desperate man on my part. Then I remembered.

'Wait a minute, we are on a 10 year price capped deal,' I said excitedly. 'I have already signed one of these daft contracts and I am already protected against future rises.'

He suddenly recoiled and almost held up his hands as a vampire might do at the sight of a cross. He shrank back into the shadows and said something about that would be OK then, I had already taken precautions. He did not say goodbye, I just caught a glimpse of him scuttling across the courtyard. I closed the door with a smile, for once I had one over on a door to door salesman. I waited but there was no sound of a car engine and when I looked out, he had gone.

The energy scams are a softer sell than they used to be. Having been persuaded by Eon some time ago to put both gas and electricity with them, I signed a ten year price cap deal. Some quarters later I saw a man wandering around the courtyard with a clipboard and identity tag around his neck but he did come near my house. A few days later I got a shock as Eon had claimed to read my meter and after several estimated bills previously they found I now owed them a lot of money - hundreds of pounds which they were going to charge me for.

I noticed that the estimates carried back to beyond when I signed up and there was something strange about the sudden rise in the number. I went outside and checked the meter and the number I saw on the gas meter was far, far lower. I called and they said that they had read the meter and we checked the dates which appeared to be the day I saw the chap wandering the courtyard. It was meant to be the guy who had read the meter. Even though it was now patently obvious he had not read the meter, they then said that legally they were required to read it only once every two years and in between it was my responsibility to check the estimates were right or wrong. I pointed out that the estimates went back to before when I swapped over and they said that was still my responsibility.

Call Centres are a dreadful invention. You ask for an escalation of the problem and you are stonewalled and if you are very lucky you get to speak to the daily supervisor who repeats the same message in more firm tones, being careful to speak exactly when you speak to drown you and then accuse you of talking over them, then ending the call as they did not need to take that kind of attitude or abuse even though you had not said anything. In most cases, the matter ends there as there are no obvious ways of raising this to management. Customer Services may be a number on the bill but you end up in the same place and if you are very lucky, someone who may take a few days to get back to you and then say exactly the same thing again. It happened here and it made me more annoyed. I felt I had been sold a pup as when I told them that I was on a 10 year capped deal and on the bill it said my prices were rising, they outright denied I had signed anything of the sort.

My only recourse was to write in and make my complaint official. I did so and to my horror, for some reason they raised the bill again with some excuse about the readings. At this point the red mist descended. I rang and asked to speak to someone with a title of Director. No chance, such people in many companies today never, ever take calls from customers. It's in their contracts and they are defended by an army of call centre operatives, customer support goons and highly trained receptionists who are automatons who simply say, 'Directors do not take calls.' Not even from their spouses, I suspect.

Years of sales experience kicked in. If there is one thing a salesperson can do, it is to get around gatekeepers as we call them. The first step is to do your research and the internet is so handy for that. Take a look at their website or Companies House and get the Board Directors' names. Then use several permutations of nomenclature of potential email addresses and send a well written email, without anger but with a slight implied threat. The threat I used was 'misselling' and Ofgem were mentioned too.

I got a reply from the CEO's PA within a day. Profuse apologies, they were a special task team who handled complaints to the CEO and my case was being reviewed. I called and spoke to the lady and she wanted to turn it back on me. Then I told her the exact date I had signed the 10 year deal and she suddenly went quiet. The 10 year deal and misselling apparently have some kind of link - it was the magic word. Suddenly all that I had said took on real meaning. Eon should have checked my meter at the start of the contract, that was their responsibility, they should have had a proper reading within 2 years and the chap who came should have done it - of course, she claimed he was an untrustworthy third party worker not Eon. My prices should not have fluctuated and I was not liable to changes in the period I had been with them. In fact, when they read the meter again and sent a new bill - THEY OWED ME MONEY. Further, they even paid me a small sum in compensation - basically hush-money as it was fairly clear they had over-charged badly, not implemented the capping plan, failed to read the meters when they should and there was just a glimmer of a whiff of misselling of the 10 year deal.

