The long-winded case involving UK Banks and the charges they levy on consumers for unauthorised overdrafts and other “defaults” reached it’s first-stage conclusion on Thursday.

The High Court confirmed the British Government’s Office of Fair Trading’s (OFT) view that personal current account unarranged overdraft charges should be assessed for fairness.  This does not mean a judgement was made regarding what are fair charges, only that further procedings could be started in order to adjudge exactly that topic.

This is an important early milestone for the OFT and their investigation into this area of high consumer interest.  They are now analysing the implications of the judgment for their overall investigation into the fairness of the terms, but there may need to be further hearings to determine any outstanding issues arising from the judgment.  The timetable for next steps will be decided by the court at a hearing before the end of May.

This case was brought by the OFT in agreement with eight of the largest current account providers - both banks & Building Societies.  The OFT will be working with them and other interested parties to ensure this market works well for consumers.

It is important to note that this judgment only covers points of legal principle and does not determine whether the relevant charges are actually unfair.  The OFT are continuing their investigation into the fairness of these terms and will consider their position after reviewing the detail of this judgment.

The banks have responded with summaries and statements on their websites.  We have added the full texts from two of them, Barclays and Lloyds TSB, in our Finance Department Forum in the BuildaSkill discussion boards, in addition to the OFT’s press release regarding the judgement.  Barclays admit their terms are unintelligible, and LloydsTSB state their’s were found to be understandable by the layman.  I’ll go along with that, having had both personal and business accounts from both, and having had loans from both, for both business and personal use, in the past.

Meanwhile, the UK’s Daily Express newspaper has begun a campaign to get readers lodging claims for refunds of their last six years bank charges for overdrafts, bounced cheques, and unpaid Direct Debits.  Their lead article links through to another that details step-by-step instructions for how to do it, and includes links to downloadable template letters and forms for submission to banks from initial enquiry through to threatening legal action.  There are also links for the Financial Ombudsman service, and for the Citizens Advice Group.

What’s your opinion about it all?  Add your comments here in the blog, or stir up a debate in the forums.

Ed

eBay UK announced yesterday that they will be “launching a new streamlined Checkout flow, which is designed to simplify and improve the buying process.”

That’s great news - anything that improves the buyer experience and results in less mistakes (by the buyer) during checkout in regard to selecting the correct shipping, insurance and so on, will be a definite step forward, as will facilitating sellers getting paid faster.

However ……

There are a few immediate concerns that spring to mind with this change to one of the most vital site functions.  Any UK seller, who lists and sells outside of the UK market, will tell you that there are ongoing problems with the shipping calculator on the North American sites.  On and off-eBay, I’ve heard of situations where UK registered sellers, uploading listings onto eBay US, have then checked their listings and found that all shipping options and costs for all destinations except the US, have been removed during upload (this is a particular issue when uploading through Turbo Lister, but has also happened with the SYI form).  Most commonly affected by this appears to be Canadian buyers.

Another, issue with the shipping calculator (and not confined to the US) relates to combined and discounted shipping for multiple purchases.  This has been, and remains, broken since the change of discount system in January/February 2007, and first began appearing on the Canadian site during late-December 2006.  Sometimes it shows as applying no discounts, sometimes applying only the shipping for the first item (and none of the others), sometimes applying additional item discount to all items including the first, and sometimes just picking a shipping cost out of the ether that has no relationship to the value set by the seller.  And then, most irritatingly - actually working correctly sometimes.  The latter case usually being after firing a complaint to eBay Customer Service.

So, shipping calculation, shipping destination and cost display, and shipping settings retention, are not working correctly.  Soon, the final fees sellers pay to eBay will be partly based upon buyer’s assessment of shipping costs, and eBay are “fiddling” again with the buyer interactive part of the shipping costs at the checkout screen.  Confidence inspiring?   Not!

Now I said initially that such improvements are generally good news, and any seasoned eBay seller will tell you that good news site tweaks normally roll in the US first, then later, the rest of the world gets them.  Bad news tweaks roll to one of the other sites first, and arrive in the US last. 

