December 1, 2008 Archives

In the week that troubled furniture chain MFI went into administration, we looked at the chequered history between Watchdog and MFI. The chain was one of the first companies to feature on Watchdog back in 1980 and appeared on the programme nine times in the past ten years. Time and again people complained about problems with one thing - its deliveries.

On Friday 12 December the administrators announced all MFI stores had ceased trading and most customers with outstanding orders should now apply for a refund.

Background to the collapse
MFI first started trading in 1964, and by pioneering the use of flat-pack furniture, quickly became one of the biggest names on the high street. Later, it was one of the first chains to move to big out-of-town stores.

Victim of the credit crunch
However, along the way it has kept appearing on Watchdog. In fact, back in 1980, when it was one of the first companies we ever featured, presenter Hugh Scully was abruptly ejected from one of its stores. Now, along with Woolworths, MFI is being called one of the first big high-street victims of the credit crunch.

Yet crisis is nothing new to MFI. Over recent months it has lurched from one crisis to another and again and again it has been the same problem - actually delivering the goods customers have paid for.

Botched deliveries
Over the years, Watchdog has received a steady stream of complaints relating to deliveries. We last reported on MFI's problems in March 2008, 18 months after the company had changed hands for just one pound. At that time it promised a fresh start, with advertising that exclaimed "We've changed, have you?" Sadly, it seemed that it hasn't changed all that much and Watchdog continued to receive complaints, mostly involving botched deliveries.

Complaints to the end
Following our report in March, MFI was confident it could get its problems under control and that improvements had already been made. Yet just six months later, in September, MFI was only saved from bankruptcy by a last-minute management buyout. We were told this move would secure the future of MFI, but it didn't. Right to the end the complaints kept coming, some of them all too familiar.

When Natalie Poulter's MFI kitchen arrived in October, there was no sign of the dishwasher and a fault with the base unit meant the sink couldn't be installed. Ever since, Natalie (now six-months pregnant) has had no running water downstairs. Natalie told us: "I have to do the washing up in our bath every night and that's not very easy when you're bending over the bath with a bump in front of you. I just think they've really let down their customers."

One customer still waiting told us she'd hoped to have all her bedroom furniture by Christmas. That's Christmas 2007. The latest delivery date she'd been given for the missing parts was January 2009, 14 months after placing the order.

In a desperate attempt to delay the inevitable, last week MFI was offering the public discounts of up to 70 per cent off. But it was too late. As cash-strapped customers stopped spending, MFI had problems paying the rent, and even their own drivers and fitters. So it was no surprise when, last Wednesday 26 November 2008, the administrators were called in.

Customers and staff clearly upset
The next day, many customers headed down to MFI stores to find out what would be happening with their own outstanding orders. Many left doubting they would see either their original orders or their money again.

Elsewhere, customers were more scathing about the reason for MFI's downfall - blaming poor service. And it wasn't just anxious customers concerned by the news of MFI's move into administration. Some of the company's fitters were clearly upset too, claiming they were owed payment for jobs.

The brand lost focus
To some, the signs of trouble were clear to see. As branding expert Jonathan Gabay explains: "The market moved on, it's as simple as that. And the brand itself lost focus. There were other competitors coming in and MFI was losing credibility. And you know that when you get a brand that loses credibility the word passes from one person to the next person and you've got a problem."

For the moment, most of MFI's 111 stores are open - but for the sale of display stock only. Staff can't take new orders or give refunds. The administrators have already announced that 26 stores will definitely close but what will happen to the rest is uncertain, leaving hundreds of jobs at risk.

But Jonathan Gabay believes we may not yet have seen the last of MFI: "There has been reported interest from prospective buyers, so perhaps the MFI brand will, miraculously, survive. But it's all a long way from the days when this was a billion pound business - the biggest name in furniture."

Phil Duffy, speaking for the administrators MCR, had the following to say: "This is a difficult time for all parties concerned and we are doing everything we can to ensure that the best result for all creditors is achieved."

