Data protection
Not least, above all else, professional Installers would be well advised to bundle all available data and seek advice from the Information Commissioner’s Office as to where they stand if they do decide to take up the offer. Current data offers no advice on that and we believe it should at the outset.
Conflict of interest
First and foremost, like CORGI, OFTEC is a registration body. First and foremost HPL arrange warranty insurance. This new scheme threatens to blur boundaries. Indeed it does so. It is not difficult to envisage a situation where OFTEC’s historical role and HPL’s historical role, uncomfortably collide their new role. A situation where, in effect, the technical referee is also a sponsor of one of the teams on the field.
Advance fee
Aside from the first imperative, data protection, an advance-fee is required of the Installer. That automatically, by default, makes the scheme totally unacceptable. Never, ever, under any circumstances whatsoever, pay an advance-fee for anything; A professional Installer does not need to buy work.
The Financial Services Authority told Gas-News that HPL is a brokerage. Professional Installers have something HPL want. That is the professional Installers’ customers. Obviously no professional Installer is going to fall for that and, would you believe, actually pay good money to hand customer details to HPL on a platter (?)
Not only is there an initial fee to join the scheme, Installers will be charged a fee for each customer referred to the scheme. So with each installation or service, Installers will be asked to hand over a fee to HPL. Are these people for real ?
Our concern is for the less experienced - in business – Installer, who may be dazzled by the waffle contained in the OFTEC letter and leaflet. We ask professional Installers to help guide them along the safe path, well away from the advance-fee brigade and other hazards.
Muddle
The cart seems to come before the horse on the OFTEC letter, which states that your customer can contact the HPL arranged 24 hour call centre. Presumably in the event of need for a service call.
That is followed by the bit which should have come first. Your customers will be offered insurance, which is primarily what this is really about. There is the usual bronze, silver and gold on offer, which you as a professional will already have ensured, as far as humanly possible, is unlikely to be needed. But we advise you to check any small print.
Breakdown cover
In principle breakdown cover is perfectly normal, which for some consumers might be worthwhile, particularly those without their own familiar face in the trade. The insurance company in this scheme will benefit from knowing that all customers referred, have had their installation seen by an OFTEC registered engineer. They can’t lose.
The amusing bit is that Installers are being asked to pay to introduce their own customers to the insurance company, over which they have no control whatsoever.
The OFTEC letter suggests ‘Other industry schemes from HPL normally cost £150 or more to enrol’. Do they mean oil or other subjects. Ask yourself this, if a customer needs an oil engineer, who are the insurance company going to telephone. They will be obliged to use OFTEC engineers, assuming they have any in the ordinary course of events.
You are already paying dearly for OFTEC registration so why pay more to ensure people are referred to you who must be referred to an OFTEC engineer in any case. Remember that you will generally only be offered your own customer back. Those customers may or may not be insured separately for certain events. Ask them to check.
Traditionally insurance companies have sought out trades they require and reached an understanding. The people at Gas-News have plenty of experience of that to call on. But never have they paid anyone to join any scheme, of any description. You must defeat that principle now.
It gets worse
Not only are they asking you to hand them your customers on a platter and pay twice for the privilege. They then want you to claw back the customer’s policy excess (£50) and wait goodness knows how long for the insurance company to pay out; Historically insurance companies were always at the top of the slow-payers league table.
The leaflet also suggests the joining fee is payable at ‘initial application and renewal stage’ which presumably means an ongoing commitment on top of the per capita cost.
Warranty insurance
Installers are required to offer an insurance backed warranty to customers for certain works carried out under the Building Regulations. The customer does not of course have to accept the offer. And even if they do, you do not have to pay for it. Simply point the customer in the direction of insurance companies offering warranty insurance.
Professional Installers will not of course have customers asking for such assurances following a sustained period of mutual goodwill. It would be unthinkable.
Prices
Note the prices being quoted for call-out work. £100 minimum plus £25 per half hour thereafter. Prices obviously vary around the UK but how many Installers will hit their customers with that class of money routinely. Someone has to pay for that level of pricing plus the broker’s overheads and profit and the insurance company's overheads and profit.
That someone could be you paying for a new and unnecessary tier of administration.
Notes
- The leaflet does suggest that Installers can nominate two OFTEC back-up companies if they are unavailable to attend a breakdown. Theoretically therefore your customer details will not be passed to an unknown third-party. It would however be wise to monitor that process, should the need arise.
- Unlike CORGI, OFTEC are not abusing the Gas Work Notification database.
Bottom line
- Never under any circumstances pay an advance-fee for work. No exceptions.
- If you have a loyal customer base, bin the letter and leaflet.