So is the UK getting this first, to be interpreted as bad news for sellers?

Historical habits would suggest so, yet, the intended application should be only good for both buyer and seller …. until you look at what’s going on in the US. 

Tighter and tighter integration of PayPal into the eBay platform is being challenged in a class action lawsuit in the US.  The suit contends that eBay have abused their monopoly and forced unreasonable and additional costs onto sellers by excluding various payment methods and by increasingly driving users to adopt PayPal.  Not least of which is the ongoing campaign to have buyers fund payment by credit or debit card through PayPal.  This loads a card acceptance fee onto the seller within PayPal, and absolves PayPal of Seller Protection if the card company makes a chargeback.  They achieve this by not permitting card funded payments on the fee-free Personal account, and only allowing card payments through Business & Premier accounts, where all payment receipts are subjected to fees, that are not levied on personal accounts, which cannot accept card-funded payments.  Click through to the actual class action filing - it makes very interesting and illuminating reading.

Where this leaves sellers in the UK, is that eBay have banned a lot of payment processors and then never reviewed their ban list.  Google Checkout, despite the reputation and standing of the parent company, was banned based on being too new - the minimum operational period (for being approved) has now passed, but the list has not been reviewed.  eBay UK’s then MD, Doug McCallum, bailed out of an interview on the BBC at the last minute, because on the day he was due to be interviewed, someone added NoChex to the prohibited payments list - that was later reversed, but led to a large number of compaints and ammended listings over the weekend that the ban remained published in the eBay UK Help pages.

With these latest site tweaks, eBay are further brainwashing buyers and sellers alike into PayPal being visible as the only permitted payment method (keyword = visible), and increasing the operational costs of sellers, as this change will increase PayPal usage amongst buyers.   Ultimately, that will increase cost of goods advertised on eBay, and higher prices will lead to lower sales.   The UK government should also be paying attention as the volume traded annually on eBay is contributory to UK economic inflation figures in this context, it may be a small contribution overall, but it is an avoidable additional pressure on that key economic value.

eBay have already prohibited any form of surcharging for payments via PayPal, but allow sellers to surcharge for processing credit and debit cards through their own (non-PayPal) merchant services processing agreement.  This means simply, if you have a facility with your bank or others, to accept card payments, you can surcharge to recoup the fees.  If you accept cards through an online processor, such as PayPal, MoneyBooker, NoChex etc, you cannot - this directly interferes with the cost of receiving the payment and facilitating clearance of it in a manner not within the user agreements of all but PayPal.  eBay is therefore applying trade interference.  As such, now is the time to advertise discounts when paying by other methods (eBay has no policy on doing that) - if you can handle the workload of moving buyers off the eBay checkout system, and begin invoicing direct from within MoneyBookers, NoChex et al.

The US class action contends that eBay has a monopoly position and is abusing that position.  The same applies in the UK.  The eBay auction model has not enough competition to bring eBay’s total usage down to a total market percentage that would allow argument that eBay does not have a dominant monopoly of the channel. 

Arguments about Amazon’s size are irrelevant - Amazon’s market model is direct purchase in the style of online retail, not auction, and therefore Amazon’s enforced use of Amazon Payments does not compare to the eBay & PayPal situation - Amazon’s payment methods restriction is no different to high street shops stipulating which payment methods they will accept.  Additionally, Amazon sells products as well as advertising space, therefore they have only simplified the process for buyers and 3rd-party sellers alike, by moving the buyer’s payment method variations into the process layer between purchase and fulfillment instruction - this removes the problem of 3rd-party sellers having a myriad of payment processors, some of which may not be available to Amazon, and adds the function that Amazon may have access to some payment processors that their 3rd-party sellers maybe could not obtain authorisation for.  Amazon’s payments interface therefore is symbiotic for the four groups involved - Amazon, buyers, sellers, and payment processors. 

eBay’s payments process model is not the same - eBay does not sell any products, it only sells advertising space and therefore any payment method restrictions should only be applied to eBay’s paying customers when they are paying eBay, not to distanced transactions between third parties (buyers and sellers) whose payment terms and other contractual conditions do not involve eBay anymorw than they would involve a newspaper or shop window carrying an advert that brought them together.

