Daily Mail headline today expresses astonishment that the Bank of England says that "We Can't Control Mortgage Rates!".
Which bit of a free market economy does the Mail not understand? Do they really think that the huge range of mortgage deals, carefully tabulated on their own finance pages, are all individually controlled by the Bank of England? That the Bank of England says to, say, Bristol and West that their 5yr, 0.5% discount tracker deal, with £2k cashback and a £100 M&S voucher is fine; but that they'd prefer that the Woolwich shaved a couple of basis points off their 1yr-fixed, first-time-buyer- only offer?
The article at one point reminds us of the problem of sub-prime defaults in the US and says that "as a result, High Street lenders here are lookng to make more money from borrowers".
So, if it wasn't for the situation in the US, UK banks would be happy making less money from borrowers? That's just silly. Any bank will always try to make as much money as possible from their customers, but they are restrained by the fact that they operate in a competitive market. This is obvious stuff, everyone knows this really, don't they? They know that prices are controlled not by the State, but by competition from other companies?
But, you know, I think that while everyone sort of knows this, lots of people don't really believe it. They think that companies are generally out to get them, and if something is expensive that is nothing to do with the price the market will stand, but because the company is ripping them off.
I had a conversation with my brother (a scientist) recently about his car insurance, and he was utterly convinced that all insurance companies operate in a cartel, and that there is no competition for his business. He really believed this to be the case. Maybe it is, but it seems it would be a very, very complex cartel to manage. It seems to me much more likely that the market for car insurance in the UK is highly competitive, and if you are unmarried, drive a Lotus which you sometimes take to track days, and park it on the street in Bloomsbury, your premium is probably going to be quite high however competitive the market is.
Thursday, 13 September 2007
Wednesday, 12 September 2007
Why are insurance claims handlers so bad at handling claims?
For the first time (as far as I can recall) in our 6yr history we have recently had cause to claim on our public liability insurance. We fitted a ball valve to a storage tank, the valve subsequently failed, the overflow couldn't cope and water flooded into the customer's property, damaging paintwork and carpets.
No huge drama, but large enough cost (well into four figures) to warrant claiming on the insurance. How long would you think it might take, from notifying the insurance company to them authorising the repairs (bearing in mind this is water damage, so pretty unpleasant to live with for any length of time)? A week? Two weeks?
Six weeks on, and we still haven't had any decision from the insurers (AXA, who have subcontracted the claims handling to Cunningham Lindsey). In the meantime, we've just gone ahead and repaired everything that we can do ourselves, but customer is still left with old carpets. We don't want to tell him to just get new carpets and send us the bill, because the insurers might want to inspect the old carpets.
Why does it take so long? Why can't it work like this:
Day 1: Notify insurance company of potential claim
Day 1: Insurance company contacts customer and arranges to inspect damage (in, say, 5 days time)
Day 2: Customer gets estimates to repair damage
Day 6: Insurance co inspects damage, reviews estimates
Day 7: Insurance co authorises repairs
Why does it take weeks and weeks? And why do we have to manage the process (i.e. we only see any progress at all if we badger the insurance company)?
Although this is the first time we've had to claim on our own insurance, we've often had to claim on other peoples for road traffic prangs, and the process is always extremely painful even when there is no dispute about liablity.
No huge drama, but large enough cost (well into four figures) to warrant claiming on the insurance. How long would you think it might take, from notifying the insurance company to them authorising the repairs (bearing in mind this is water damage, so pretty unpleasant to live with for any length of time)? A week? Two weeks?
Six weeks on, and we still haven't had any decision from the insurers (AXA, who have subcontracted the claims handling to Cunningham Lindsey). In the meantime, we've just gone ahead and repaired everything that we can do ourselves, but customer is still left with old carpets. We don't want to tell him to just get new carpets and send us the bill, because the insurers might want to inspect the old carpets.
Why does it take so long? Why can't it work like this:
Day 1: Notify insurance company of potential claim
Day 1: Insurance company contacts customer and arranges to inspect damage (in, say, 5 days time)
Day 2: Customer gets estimates to repair damage
Day 6: Insurance co inspects damage, reviews estimates
Day 7: Insurance co authorises repairs
Why does it take weeks and weeks? And why do we have to manage the process (i.e. we only see any progress at all if we badger the insurance company)?
Although this is the first time we've had to claim on our own insurance, we've often had to claim on other peoples for road traffic prangs, and the process is always extremely painful even when there is no dispute about liablity.
