A frugal life is an easy life!

I have currently one case awaiting an ombudsman to pick up and rule upon. The Financial Ombudsman Service (FOS) have had this for well over a year now.

My last communication with them was by telephone, since October 2010 (It's now March 2011), it has been sat on a desk waiting to be looked at. In January 2011 the FOS informed me that they are being burdened with thousands of new cases, that also would have to wait considerable time to be decided upon.

Today I received a letter from the FOS, that stated it was, "To keep you updated about your complaint"

It started by stating the following;

"You maybe aware from press reports that in October 2010 the British Bankers Association (BBA) - on behalf of a number of high street banks - filed papers in the High Court requesting a judicial review of the Financial Services Authority (FSA) and Financial Ombudsman Service.

The legal challenge relates to the FSA's new payment protection insurance (PPI) complaints handling procedure.

The judicial review took place in the High Court in London during the week beginning Monday 24th January 2011.
It is likely to be a number of weeks before an outcome is known. At this stage I have no more information about the outcome or possible consequences."

The FOS have had my complaint 7 months before any judicial review was put forward, so why don't they apply the existing LAWS and award on this basis?
The letter continues;

"We are continuing to deal with PPI complaints and are now receiving more than 2500 cases each week. Hoever, the approach of some businesses is affecting our ability to process cases and means the rate at which we can settle all complaints is now slowing down.

I realise your complaint has been with us some time and I'm sorry we have not been able to settle your case before now. While I am not able to give you a timeframe at this stage, I'm afraid some cases are likely to take over a year from this point to be resolved - depending on when and how the legal action is concluded."

Another year? Ridiculous!

Still taking on complaints? What is the point?

If businesses are delaying cases being ruled upon, then give them 28 days to defend in writing, if they fail to do this then rule against them?
They will soon stop pushing boundaries to protect their money and reply in a much more speedy fashion?

That the Financial Ombudsman Service is now advising people with complaints that the process and an outcome could take a year, even for cases that have been waiting for over a year already, is a complete farce and not good enough!

After many requests for the formula used by British gas, to work out the amount of money they charge me for gas, I have finally managed to get hold of a copy of what British gas staff are using to calculate and check billing amounts and the figures required for the calculation formula.
It looks complicated, but it's really quite simple once you read through it a couple of times.

Step 1:
Work out how many units the customer has used, since their last bill.

Present reading minus previous reading = number of units used.
(HCF = Imperial units, M3 = Metric units)

Step 2:
Convert imperial units into metric units.

If customer has imperial meter (HCF) then multiply imperial units by 2.83 = Metric units (M3)
If customer has a metric meter (M3) then skip to step 3.

Step 3:
Convert units used on meter to kWh (Kilowatts per hour) - this is the formula British gas use to convert.

M3 x 1.02264 (VCF) x Calorific Value (CV) divided by 3.6 = kWh (kilowatts per hour)

* For Calorific value (CV) on metric meters, press Button A and skip to menu option 16, this will give you the calorific value (this changes every week, normally on Wednesdays at 2am) being used that week.
Once you have the calorific reading, convert this into BTU's - British Thermal Units - by dividing the CV number on your meter by 0.0373 - use this figure in the formula above.
If you have an old imperial meter, then ring British gas and INSIST that they tell you the calorific value being used for that week.

Step 4:
Next we need to work out which kWh are charged at tier 1 and which at tier 2 (Or "unit price 1" and "unit price 2" on your statement/bill, without VAT added)
The tier prices can be found on the British gas pricing website here, they are different from your statement/bill "unit prices" as the tier prices quoted online don't include VAT at 5% (Which we will add on to the total of the bill at the end).

Tier 1 is charged for the first 7.34 kWh per day, all other kWh is charged at tier 2.

Number of days the bill covers x 7.34 = Number of kWh to be charged at tier 1 rate.
Total number of kWh - Number of kWh to be charged at tier 1 rate = Number of kWh to be charged at tier 2.

Step 5:
Calculate the bill.

Tier 1 kWh x tier 1 tariff rate (found on pricing website) = Cost of gas used at tier 1
Tier 2 kWh x tier 2 tariff rate (found on pricing website) =Cost of gas used at tier 2
Add them both together to get the total cost of gas.

*NOTE - This total EXCLUDES VAT.

Step 6:
Add VAT.
Domestic gas customers pay VAT at 5%.