What eBay are further doing with these scheduled checkout tweaks, involves gravitating all parties towards only being able to utilise eBay’s in-house and fully owned subsidiary to the exclusion / omission of all others, and for the financial benefit of eBay.  That is abuse of monopolistic position.  eBay are denying freedom to sellers to be able to select the payment methods they will accept, at costs that are acceptable to their business model, and the freedom of buyers to select payment methods they have access to, at costs which are agreeable.

Buyers and sellers need to wake up to this now, and begin bombarding eBay (and government agencies) with correspondence demanding the return of freedom of payment method choice within the dominant monopoly that advertises itself as “just a venue”.  The initial calls should include that checkout features ALL payment methods shown in the acceptable payment methods policy - after all, if they are acceptable, why are they not integrated with checkout already, unless eBay has a not-so-hidden agenda to monetise the checkout system by promoting PayPal? 

Ed

 Our Online-Business Discussion Forums

 How to Increase Auction Profits at eBay $9.99 in BuildaSkill’s book & software shop

The Singapore Straits Times has run an interesting article related to the global effects of the US sub-prime mortgages “crisis”.

 As a microeconomy in the global market, Singapore is often easier to examine for effects and trends than many of its larger rivals.  The Straits Times reported on the last day of 2007 that “THE sub-prime crisis failed to cast a cloud over what has been a boom year for initial public offerings (IPOs) here” and went on to say IPOs during 2007 were up almost 19%.

It did however confirm that they’d slowed down during the second half of the year and were predicted to remain slow during at least the first half of next year.  With overall IPO growth in 2008 estimated to be around 10%.

Interestingly, with south-east and east Asia reputed to be restrictive to foreign ownerships in the region, Singapore reports most of the activity was in foreign owned corporations and expects that to continue next year despite China having sucked in the lion’s share of foreign investment since the millennium.  Thailand’s registered foreign inward investment projects (registered with the Thai Board of Investment) fell from over 2,000 projects in 1999 to just 200 in 2001 for example.  And, despite political tensions, a growing percentage of Taiwanese overseas investment is now heading to the mainland, rather than other Asian countries.

Next year may be the year to re-examine which unit trusts and managed funds you’re using with life assurance and pensions, as it seems the northwestern Pacific Rim countries are re-emerging as the Tiger Economies of the early-mid 1990s.  The restructuring of financial institutions and internal markets imposed by the World Bank and WTO after 1997 certainly seems to be paying off in the corporate arenas, though the “little people” still seem to be struggling.

Ed

  Have you ever wondered how to keep more up to date on exchange rates when you’re trying to organise pricing on your website or online-auction listings?

I’ve always considered myself to be pretty savvy with such things, especially listing on up to a dozen eBay sites in any one week, each in a different currency.  However, I recently discovered one of my favourite tools has (again) been pulled from the eBay UK home page, and it left me feeling a little bit lost.

For the last 18 months or so, there has been a link at the bottom of eBay.co.uk that took users to an eBay page utilising the XE.com universal currency converter (UCC).  This handy little tool uses mid-market rates to give a straight forward X of currency 1 = Y of currency 2. 

OK, when actually doing the transaction there will be a slight variation that’s not due to exchange rate movements, but due to the payment service’s “commission” rate, however, particularly for the short life of an eBay listing, it’s always been good enough and even PayPal’s punitive exchange rates didn’t throw the base calculation too far out.

Now it’s not there in an easy to find link, I needed to be sure I had easy access to it, so I went a-lookin’ for XE.com and am very glad I did. 

Their site has allsorts of free goodies, including a daily email service, to your PC,  giving the top 100-ish currency rates (based against your home currency), link farms for different free tools, and many other useful “toys”.  The spinning banner at the top of this article goes to their UCC that used to be on eBay, and I’ve also added it permanently to THIS site (over there on the left, just below the signin link) - it’ll be there for whenever you need it, and it’ll open in a new window that you can minimise, then continue reading BuildaSkill   .