Tuesday, 11 September 2007
Top tip when applying for a job ...
... read the job advert properly.
We are currently looking for more London handymen, and have an ad running in Gumtree (here). The ad specifically asks people to go to our website and complete the application form they will find there. It specifically says not to simply use the form on Gumtree to send in a CV.
At least 50% of the respondants simply send in their CV, it is just unbelievable. I suppose they are just not even reading the ad, it is a bit annoying.
We are currently looking for more London handymen, and have an ad running in Gumtree (here). The ad specifically asks people to go to our website and complete the application form they will find there. It specifically says not to simply use the form on Gumtree to send in a CV.
At least 50% of the respondants simply send in their CV, it is just unbelievable. I suppose they are just not even reading the ad, it is a bit annoying.
Thursday, 30 August 2007
SafeContractor - the final instalment
Firstly, apologies for recent lack of blogging. My father died unexpectedly a couple of weeks ago. I am now back in action, and with plenty to blog about.
We finally said goodbye to SafeContractor in August. They were still trying to get us to use an overly wordy, repetitive and therefore ineffective Health and Safety Policy document. Plus a whole load of other issues, very similar to those we first came up against when this whole fuss started. The H&S policy was just the first thing on their list, and when we failed to persuade them that ours was much better (being clear, concise, not repetitive, and still covering all the key points) I decided enough was enough and we simply wouldn't ever convince them that their materials are (in our opinion) less safe than our own.
Here, if you are interested, is their super-long Health & Safety Policy sample. And here is our version (in draft form - the one we actually issue to staff is much prettier).
Despite being far, far longer, I really don't think there is anything substantive in theirs which is not in ours. Or at least, nothing sufficiently important to warrant the inevitable loss of clarity that would result from extending the length of the document.
Plus their sample is horribly let down by what I can only assume is a drafting error in the very first two clauses (which are almost identical).
Here is the letter I wrote to SafeContractor informing them of our decision to withdraw from their accreditation programme (copied into the HSE):
John Kinge
National Britannia Group Ltd
Britannia House
Caerphilly Business Park
Caerphilly
CF83 3GG
Dear John,
Thank you for your e-mail of 1st August.
We do very much appreciate the work that you and your colleagues have put into reviewing our SafeContractor accreditation. It is a credit to your organisation that you have paid so much attention to our very detailed concerns.
Nevertheless, we cannot escape the fact that we have very different views on managing health and safety. We think that long, repetitious documents with redundant information are dangerous as they are not read properly, the really important information gets lost amongst less important information, and they give the reader the impression (whether justified or not) of being part of a bureaucratic box-ticking exercise.
In our discussions you have indicated that you agree with these principles (of keeping documents concise, readable, relevant etc.). But, in practice, you give far less weight to these principles than we do, to the extent that those principles are completely overshadowed by the competing principle of including as much information as possible, even if it is of minimal importance, or repetitive.
I think that the first two clauses of your sample H&S Policy template are very telling:
“1.1 The Company acknowledges and accepts its legal responsibilities for securing the health, safety and welfare of all its employees, of subcontractors working on its behalf and all others affected by their activities.”
“1.2 The Company recognises and accepts the general duties imposed upon the company as an employer under the Health and Safety at Work Act and subsequent health and safety regulations appertaining to it’s [sic] operation.”
Clause 1.2 says nothing substantive that clause 1.1 does not say. While you might see this redundancy as a trivial drafting error, I think that the fact that such obvious repetition has found its way into the very first section of your sample template says a lot about the (lack of) importance given to producing a concise, readable, effective document. Clearly no-one has read through this document, thinking “Can we make this shorter and clearer? Can we make the key messages more prominent?” etc. No document (whether relating to health and safety or not) would be produced by our organisation without that sort of attention to detail. To you, attention to detail seems to mean “have we covered everything?” To us, attention to detail means “is this document as effective as possible?”
I should emphasise again that we are not rejecting your approach because we want to reduce paperwork, or that we see paperwork per se as burdensome. We are rejecting it because we think it is less safe. We firmly believe that our health and safety documents help foster a safer working environment than we would have if we followed your approach. We therefore no longer wish to seek renewal of our SafeContractor accreditation.
We will continue to work independently to further improve our materials and processes, including taking into account Jim Neilson’s and Steve Pointer’s comments about more formally documenting the process we have gone through to produce the employee-facing material that we use.
