TREATING CUSTOMERS FAIRLY! – THAT’S A LAUGH

The Financial Services Authority launched an in initiative some years back called ‘Treating Customers Fairly’. The idea behind this was to make sure those companies dealing in the often murky and sometimes downright impenetrable world of financial services - aka treating other people’s money as their own - should be held to account in their dealings with customers.

All very laudable. Trouble is the FSA is as guilty as any financial services provider of letting down customers. Its attitude beggars belief. You would have thought that in the light of the sub-prime fiasco (a classic example of providers treating other people’s money as their own if ever there was one) the FSA might actually do more than just pay lip service to the Treating Customers Fairly initiative.

But no, not on your nelly. The latest example of Treating Customers Unfairly comes with the FSA’s bewildering and intensely annoying refusal to name the 19 firms that it has found to have been preying on consumers with misleading online advertising. That represents one in four companies letting down their customers.

Yet instead of naming and shaming the offenders the FSA says it will carry out another review – its fourth- and would take action if companies were still misleading customers.

The FSA, which is particularly good at hiding behind the rules of an increasingly regulated marketplace (its own regulations that is), says it is prevented from naming names under the confidentiality rules of the Financial Services and Markets Act. What absolute piffle.

The fact is that the FSA is clearly putting commercial interests ahead of the interests of customers. The FSA is responsible for consumer protection. You don’t know whether to laugh or cry.

APPLE AND MICROSOFT – CAN YOU TELL THEM APART?

I was a delegate to the CCA Convention this week - to the uninitiated CCA stands for Customer Contact Association. One of the speakers there was a guy called Peter Cochrane, who was described in the convention blurb as a ‘futurist, venture strategist and researcher with an international reputation for developing technology-driven business.’ He is also ex chief technologist at BT and founder of Conceptlabs. He’s also been presented with an OBE for good measure. Quite a guy.

With such an impressive CV I was of course keen to hear what Peter had to say - and one thing stood out above all else. Peter said the gap between Microsoft and Apple was ‘very small’. And that got me thinking. This week sees the UK launch of the much vaunted Apple iPhone - which has won the accolade Invention of the Year (from ‘Time’ magazine) - and probably quite right too.

But here’s the rub. Many Apple customers, who previously wouldn’t have heard a bad word said about the company they love, are complaining about Apple ‘acting like Microsoft does’ by taking a money driven attitude to the iPhone launch. The controversy comes from Apple’s ‘Microsoft like’ decision to launch the iPhone under an exclusive network partnership deal with 02 – and that’s gone down like a lead balloon with many of Apple’s previously completely committed customers. Many of them are now blogging their heads off about this (and some other recent ‘Microsoft like’ Apple) decision and threatening to ‘unlock’ the phone so it can be used with other networks.

For its part Apple has warned that unlocking the iPhone will make it ‘permanently inoperable’ when future software updates are released. Under the iPhone deal the actual cost of the iPhone - £269 - bears no relationship to the cost of using one. Customers have to take out contracts with 02 that start at £35 a month and run for a minimum of 18 months - total cost a whopping £899.

So Apple has moved in the eyes of at least some of its customers from being an ultra cool outfit that understands and delivers on their needs to a soulless and monopolistic machine. Does Apple care about this now it has become an establishment player? It would appear not. Looks like its ‘hardcore’ of enthusiastic fans have a rotten Apple to contend with now.

WATCH OUT WAL-MART: TESCO TRAIN GOES TRANSATLANTIC

I’ve never shopped at a Tesco supermarket - the nearest I’ve ever got to Britain’s most successful retailer is buying (competitively priced) petrol at one of its Express stores.

I am obviously in a minority because figures show that around one pound in every eight spent by Brits in the retail sector is spent at Tesco - a staggering and in some way depressing statistic, but with Tesco enjoying twice the market share of its main rivals (Asda and Sainsbury’s) combined, one not to be sniffed at.

Mind you, this market dominance is receiving close and deserved attention from the Competition Commission amid fears of ‘Tesco Towns,’ which kill off smaller stores, springing up all over the UK.

Tesco is now going to take on Asda owner Wal-Mart in its own backyard – this week (on November 8) Tesco opens its first Fresh & Easy store in California with a roll out of the chain into Arizona and Nevada over the coming weeks and months.

As I’ve said, though I’m not a regular Tesco shopper - nearest supermarket to my home is a Sainsbury’s and I can’t be bothered to go any further - I do know a bit about why it’s so successful. Tesco gives its customers what they want and when they want it at a price they believe to be fair. Tesco prides itself on keeping its shelves stocked all day - I make sure I get to my local Sainsbury’s within a couple of hours of opening time to avoid disappointment!

The most important word in Tesco’s eyes is ‘customers.’ Tesco has spent more time and effort than any other retailer - including Wal-Mart - in finding out what makes them tick and what makes them come back. Its loyalty card is universally recognised as just about the best in the business, and Tesco cleverly bought a controlling interest in the company (Dunnhumby) that developed key parts of the technology around the card - technology that has allowed Tesco to segment its many millions of customers into individual groupings of around 15 people.

Tesco understands that customers have all the money – and they want as much ‘share of wallet’ as they can possibly get their hands on.

It’s no wonder that Tesco chief exec Sir Terry Leahy, who started off in a minor marketing role at the retailer and did his fair share of shelf stacking, has twice won the accolade of Business Leader Of The Year at the prestigious National Business Awards. He and his team are tuned into their customers wants and needs, and prepared to deliver …Wal-Mart better watch out.

ROCK AND A HARD PLACE

What a difference a run on a bank makes - albeit the first time this has happened in the UK since Queen Victoria was on the throne. Talk in the money markets just a few weeks ago was of when not if there would be another rise in interest rates to add further to the credit squeeze on the UK’s ‘spend now and pay tomorrow or the day after’ consumers.

Following the run on Northern Rock, sparked by news of its exposure to the sub-prime loan crisis in the US, it looks as if interest rates will be heading in a Southern (rather than Northern) direction this side of Christmas.

This might be good news for those customers hard pressed to pay their mortgages after five hikes in a year or so – but the prospects for Northern Rock customers (especially its shareholders) are far from rosy.

As a write this piece Northern Rock is scrambling frantically to find a buyer - and is finding itself with precious few ‘white knights’ in the marketplace. ‘Vultures’ would be a more appropriate description. Chances are it will end up going for a relative song.

The fact is that Northern Rock’s reputation is in tatters. It has been caught red handed playing fast and loose with its customers’ investments (although it is by no means the only culprit) through its exposure to one of the biggest scams to hit the financial services sector in a long time - and that’s saying something.

The vivid and rather pathetic images of lengthy queues of customers (most of them individuals aged over 50 – the one’s who save rather than spend) outside Northern Rock outlets waiting patiently to remove their hard earned money will not be erased from the memory easily.

The Financial Services Authority has a system in place it calls ‘ Treating Customers Fairly’ - that rings a tad hollow in the face of this crisis, bought on by financial institutions (not for the first or last time) treating other people’s money as if it is their own. The whole sector’s reputation is damaged by this series of events. Its customers can expect more dirty laundry to be aired any time soon.