Ed

They’re at it again - those awfully nice people at Lloyds TSB are re-running their Introduce a Friend program, and this time you could collect up to £300 for doing so.

The promotion details state that both you and the introduced friend can receive £30 each if the friend opens one of the range of Lloyds TSB’s current accounts, and then in three of the first four months the account is open, your friend deposits at least £500 of salary into it.  You can introduce as many friends as you like, but are limited to the first 10 friends who open an account in terms of receiving the £30 for each.  Each of your friends will also receive £30 bonus when they fulfill the criteria.

It might not sound a lot, but if you think of it in terms of deposit account interest rates, it’s quite a good deal.  For example, if you use a Lloyds TSB Online Saver account, with interest paid monthly, and keep a £500 balance in it, you’ll receive roughly £1.17 of interest after tax at source.  Whereas, the refer a friend scheme is the equivalent of £7.50 per month in interest, and there’s no requirement to leave the money in the account after depositing it.   

If you’re a UK resident and want to take advantage of this but don’t know anyone with a Lloyds TSB account to refer you - contact me and I’ll send you a pre-qualified referral form, then we can both get the free bonus    Or, if you want to do it online, please email or PM me for a referral code, and again, we’ll both get £30 free from Lloyds TSB (ooh - poetry in my ear  )

A further incentive to follow through on this is that if you get the account open before 30 November 2007, and obtain a Lloyds TSB Visa Debit card, everytime you use it to make a purchase, you’ll be entered in a prize draw for a luxury trip around the landmarks of London that appear on a Monopoly board, and the bank will give you a bundle of spending money too.

Ed

Discuss this in our forums

Every great business has started with a simple idea. If you have a great idea, float it by Barclays at a free “Let’s Talk Business Ideas“ seminar.

When you’ve got an idea for a business, advice on making the dream come true is the key to success.

• How viable is the idea?
• What are the potential problems?
• The potential rewards?
• Is running a business really right for you?

Find out at Barclays’ seminars run in conjunction with the National Federation of Enterprise Agencies, and in partnership with the Association of Chartered Certified Accountants.

Perhaps you’re in need of an idea? While they can’t come up with one for you, Barclays and friends can help you explore opportunities that use the knowledge and skills you already have.

Seminars are taking place up and down the country, each full of great business advice and tips for people who want to find out how to move a dream business idea into a reality. Plus you’ll network with like-minded local people and exchange useful opinions and views.

Book now….

To book your place at a seminar

1. Select a region from the list
2. Select the event most convenient for you
3. Contact the Enterprise Agency co-ordinating the event to reserve your place.

Places are limited and are allocated on a first come, first served basis. So don’t delay - book your place now!

Is this the event for you?
If you do not intend on setting up in the next few months - then yes.

However, if you hope (more…)

UK High Street bankers Lloyds TSB have done a fantastic job of preparing a site to introduce would-be entrepreneurs to the neccessity and construction of a Business Plan.

The landing page introduces the Business Plan - what it is, what it’s used for, what it contains, and who needs it etc. From that page, there are numerous links to other online tutorials within the Lloyds TSB banking website, to government agencies, and a myriad of useful information and how-to’s.

Even if you’ve studied it all before at college, it’s serves as a very comprehensive refresher of everything you thought you knew, but had forgotten.

Find links to the important pages via the Forum topic below.

Ed

Discuss this in our Forum

Are you ready for January 2008?  Do you know the major new opportunity and challenge that will be presented to your business, whether a part-time eBay trader, or full-time bricks and mortar enterprise?  Here’s the low-down …… 

The Single Euro Payments Area or SEPA will be the area where citizens, companies and other economic actors will be able to make and receive payments in euro, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.

SEPA will work as a single domestic payments market in which citizens and economic actors will be able to make payments as easily and inexpensively as in their hometown.

The SEPA programme has (more…)