Thank you again for the time and effort you have put into this.
Yours sincerely,
Bruce Greig
Managing Director
We finally said goodbye to SafeContractor in August. They were still trying to get us to use an overly wordy, repetitive and therefore ineffective Health and Safety Policy document. Plus a whole load of other issues, very similar to those we first came up against when this whole fuss started. The H&S policy was just the first thing on their list, and when we failed to persuade them that ours was much better (being clear, concise, not repetitive, and still covering all the key points) I decided enough was enough and we simply wouldn't ever convince them that their materials are (in our opinion) less safe than our own.
Here, if you are interested, is their super-long Health & Safety Policy sample. And here is our version (in draft form - the one we actually issue to staff is much prettier).
Despite being far, far longer, I really don't think there is anything substantive in theirs which is not in ours. Or at least, nothing sufficiently important to warrant the inevitable loss of clarity that would result from extending the length of the document.
Plus their sample is horribly let down by what I can only assume is a drafting error in the very first two clauses (which are almost identical).
Here is the letter I wrote to SafeContractor informing them of our decision to withdraw from their accreditation programme (copied into the HSE):
John Kinge
National Britannia Group Ltd
Britannia House
Caerphilly Business Park
Caerphilly
CF83 3GG
Dear John,
Thank you for your e-mail of 1st August.
We do very much appreciate the work that you and your colleagues have put into reviewing our SafeContractor accreditation. It is a credit to your organisation that you have paid so much attention to our very detailed concerns.
Nevertheless, we cannot escape the fact that we have very different views on managing health and safety. We think that long, repetitious documents with redundant information are dangerous as they are not read properly, the really important information gets lost amongst less important information, and they give the reader the impression (whether justified or not) of being part of a bureaucratic box-ticking exercise.
In our discussions you have indicated that you agree with these principles (of keeping documents concise, readable, relevant etc.). But, in practice, you give far less weight to these principles than we do, to the extent that those principles are completely overshadowed by the competing principle of including as much information as possible, even if it is of minimal importance, or repetitive.
I think that the first two clauses of your sample H&S Policy template are very telling:
“1.1 The Company acknowledges and accepts its legal responsibilities for securing the health, safety and welfare of all its employees, of subcontractors working on its behalf and all others affected by their activities.”
“1.2 The Company recognises and accepts the general duties imposed upon the company as an employer under the Health and Safety at Work Act and subsequent health and safety regulations appertaining to it’s [sic] operation.”
Clause 1.2 says nothing substantive that clause 1.1 does not say. While you might see this redundancy as a trivial drafting error, I think that the fact that such obvious repetition has found its way into the very first section of your sample template says a lot about the (lack of) importance given to producing a concise, readable, effective document. Clearly no-one has read through this document, thinking “Can we make this shorter and clearer? Can we make the key messages more prominent?” etc. No document (whether relating to health and safety or not) would be produced by our organisation without that sort of attention to detail. To you, attention to detail seems to mean “have we covered everything?” To us, attention to detail means “is this document as effective as possible?”
I should emphasise again that we are not rejecting your approach because we want to reduce paperwork, or that we see paperwork per se as burdensome. We are rejecting it because we think it is less safe. We firmly believe that our health and safety documents help foster a safer working environment than we would have if we followed your approach. We therefore no longer wish to seek renewal of our SafeContractor accreditation.
We will continue to work independently to further improve our materials and processes, including taking into account Jim Neilson’s and Steve Pointer’s comments about more formally documenting the process we have gone through to produce the employee-facing material that we use.
Thank you again for the time and effort you have put into this.
Yours sincerely,
Bruce Greig
Managing Director
Tuesday, 7 August 2007
Has O2 boss never heard of a smartphone?
Profile of Peter Erskine (CEO of O2, mobile phone company) in yesterday's Times. After the article, there is a bunch of the usual trivial questions, including "What gadget must you have?"
To which Erskine replied "I guess it would have to be a toss-up between my sat-nav and my BlackBerry. I can’t choose one outright, but I know I’d be really lost without one of them."
Huh?
Has no-one told him that there are plenty of phones which will do Blackberry stuff and Satnav stuff? I bet Erskine is one of those chaps that carries around a Blackberry for e-mail, a high-spec but completely underused mobile for voice calls, and a PDA for a diary. Plus sat-nav.