Total bill = Total cost of gas + 5%

* Important notes:

- When working out your gas bill, don't forget to take off any payments/credits you have on.
These credits/payments would be knocked off after you complete step 5.
- The calorific value (CV) used to convert each meter unit to kWh is calculated as follows;

"Gas supplied to customer's homes is passed through a testing station where the calorimeter measurements are recorded.
There are two stations, located at Elton, near Middlesbrough and Halton in the East Midlands. Either station can be used to take the measurements although one station recordings may have a higher Calorific Value than the other. We have provided an undertaking to the Department of Trade and Industry that the lower calorific value will always be used when calculating gas bills.
A British/Scottish Gas representative records the readings given by the calorimeters every Thursday.
These readings are then used to determine the value we will use on bills to be produced the following week. This is done by calculating a rolling average, using each of the previous thirteen weeks lowest recorded values from the calorimeters"

- This process is the same regardless of your british gas tariff, it's a universal process which changes weekly due to the calorific value (CV) readings. As you will see, this means that nobody benefits from a "set price" for their gas.
The other difference in price comes from the "Tier price" which varies dependant on which tariff you are on. Your tier prices can be found on the British gas pricing website.
I have tested tier prices with the help of friends of the website around the country, for prepayment gas tier prices, they all came in exactly the same.

Once again, another report/study into the money lavished industry of car insurance has revealed that customers are being exploited and lied to, by the companies that are supposedly there to protect them!

A report from the Transport Select Committee (Read the news story about it here) found that car insurance companies are receiving "Paid referral" fees, when the accident victim's details are passed to solicitors and the victim makes a compensation claim.

The Association of British Insurers (ABI) disagrees, blaming the "Compensation culture" for pushing up the price of people's premiums and legal costs.

"The [select] committee has failed to recognise that the main cause of the recent increases in motor insurance premiums is ever-increasing personal claims and spiralling legal costs," said Nick Starling from the Association of British Insurers (ABI).

The ABI said the rise in legal costs had added £40 a year to average motor premiums.

A crazy idea... Does the ABI not realise, that if its members (the insurance companies) didn't sell on customer details when they have had an accident and receive referral fees for doing so, there would be far fewer claims for compensation, hence lower premiums for everyone?

As for the claims by the ABI that rises in legal costs have added £40 a year to average premiums, utter rubbish!
They maybe able to explain £40 of increases in my premiums, now ABI, try explaining away the other £400 INCREASE that I had to pay for 2010/2011?

I've been told various excuses for over charging;

• "We've just had a record bad winter!"
• "We have had a lot more claims over the past few months"
• "Every insurance company is doing the same as us"
• "You don't have anymore no claims bonus to take into account"

All of course, are complete tripe!
No mention of the disappearing aspects of my "fully comprehensive" policy - like no longer being able to drive any other vehicle, courtesy car, etc.
Add to this, an increase in the excess from £150 to £250, a major part of my policy for which 28 days notice in writing should be given, by law!

The motor insurance industry are awash with profits from the pockets of their customers.
The passing on of customer's details after they have been involved in accidents, to compensation companies is a disgraceful act. Could it be in breach of the Data Protection Act?

Factor in that motor insurance companies do not check any claims for less than £1000, regardless if fraud is taking place, as most insurance companies have private agreements in place with each other (competition commission should be investigating this) and there is a growing case for official intervention and regulation of the insurance industry.

Those in power are supposed to be looking out for the public's interests.
Regulation is failing and it's us, the ordinary people who are facing continuously higher premiums (for a legal requirement) as the insurance industry make up and fantasise about what is causing the increases.

Something has got to give.... and soon!

Being frugal, thrifty, etc, is a process of working out what is right for you, getting there is not a new found wonder or a be all and end all way of life.
It's about doing what is right for you and your family. It has many twists and turns.

I'll be posting here some things that I have found useful in becoming more frugal and changing the way my family approach things, this post is about frugal shopping. I hope it helps.

Question everything - I always question the way I do things, the way I spend/save money, the way I pay bills, the way I shop, etc.
Could I have saved some money whilst achieving what I set out to do?
Will it benefit my home, family, etc?
Is there a more healthy option?

