Utility Warehouse (Telecom Plus) Discussion

Quentin

Decado23 wrote: »

there is no proof (nor even evidence) that UW are paying energylinx commission.

There certainly is.

How much evidence do you want.

As already posted, this is from the energylinx website:

Energylinx receives a small commission payment from the utility providers should you decide to enter into a contract with them.

Quentin

vinnyph wrote: »

The card is managed by a separate third party company so UW would not actually get use of the £5000. The account for the card is with a separate third party company.

More misleading info.

The card may be "managed" by a third party.

But the money is in the hands of uw. They can do what they like with it till you spend it.

This is a risk - if uw goes bust, your money is not protected, and would be lost. All cardholders are told about the risks:

In the unlikely event that we become insolvent, the e-money on your Card may lose its value and become unusable, and accordingly you may lose your e-money.

As you know.

Quentin

vinnyph wrote: »

The Cashback card is not a credit card.

Correct.

You got that right, but failed to point out that there is no protection for anyone using it (in addition to the risk of losing all your money if uw went bust):

The Financial Services Compensation Scheme is not applicable to the Card. No other compensation schemes exist to cover losses claimed in connection with the Card

Quentin

If the money were ring fenced by the clydesdale bank, why the risk warning from the uw?

Quentin

vinnyph wrote: »

So you are suggesting that someone get a credit card for payment protection. Are you qualified to give advice in regards to F.S.A. regulated business?

The "Card" mentioned in the quote is the uw card (as you know):

The Financial Services Compensation Scheme is not applicable to the Card. No other compensation schemes exist to cover losses claimed in connection with the Card

If anyone is unaware of the advantages over using a credit card compared to the uw card when it comes to the protection issue they should ask themselves why the uw says they must be happy to accept the risks associated with the uw cashcard before going ahead and buying and using it:

By activating your Card you accept these Terms and Conditions and confirm you understand and accept the risks highlighted..........

Decado23

dacouch wrote: »

Personally I would think in the present climate it would be wise to buy a £5000 kitchen on a credit card just for the Section 75 protection. Obviously load the credit card up with the cash rather than borrow the money from the credit card. Home Base figures are not great at the moment so you never know and £5000 would be a lot to lose if anything went wrong.

Personally, in the present climate I wouldn't think it wise to by a 5 grand kitchen at all, unless it was somehow an absolute necessity. I used that example as it was given in an earlier post by the person I was responding to.

In general terms, regarding the 'risks' associated with the cashback card, perhaps I can put it into a little perspective using my own spending habits...

I tend to shop online at sainsburys twice a month or so, spending around £115, so £230 monthly average.
I pick up my lunch at the sainsburys near work, maybe £4 per day, so around £80 per month.
It's hard to judge the amount spent at argos, mothercare and homebase and the others as these are generally sporadic, one off, purchases. Over the course of a year I'd hazard a conservative guess maybe it would average at around £40 per month.

based on that, my average monthly cashback would be around £17.50, so £210 annually.

subtract 12 x £1 monthly fee + 24 x £0.35 top up processing fee = £189.60 cashback per year. Based on fairly conservative estimates.

I tend to top up my card to a balance of £160 or so a day or two before the sainsburys order (unless I am aware of a large additional planned purchase). This drops to £40-£50 on the card within 2 days, and diminishes over the next two weeks until the next order is coming up.

Assuming someone was to obtain my card and pin, and cleaned it out before I had reported it missing, they are still very unlikely to find more than £30 or so on there. So, if my card is stolen 6 times over the course of a year, I'm still 9.60 better off. Chances of that happening.. well, I'm 32 and have had a debit card for longer than I can remember. I have had a credit card for 7ish years. I have had money fraudulently taken using a cloned card on one occasion. ONE.

I'll take the risk, thanks.

Quentin

Decado23 wrote: »

I'll take the risk, thanks.

The risks being discussed aren't that someone will steal your card and PIN!

The risks are the ones highlighted above (no protection for your money if the company goes bust and no protection against transactions that go wrong eg. because the retailer goes bust)

dacouch

However, at this moment in time UW have no debts and own everything, and have around £40million in spare cash and are profit making. Their overheads are very low due to their efficiency, they have managed it very well without getting the company into debt. I guess you have looked on the site, the information is there as they are an open book trading Plc. Its very unlikely a company would go bankrupt in that situation, it's just gone into the F.T.S.E. 250 list and awarded company of the year by financial times.

Sorry must go, I have got to go and see a friend.[/quote]

In the current economic climate, it is not wise to advise people "It is very unlikely a company would go bankrupt in that situation.

The news is littered with big name companies who have gone bankrupt, with commercial rents due on the 1st of April for the next quarter there are likely to be more companies going bankrupt. I'm not saying UW will, but who would have thought the banks would have in effect gone bankrupt.

I think in the current climate people should excercise caution when dealing with all companies

Quentin

vinnyph wrote: »

Its an offence to give advice unless qualified. I suggest you refrain from giving advice in this matter.

Why? Is it an offence to point out all the "hidden" risks with the uw card. Is that why no uw rep ever mentions them?

Cardew

Decado23 wrote: »

No, I'm suggesting they have an expected 'pool' of incoming commission. Based on the expected size of this pool and the expected number of transactions through the cashback offer they have calculated a level of cashback they are able to support.

This would work in a similar fashion to 'loss leader' offers in retail businesses - some products are sold at extremely cheaply because the retailer knows the special offer is likely to draw in more customers and generate sales for other, more profitable, products. Is this naive? I thought it was fairly standard practice.

Not to mention that basing the level of cashback solely on the specific commision arrangement with the suppliar involved would immediately invalidate their claim to be 100% impartial, should any of those arrangements change and force a differing level of cashback.

I also can't see anything about the cashback offer on the energylinx homepage or in the first couple of pages of a google search for energylinx. If this offer is only publicised through sites like this one then presumably they will be getting a significant pool of commission where no cashback is being paid - I'd hazard a guess this would be more than enough to underwrite the cashback offer while still leaving energylinx a tidy profit.

I don't consider it going to great lengths - simply pointing out that there is no proof (nor even evidence) that UW are paying energylinx commission. And that there are alternative methods energylinx may use to cover the cost of cashback that are both simple and logical.

I emailed energylinx and posed the specific question "will I get cashback if I switch to UW"

The reply was specific and affirmative and even sent me the link to switch with cashback - £17 per fuel.

As stated previously the Energylinx site does state that they get commission from the supplier.

Again, as stated previously, for companies that do not give commission e.g. Ebico - you cannot switch via Energylinx

Whilst it is possible that Enerylinx do not get money for switching people to UW, I really think it is highly unlikely. Why would Ebico not let customers switch via Energylinx if it did not involve them paying commission?

Accepting that UW as a company might not directly pay commission to Energylinx, surely the most plausible explanation is that a distributor has been set up to recruit via Energylinx and is effectively a proxy for UW.

That procedure could be with the knowledge of UW or simply them turning a blind eye to the arrangement.

Obviously with UW's high energy prices they will always appear well down the 'pricing league table' so few if any people would switch.

However surely the honourable thing for any distributor to do for his friends and family(as opposed to cold call recruits) had he persuaded them of the advantages of UW would be to get them to join UW via Energylinx and get the cashback.

Indeed one could go further and they should suggest that they leave UW(as there is no penalty) and rejoin via Energylinx.

As this is a money saving website, Martin really should suggest that latter course of action - the leave and rejoin option - in a Newsletter