When all of those functions can easily be performed by one device (e.g. Sony Ericsson M600, all the Sony-Ericsson P-series phones, loads of Nokia smartphones, etc.)
If the boss of O2 hasn't figured this out, no wonder so few other people have.
To which Erskine replied "I guess it would have to be a toss-up between my sat-nav and my BlackBerry. I can’t choose one outright, but I know I’d be really lost without one of them."
Huh?
Has no-one told him that there are plenty of phones which will do Blackberry stuff and Satnav stuff? I bet Erskine is one of those chaps that carries around a Blackberry for e-mail, a high-spec but completely underused mobile for voice calls, and a PDA for a diary. Plus sat-nav.
When all of those functions can easily be performed by one device (e.g. Sony Ericsson M600, all the Sony-Ericsson P-series phones, loads of Nokia smartphones, etc.)
If the boss of O2 hasn't figured this out, no wonder so few other people have.
Friday, 3 August 2007
Valuing money vs service gestures
I often harp on to our handymen about the importance of billing accurately. We bill in half-hour intervals, so if a job has taken one hour and fifteen minutes, that's billed as 1.5hrs. The customer expects that, it is generous compared to most firms who bill in full hour increments (so 1hr15 would be billed as 2hrs), and crucially you don't really get any brownie points from the customer if you under-bill. At least not enough brownie points to justify the massive dent in your day's revenue if, say, you rounded DOWN three jobs in the day. That'd be 1.5hrs of billable time which you've lost out on, and the customer, really, will hardly have noticed. Customers notice small, important SERVICE gestures, but don't really notice PRICE gestures (e.g. returning to a customer and spending 10mins showing them again how the new combination lock on the door works without charging would be hugely, hugely valued by the customer. But rounding down the original 1hr10min bill to 1hr would be hardly noticed, customer would just think it was a standard policy, wouldn't really register that you'd just surrendered 33% of the entire bill).
I saw this first hand today. As a customer.
We had to drop our Ford Focus off at the local dealer to get a new front window fitted (friendly policewoman had to break into the car on Wednesday to rescue baby Lara after Robyn (wife) had somehow managed to lock both key and baby in the car. No huge drama, but did obviously result in broken window).
I also asked the dealer to programme a new key as we only have one (hence having to break into car in the first place.)
I picked up the car this evening and noticed that they had charged us a lot less for the window than they had quoted. I even managed to draw attention to this, as I thought they might charge more: they had originally quoted something like £180, I asked them to match Autoglass's price of £157, which they said they would do, so I was keen to check that they had charged £157. They hadn't, they'd charged £103! I quickly moved on to check that the new key worked OK.
So, at this point, I knew (and dealer knew I knew) that I had already saved over £50 on what I expected to pay.
I checked the keys and found that the zapper on the old key no longer worked, only the new one did. Dealer offered the perfectly reasonable explanation that, actually, the old key had never worked 100%: the unlock button was mechanically defunct, which meant they couldn't get it to transmit its full range of signals, so couldn't programme a new key to match it. They'd just reprogrammed the car and the new key to match, leaving the old key fine as a key, but no good as a zapper.
This is a completely satisfactory explanation. I now had what I needed: a perfectly functional zapper key for everyday use, and a spare key to use to if we ever lost the first key.
You'd think, given that they had just given me £50 (by, for whatever reason, underbilling for that amount), that I'd be happy with that. But I wasn't. I was expecting to have 1 fully-functional zapper key (the new one) and one 50% functional zapper key (my old one). And I was mildly irritated not to have that.
The dealer was great, offering to replace the zapper bit of the old key, offering to come and collect the car from our house (as I had pointed out it wasn't that easy to bring car back, involves taxi or 2-car / 2-person trip), etc.
I was perfectly polite about the whole thing, and quickly realised I was fussing over nothing, but it struck me later how much I had fussed over the trivial matter of the zapper, compared to how little I had appreciated the free £50 I had just got.
Had, for example, the dealer never underbilled by £50, but instead had produced, immediately, a third key free of charge (value about £30), I would have been ecstatic and raving about them even though I would have actually been £20 poorer than I am under the £50-lower-bill / half-a-zapper scenario. To be honest, they could have produced a £20 bottle of Chablis, or bouquet of flowers, or whatever, and I would have valued that much more highly than the £50 off the bill.
We aren't that rational when it comes to things like this. We, as customers, value gestures and service far more highly than we do cash, which is odd, but extremely interesting.