I worked out the time I spent shopping in the supermarket. For one and a half hours every weekend I would trundle a trolley around with the rest of the sheep. I don't despise companies making profits, but making excessive profits at my family's expense I find disgusting.
I noticed that the meat I was buying from supermarkets, would often turn, despite being kept in the fridge, so would have to be eaten say before the following Thursday, otherwise it was binned.
Similar pattern emerged with fruit and vegetables. Out of a tub of eight tangerines, sometimes I'd be throwing two away come the following wednesday, normally when I grabbed one on my way out of the door and discovered it was mouldy underneath. Was there another way?
A way to shop for "fresh" fruit, veg and meat, that wouldn't turn within a few days?
One weekend, I nipped into a local farm butchers on my way to pick up some fruit and veg at a local market.

Not only was their meat fresher, I also got more of it. For the princely sum of £22, I managed to get three prime cuts of meat, plus a block of locally produced cheese.
A welcomed surprise came the following week, when thinking I needed to throw away last weeks chicken fillets, I washed them and found them to still be in great condition.
How could the local meat be lasting longer than supermarket meat?
How could it be cheaper?
As if I needed another reason to stop buying meat at supermarkets, one popped up and bit me on the snout... the local farm butchers buying, the waste was one carrier bag and three small plastic bags - the supermarket waste was three plastic tubs, a carrier bag and more expense. I haven't looked back, it's been over two years now since I have bought meat from a supermarket. I eat more meat than ever and it's always fresh and cut to how I want it. I buy locally made korma sauces from them, cheese, bacon, some pies, etc.
Supermarkets no longer make big profits at my family's expense.

From the butchers, I drove another 10 minutes to the town further down the road. I visited the outside market and picked up £15 worth of fresh fruit and vegetables. I filled four carrier bags, with plums, bananas, rhubarb, apples, oranges, tangerines (satsumas), mushrooms, beetroot, spring onions, tomatoes, lettuce, cucumber, broccoli, carrots and a half a carrier bag full of king edward potatoes.
All fresh, all without masses of packaging, all cheaper than at the supermarket. Not a single piece of fruit and veg turned within a few days, none were rotten underneath, no plastic tubs to dispose of, etc.

I packed them all in the boot and drove home. Time taken, 45 minutes. Cheaper, fresher, less waste and now quicker than shopping at a supermarket. With the added benefit, that when I did walk into a supermarket, I can cut out all the fruit, vegetables and meat sections, which make up more than a third of the store, without being tempted to pick up any little extras. I have escaped some of their marketing techniques!

Alternatives to supermarket shopping for other things - Now I was empowered with buying things faster and cheaper elsewhere, I began to look for other things we normally purchased for the family/house/garden that could be bought cheaper than at the supermarket. It didn't take long to find them!

I walk through an inside market on the way to get my fruit and veg from an outdoor market. In there they have a stall selling toiletries.
The vosene that two of the family use, had just seen a price rise and smaller bottle being brought in at supermarkets tesco and asda. The market stall was a little bit cheaper per bottle, plus they were the older size which contained more shampoo.
I happen to ask one day, how much discount if I was to buy 10 bottles of vosene? The stall holder knocked off 10p per bottle. I was now getting it cheaper still and more of it!
I applied this to the soap we use, yep you guessed it, cheaper as well.
When the stall started selling baby milk formula - 50p cheaper than supermarkets - baby food jars at 10 for £5 (10 for £6 at asda) we started to see significant savings.
I was a tad pleased that the more I looked and asked around, the less supermarkets got of our money, I was now missing out whole aisles when I did visit the supermarket, as I simply didn't need them for many products that we buy every week/month.

It suddenly dawned on me, that being frugal and keeping more of my own money in my family's coffers, was about having a choice!
Supermaket's only want their customers to have one choice, either an expensive over priced branded product, or their own brand product, which now had the price that the branded version should have been.

This opportunity opened the door for a new favourite of mine... "Offer raiding"

Imagine shopping in a supermarket for just offers, in our local tescos, Wednesday and Saturday evenings are best, as this is when offers go on to gondola ends and 3 for 2s appear.
Latest offers I picked up for example - 3 for 2 on catsan cat litter (individual price has gone up from £4.25 to £5.30 in last couple of months) the 3 for 2 worked out at £3.55 a bag, so I picked up six bags. Four days later the offer had been removed. Weekend shoppers didn't even see the offer. (The same thing happened with six tin packs of whiskas cat meat and their 3 for 2 offer)

Tinned tomatoes was another example, priced artificially high at just under a pound a tin, late night offer raiding, I picked up eight tins of chopped tomatoes for 50p per tin.
Buying like this, allows yet more money to be saved, as the prospect of going without a weekly bought product as you loathe paying an obviously inflated high price, is an almost weekly battle with your own conscience, supermarkets play on this. Buying not so much in bulk, but in quantity that can allow you to have the item available in your cupboard and save money on it, until the next "sale" comes around, is another little victory.