I have found such an approach to call centres the only way. I have also had issues with O2 Broadband for business and when I got poor technical service, they moaned it could not be them. Eventually, I did the same and got a reaction form the CEO's PA who personally saw to it the problem was rectified with engineers coming from BT who informed me the practice by broadband suppliers to tell customers to dismantle the sockets to plug the ADSL wire into the ADSL test socket is effectively the exact wrong thing to do and invalidates anything BT does. Thankfully, the guy put it right and my broadband speeds are now acceptable. Again, O2 gave me several free months to compensate when really they did not have to.

My advice, take your complaints to the top. It's the only way you get action. It also serves a purpose and service to these suppliers, as Directors should not be shielded from the real problems in their business and these Directors should take responsibility for poor service.

That's their job.

However, a small amount of empowerment at the Call Centre Operative level would actually remedy most situations without huge cost. That's really worth thinking about for these organisations.

Who Regulates The Regulators?

You know one of the big problems with the whole concept of regulation, whatever it may be for, is that it is a fat cat job with virtually zero responsibility and no accountability.

Of course, Lord Adair Turner of the FSA may tell you otherwise but let's face facts, on his watch 5 high street banks went belly up and more had to be bailed out as he presided over the worst financial disaster since The Great Depression. As if that was not bad enough, he gets to write and implement the new regulatory plans, called Macroprudential Regulation to help us understand it more easily, and these are little different to before.

Meanwhile, some £17m in bonuses have been paid to the 2,500 staff of the FSA while they have also received substantial pay rises of up to 10%. It is a huge price for abject and total failure to the do their jobs.

And while their own snouts are in the trough, the City is right back to its old habits. Not only has the issue of massive profits from high risk deals already raised its head as we still dole out more money for the whole collapse of the little game last time, but also we are actually talking of paying incredible bonuses to City staff just a few months after we all thought the whole concept was both wrong and risky. In fact, it's worse.

The bounce back to profitability by banks was inevitable - they couldn't go down again after we propped them up. So the banks and their traders are actually taking profits on a massive scale on the back of our money, lent to them at virtually no cost, with a blank cheque underpinning any losses they may incur in the future.

In that environment, they cannot fail and they still have the chin to ask for bonuses and the regulator stands back as if this is the way it should be. It is still paying for failure, as some take their employer's to court for bonuses they think they should have earned when they clocked up the losses. We are paying for failure and the bounce back - we must be absolutely stupid. We are - in fact, the City relies on it.

It seems crazy, yet when you delve into what the regulators get out of keeping their heads down and saying nothing in their part time jobs, you get a sense of why it is not good practice to stick your neck above the parapet and criticise the obvious. For one simple reason, other than the obvious rewards, is that each and every one of them are part of the same fabric and system. Lords, Dames, Sirs and the right education and backgrounds and the single biggest qualifier of all, a portfolio of Non-Executive Directorships to prove you can stand the heat and pressure of part-time jobs and know how to make a few bob out of them.

And they do. Lord Turner is on umpteen quangos and whatnot as well as boards - at the FSA alone he earns over £200,000 a year for a few days a month and he even gets that unbelievably wrong. Then you have the other regulators like Lord Mogg at Ofgem where he does a marathon at 3 days a week regulating the energy market. He claimed over £35,000 in expenses last year to do that job alone and that included a £5,300 plus for a first class season ticket and a £5 canteen meal as well as a subscription to the Financial Times. His CEO, Alistair Buchanan, lives in Egham just a few miles from London and the office but he managed to clock up £5,700 for 23 overnight stays in hotels in London amongst his £28,000 of expenses. Lord Mogg gets £145,000 a year for his part-time job, of which this is only one, while Buchanan gets a derisory £260,000.

The story is not pretty at Ofgem as they all are at it. Mogg managed to do £18,765 in travel in 14 months on 30 trips abroad (why??), and that's going some as I travel almost every week to somewhere in Europe and can't challenge that spend. Buchanan's curious 23 nights in London hotels included £826 for just a single two night stay.