I saw this first hand today. As a customer.
We had to drop our Ford Focus off at the local dealer to get a new front window fitted (friendly policewoman had to break into the car on Wednesday to rescue baby Lara after Robyn (wife) had somehow managed to lock both key and baby in the car. No huge drama, but did obviously result in broken window).
I also asked the dealer to programme a new key as we only have one (hence having to break into car in the first place.)
I picked up the car this evening and noticed that they had charged us a lot less for the window than they had quoted. I even managed to draw attention to this, as I thought they might charge more: they had originally quoted something like £180, I asked them to match Autoglass's price of £157, which they said they would do, so I was keen to check that they had charged £157. They hadn't, they'd charged £103! I quickly moved on to check that the new key worked OK.
So, at this point, I knew (and dealer knew I knew) that I had already saved over £50 on what I expected to pay.
I checked the keys and found that the zapper on the old key no longer worked, only the new one did. Dealer offered the perfectly reasonable explanation that, actually, the old key had never worked 100%: the unlock button was mechanically defunct, which meant they couldn't get it to transmit its full range of signals, so couldn't programme a new key to match it. They'd just reprogrammed the car and the new key to match, leaving the old key fine as a key, but no good as a zapper.
This is a completely satisfactory explanation. I now had what I needed: a perfectly functional zapper key for everyday use, and a spare key to use to if we ever lost the first key.
You'd think, given that they had just given me £50 (by, for whatever reason, underbilling for that amount), that I'd be happy with that. But I wasn't. I was expecting to have 1 fully-functional zapper key (the new one) and one 50% functional zapper key (my old one). And I was mildly irritated not to have that.
The dealer was great, offering to replace the zapper bit of the old key, offering to come and collect the car from our house (as I had pointed out it wasn't that easy to bring car back, involves taxi or 2-car / 2-person trip), etc.
I was perfectly polite about the whole thing, and quickly realised I was fussing over nothing, but it struck me later how much I had fussed over the trivial matter of the zapper, compared to how little I had appreciated the free £50 I had just got.
Had, for example, the dealer never underbilled by £50, but instead had produced, immediately, a third key free of charge (value about £30), I would have been ecstatic and raving about them even though I would have actually been £20 poorer than I am under the £50-lower-bill / half-a-zapper scenario. To be honest, they could have produced a £20 bottle of Chablis, or bouquet of flowers, or whatever, and I would have valued that much more highly than the £50 off the bill.
We aren't that rational when it comes to things like this. We, as customers, value gestures and service far more highly than we do cash, which is odd, but extremely interesting.
Wednesday, 1 August 2007
Footway parking loophole closed?
Read that a barrister, Clive Wolman, lost a case yesterday in the Court of Appeal regarding a footway parking loophole which we established back in 2004.
Here is the BBC report on our original case, where we established in the Parking And Traffic Appeals Service that a literal interpretation of footway parking law is the correct interpretation (that one or more wheels have to be on the footway. If neither wheel is touching the footway, no contravention has occurred.)
As I understand it, PATAS rulings are not precedent-setting (i.e. another court can decide on their own interpretation of the law; and indeed a future PATAS adjudicator can reach a different decision to the adjudicator in our case), and it looks like the Court of Appeal have decided that the carelessly-drafted paragraph in the London Local Authorities Act 2000 should have read "on or over" not just "on" (as in one or more wheels on any part of an urban road other than the carriageway).
Not sure if Mr Wolman knew about our case or not - I Googled him last night and left him a voicemail at his chambers, as I am curious to find out a bit more background on his case.
Here is the BBC report on our original case, where we established in the Parking And Traffic Appeals Service that a literal interpretation of footway parking law is the correct interpretation (that one or more wheels have to be on the footway. If neither wheel is touching the footway, no contravention has occurred.)
As I understand it, PATAS rulings are not precedent-setting (i.e. another court can decide on their own interpretation of the law; and indeed a future PATAS adjudicator can reach a different decision to the adjudicator in our case), and it looks like the Court of Appeal have decided that the carelessly-drafted paragraph in the London Local Authorities Act 2000 should have read "on or over" not just "on" (as in one or more wheels on any part of an urban road other than the carriageway).
Not sure if Mr Wolman knew about our case or not - I Googled him last night and left him a voicemail at his chambers, as I am curious to find out a bit more background on his case.
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