I'd wager many of you reading this, have also experienced the cost to your pockets, when you nip into the supermarket mid week because you have run out of something?
I've been told about how someone just nipped in for some milk and ended up spending £20-£30 - it's a supermarket marketing trap, which is why the popular items are always at the back of the store!

Need a tradesman? Get to know your neighbours!
Shopping around for tradesmen is a nightmare. Wether it's a plumber, builder, roofer, etc.
Who is good, reputable, safe?
THE best "price comparison" way, is not through some backroom funded website, it starts with your neighbours!
Allowing for the occasional neighbour, who is out to make money off the back of anyone and everyone, the majority are able to recommend someone who has done a job for them in the recent past.
This also helps you, as if they need a lift with something or a skill that you have, you can do favours for them and in return they help you out.

I needed some topsoil for my garden. A good neighbour of mine wanted to lay some stone flags but didn't have the means to get them to his house. A couple of hours later, he had the flags in his garden, a couple more hours later and I had three tonnes of topsoil, unwanted in his garden, in my vegetable beds. It cost neither of us a penny piece. Now that's what I call frugal!

Why do we continue to waste Millions of pounds of taxpayer's money, on quangos that call themselves "Watchdogs", "Regulators", etc?
All of them are, "Standing up for the consumer" - but when it comes down to it, they are doing absolutely NOTHING for the people of Britain!

A regulator, watchdog, etc, is there for one main purpose - wether it is one person or 5000, they should step in and force the business/industry to apply the law correctly and in a timely manner.
Their existance IS NOT to "work with" companies, to establish programs/training that they can then use to avoid working within the law!

Have three examples...

OFGEM - Regulator of the Gas and Electricity industry:
Absolute rubbish!

What have they done about gas bills?
Currently Gas bills are so confusing, that the advisors of British Gas cannot even tell the customer the formula for how they work their own bills out!
The meter reading that's given - called an "estimated reading" despite most people having new accurate smart meters which we have been told for the past two years are more accurate - gives the customer no clue whatsoever about the money charged for their bill.
The meter gives a reading in what exactly?

Gas bills are based on kilowatts per hour which is calculated by each unit on meter, multiplied by a unit rate, multiplied by something for the kilowatts per hour, multiplied by something else depending on which area of the country you live in, multiplied by something else if you have an imperial meter, blah blah blah.
Throw in the variable "unit price" which has no relevance to the price you pay whatsoever.
Add to this, the complications regarding when a British Gas year starts and finishes, (Some staff say it starts in September other staff say it starts in January!) the customer has no chance at all.
OFGEM are doing nothing about this, it's costing people hard earned money as the price keeps rising.

By law, all customer statements and bills should include, at the very least, the formula used to calculate a "unit" price of used gas will cost the customer, including what percentage of each unit is tax.
At present, no prepayed British Gas statements for more than 2 million prepayment customers, include this.
OFGEM don't seem able to grasp why this is an issue!

OFGEM have published a PDF file for advice on "help with your winter fuel bills" It's a cracking read, which would be more use if you printed it off and used it as a dart board!
Here are some snippets of OFGEM wisdom from it;

• "During the winter we tend to use more electricity and gas to light and heat our homes" - We do? Wow!
• "Be energy prepared - Have your current tariff to hand" - Totally irrelevant, as bills and statements show only a unit price, this is applied to a formula (that British Gas staff do not even know and is not shown on annual statements of prepayment customers, as it's supposed to be) before an amount to pay is calculated.
• "Use price comparison services to shop around for the best price" - Who do you think pays these "services?" - The consumer pays them, via increased bills and "Deals" - For every customer a price comparison website/service manage to tempt into changing their provider, the website/service gets a commission.
  Factor in fees for joining/leaving an energy company and it works out almost just the same as remaining with your existing energy provider. A great example is when you become a duel fuel customer, British Gas cold called me the other day, (itself is an offence under consumer laws) and kindly offered me a chance to switch to them for their electricity as well as my gas, saving me a whopping "£15 a year!"
  £15 a year discount for giving them another £500 per year, NOT a good deal!
• "Use a consumer focus confidence code approved switching site" - Great, a quango recommending another quango.... pathetic!
• "Become energy efficient - by installing new heating, boilers and energy efficient devices, you can save money year after year" - Utter rubbish!
  "New boilers (energy efficient) do not save you any money by using less gas" - the words of a high up expert in British Gas' billing department.