The point here is that these bodies are there to supposedly protect us from these industries but in both cases all they do is to consume money and we foot the bills - and they are huge. There seems to be no rules by which they have to work and they can clock up vast expenses, salaries and bonuses without a jot of accountability as there is none required. The FSA stands watching as the City again squabbles over headhunting and acquiring staff with vast new salaries, bonuses, golden handshakes, earn-outs and guarantees to bolster the 'talent' in their trading areas while they cull vast swathes of staff in the only consistently profitable parts of their businesses.

And, yes, we pay for it as it is all funded by taxpayers' cheap money, capital and guarantees and, of course, new cash from Quantitative Easing.

If someone had said 6 to 9 months ago that we would allow all this to happen again then they probably would have got lynched but thanks to the regulators once again being unaccountable and standing to one side to let the industry get on with getting back to normal, we have just let all happen again.

And it may just get worse when it collapses next time. Not until we get wholesale reform and proper regulation in with the right people at the top, who are not part of the system and not just cash sumps, will we actually get some change. And, boy, do we need it.

Nice Work - If You Can Get It

It isn't that caretaking job on Hamilton Island just off Australia's Barrier Reef but it's almost as easy and just as lucrative. It's the role of Chairman at Ofcom. Big job? Nah, it's only part time and a cool £200,000 a year.

Lovely Jubbly

The newly appointed chief at Ofcom, the communications watchdog, Collette Bowe, found herself having to defend herself in front of curious MPs at a select committee who wondered why she should be paid so much anyway and why, in particular, she is only doing the job part time. Not least as we are in the middle of a recession.

Of course, in the secret handshake world of Non-Executive Directors and high public appointments, Ms. Bowe is in the fast track. She will be combining her duties with other lucrative Board positions at Axa Framlington, Morgan Stanley (along with Tony Blair by sheer coincidence) and Electra Private Equity - the sorts of jobs that might just be a little bit more demanding now we are in a global recession, so no wonder she can't put much effort into the Ofcom job.

I would have thought a better argument was that no one has put much effort in before so why are MPs griping - surely these pet positions are just for show anyway?

Ms. Bowe is of the 'Super Power' variety anyway like Gordon Brown as she thinks 'the job is doable in the time commitment'. Mr. Brown may be disappointed to know that Ms. Bowe will be earning more than him for this part time work.

High Salaries Attract High Calibre

Part of Ms. Bowe's argument was that Ofcom needed to pay high salaries to ensure it attracts the highest calibre recruits. Well she would hardly say otherwise, would she? She used to be Director of Communication at the Department of Trade & Industry most notably during the Westland Helicopter affair in 1986 - if memory serves me right I don't think she would have much to be proud of there.

But Ms. Bowe is by no means alone. Hector Sants, Chief Executive at the FSA must be the biggest waste of money at a package of £662,000 in 2008 and Ed Richards, Ms. Bowe's CEO at Ofcom earns a mere £418,000. Meanwhile, arguably one of the hardest jobs right now, the Governor of The Bank of England, earns a paltry £290,000 while John Fingleton CEO at the OFT earns only £270,000, Alistair Buchanan CEO at Ofgem earns a pathetic £250,000 and poor Martin Stanley at the Competition Commission earns a dire £175,000.

By using Ms. Bowe's logic from Mervyn King downwards we have paid peanuts and got a load of monkeys or has she just talked herself up?

Jobs For The Girls & Boys

There is no doubt, once you are in the inner circle such lucrative jobs come your way. A nice stint as a Civil Servant will get you plenty of good spots on Boards and these watchdog jobs are the arguably the cushiest in the industry. Not because they should not be hard but because the incumbents offer no insightfulness to drive fair play. We need only to look at the prices of mobile phone roaming or the latest financial fiascoes or the ridiculous price of energy or the takeover of HBOS by Lloyds TSB to know the relative heads of the watchdogs are clearly not devoting enough of their time, effort and expensive 'calibre' to doing anything. And if they did, then they have served us badly for their cost.

In a time when we should be questioning every pound spent as thousands of jobs are culled, it really sickens to see such largesse meted out for pet people in pet jobs.