BT Group’s men at the top have changed but not the contemptuous attitude towards its long suffering customers. No wonder people like myself, who once felt comfortable with BT and wanted to stay with it, have gone elsewhere.
Readers may well remember that BT decided unilaterally that its customers should pay its banking charges. When a legal challenge was mounted, BT failed to take the hint that it had embarked on a disastrous public relations exercise. Instead, it went to the trouble and expense of setting up a separate company to make the arrangement legally watertight.
Now BT is throwing good money after bad by bombarding former customers like me with letters urging me to return. I never wanted to leave in the first place but I do not want the upheaval of going back to a company that has so little idea of how to treat its customers.
Further proof is provided by events in the Oxfordshire village of Hambleden, where BT chairman Sir Michael Rake has been supplied with broadband despite the fact that BT cannot provide the service for anyone else there.
Residents of Hambledon are understandably annoyed that the BT chairman gets preferential treatment but that is not the bit that bothers me. I am sure that many company directors get preferential treatment from their own companies. What is truly astounding is that BT claims this is part of an exercise to establish whether providing broadband in rural areas is commercially feasible.
One wonders if BT is trying to convince itself, as it certainly won’t convince anyone else. How can providing broadband to one person who will not be paying for it establish whether it is commercially viable?
What a coup it would have been if BT had offered broadband to the entire village to see what the take-up rate was. Then it would have signed people up to provide some income towards the cost of providing broadband for its chairman and could claim that it was making genuine efforts to extend the facilities to deprived areas.
Until BT can grasp simple issues like these, it is hard to see how it can cope with competition. It has survived this long simply because of its entrenched position as the former national telecoms provider. As its monopoly is chiselled away, the only way is down.
To read Morningstar's analysis of BT, click here.
The Lloyds scandal (continued)
Not since I suggested that Northern Rock shareholders had only
themselves to blame has my weekly missive provoked so great a response
as I received this week in the wake of the latest Lloyds
Banking Group revelations.
There is one big difference between Rock and Lloyds. As several correspondents pointed out, many small shareholders, possibly the majority of them, did vote against the patently disastrous takeover of HBOS but they were outvoted by large institutional shareholders who ought to have known better.
On reflection, I did those sensible shareholders an injustice.
One correspondent argued that institutions with shares in both banks pushed through the deal to rescue their holdings in HBOS. If that was their motive, they were doubly stupid. Previously they had stakes in one wrecked bank and one sound one. Now they have stakes in one wrecked bank.
Inevitably, the prospect of an American-style class action has been raised. Normally I am against suing. As I have often argued before, if you make a mistake hold up your hands and move on. However, the gross deception that was perpetrated on Lloyds shareholders is a different matter.
Legal action is fraught with dangers, though. It is no use suing the company itself because that would be suing yourself. The Lloyds directors certainly deserve to be sued but it would be necessary to prove that they were aware of the scale of the problems at HBOS. Given that they failed to carry out due diligence in the unseemly rush to get the deal through, they may be able to plead ignorance.
I’m not a lawyer and I would welcome comments from any legal eagle who happens to read this column (as long as the advice is free) but it is harder to sue in this country than in the US.
Another correspondent points out that the rights issue document from HBOS on June 18, 2008 stated that HBOS had sufficient working capital for the foreseeable future yet interim accounts to June 30 showed that £155.9 billion of short-term funding had to be repaid within 12 months. How did the FSA allow them to get away with the right issue statement? he asks.
I have a feeling we have not heard the last of this one.
To read Morningstar's analysis of Lloyds, click here.
Two wheels good, two wheels bad
More on the saga of my friend who could not find out how much tax he
would have to pay on motorcycle fairings imported from China, which
ended with no tax imposed when the parcel arrived.
Hugh Thomas, a reader of this column, emails to say that his son has just imported 100 folding cycles from China and has been hit by nearly 50% anti-dumping tax which needless to say has wrecked his sales margin.
How does one find out before being pole axed by an import duty demand? he asks. The answer, as I discovered, is that you probably can’t. In fact, son Edward tells me that he did try to find out but the HMRC site is, as he rightly says, very complicated.