CHARITY COMMISSION - Regulator of charities in England and Wales:
Waste of space!

"We're investigating" yet they have no details of anything that has or is being done about a complaint.
Some staff there say it takes 6 months to investigate, others say it has no time frame. At times, communicating with the charity commission is akin to gargling whilst talking to bill and ben! (IE, makes no sense whatsoever)

An individual makes a complaint about a charity, some staff say unless 3000 written complaints come in about similar actions of a charity, they will do nothing, other staff say they investigate every single complaint, so which is it?

If it's a charity acting illegally, the commission say it's a police matter.
If it's a civil matter, then it has to goto another quango or the civil courts.
If it's about how a charity fundraises, then it is the job of the fundraising service bureau, yet another quango.
£29 million a year of taxpayer's money for what?

FINANCIAL OMBUDSMAN SERVICE:
You register a financial complaint, it takes months for an "Adjudicator" to pick it up. They speak to an umbrella company (That trains companies in selling financial products, who also pay a fee to the FSA and the ombudsman, so they have a vested interest in not ruling against umbrella companies of this kind) then they refuse your complaint, unless it's something extreme and blindingly obvious they shouldn't have done.
Then if you are not happy with their decision, you can say so and have it heard by an actual ombudsman, who will no doubt do the exact same thing, refuse it unless it's extreme and you have written evidence that it was mis sold for example. Which umbrella companies make sure you don't.

The problem here is that it takes what is a basic legal case, complicates it, has a vested interest in ruling against the individual, then stretches the time taken to come to a decision and increases it to, in some cases, over a year.
Then you end up bringing it before a magistrate in a small claims court anyway, which is what the ombudsman is there to help prevent.

Then there are the ombudsman's "interpretation of the law" - a case I am currently pushing through at the moment is a perfect example.
A company sold PPI insurance, insisting that the policy was taken out anyway, as it could be cancelled with 28 days notice in writing, when the customer asked clearly would there be a charge for cancelling, the salesman said "no"

When the customer came to cancel their policy, there was a charge of £30 to cancel.
This is a clear case of misrepresentation at the point of sale.
Only when it became apparent that the case for a full refund of premiums paid was being put to the ombudsman to decide, the company backed down and offered to waive the cancellation fee.

Lose a £30 cancellation fee or refund more than £300 of premiums for mis selling a PPI policy?

The adjudicating officer at the ombudsman, took more than five months (yes that's 5 MONTHS!) to refuse the complaint on the grounds that the company had offered to waive the cancellation fee! (There are other aspects to the case, this is just one of them)
So both the ombudsman and the company selling the policy now admit to a cancellation fee being applicable and that the customer was told at the point of sale that no fee was applicable.
The case has now been referred to an ombudsman, after more than a year it is still waiting to be looked at!

Now in a civil court using laws already in place, the question is quite simple. Did the company offer the policy by stating that no fee was applicable for cancellation? Clearly yes they did.
Did the company issuing the PPI policy then demand a £30 (it could be any amount) for cancellation? Yes they did, as they offered to waive the fee, once it was clear that misrepresentation was going to be put to an ombudsman.
I would expect the courts to rule that this shows the PPI was mis sold. Refund all premiums due to the individual, possible interest at 8% of total amount owed and pay court costs. Job done.

How many times has the financial ombudsman found AGAINST companies that train other companies (so called umbrella companies) about the selling of financial products on behalf of the FSA?
They refuse to tell the public as they are not subject to the freedom of information act!
Can the ombudsman tell me of another "umbrella company" that exists so I can check the individual company record online at their website?
Sadly no, it is confidential information!
The only information I was told, was that there are currently just over 600 "umbrella companies" that exist - some of them represent a handful of companies protecting them from FSA audits, others have hundreds of companies paying them a fee, to protect them from FSA audit and provide a barrier between being held to account for the way they sell financial products and the customer.

There are many other "regulators" that can be included.
Consumer direct, who filter calls to trading standards, who half the time do not even phone the individual back!
Consumer focus, who duplicate much of what consumer direct does.
All being paid for by our taxation!

Unless a regulator or watchdog, etc, provide enforcement of laws on behalf of one or more customers, then they should be scrapped.
The message is clear - Do the job you were brought in to do, or close down and pass that funding to some other body/the courts to do the job instead.