The announcement on 27 November 2008 that MFI had gone into administration left many customers uncertain as to the fate of their orders. However, finding out more, certainly in the next few days, may prove difficult. The most up-to-date information can be found on the MFI website and on the administrator's website - MCR.

Current installations and future orders
According to the latest information provided by the administrators MCR, all installation works have been suspended until further notice, as they continue their review of the company's position. No further customer orders are being taken and, although the MFI stores remain open, it's for the sale of display stock only.

Scheduled deliveries due up to 7 December 2008
Orders due for delivery or installation between Thursday 27 November and Sunday 7 December 2008 have now been cancelled.

Customers who paid by credit card are encouraged to contact their credit card providers directly in order to seek a refund.

Those customers who paid by cash, debit card or cheque will be contacted shortly, to advise them as to the status of any possible refund.

Scheduled deliveries due on or after 8 December 2008
Customer orders due for delivery/installation on or after 8 December are still being assessed as to whether or not they can be fulfilled. Further details regarding the fulfilment of those orders will be posted on the MFI and MCR websites as soon as this information becomes available.

MCR says that as soon as the position becomes clearer customers will be notified accordingly.

Finding out more
It's worth noting that customer order queries are not being handled by the stores. Stores are also unable to deal with any refund queries.

By telephone
The customer service numbers remain open daily from 9am to 6pm, but again can not give any further details regarding specific orders. The numbers are 01405 744813 during the week and 0870 607 5054 at weekends. The call centre is experiencing a very high volume of calls, so if you do decide to call it may not be possible to get through on the first attempt.

By email
You can also email your query to customer.services@mfi.co.uk. Again, due to high volume of enquiries, and the ongoing review of customer orders, it may not be possible to reply regarding your specific order at this time. There is a high volume of emails and therefore it may take several days to provide you with a reply

Alternatively, if you need to contact the administrators you can do so by emailing the dedicated address mfi@mcr.uk.com. They say that one of the administrators' team will endeavour to deal with your query as soon as practical but that the office is presently experiencing a high volume of emails.

Watchdog update Monday 22 December 2008
The MFI administrators are providing up to date information and advice for customers on the MFI website, which includes what procedures customers with outstanding orders should follow.

Watching sport on TV is for many of us a great way to relax and spend time with friends and family. But over the past few months we've received a large number of complaints regarding one particular broadcaster, Setanta.

Frustrating experience
Setanta Sports has become a major provider of some of our favourite sports viewing and in some cases it's the only place to see certain fixtures, bouts and races. When you subscribe to Setanta's satellite service you get 11 exclusive channels for £12.99 a month. But for those of you across the UK who contacted Watchdog it appears that you're having a frustrating time viewing all 11 channels - not to mention getting Setanta to help resolve the problem.

In Hertfordshire, Chris Doyle chose Setanta because he and his family are all sports fans. However, since subscribing he has had a lot of difficulty receiving a good enough picture to watch some of his favourite sports. As a result his family and friends just don't bother coming around anymore.

In Wales, Laura Williams and Allen Jones subscribed to Setanta 18 months ago and have never been able to get a clear picture. With a young family they couldn't go to the pub to watch their favourite teams play so they get their footie fix at home. But the picture problem, according to Laura, was only the beginning of their troubles.

Disappointed with customer service
She has been extremely disappointed with the help she sought from Setanta's customer services, especially when she tried to cancel their subscription.

She says that Setanta: "Hasn't even had the decency to respond. The company left it too long now and it's gone on too much and too little has been done about it."

Professor Martin Tomlinson, an expert in satellite technology, has tested Setanta's signal. He says that one of the reasons people have had difficulties receiving Setanta is that it's broadcast from a satellite called Eurobird 1 whereas most other major channels use the ASTRA satellites. When installers set up your dish they can't point it at both satellites.

When we were invited to Setanta customer Dave Marshall's home in West Sussex, we brought installation expert Kevin Dawson to have a look at his satellite set-up.

It's a simple dish alignment problem. Nine times out of ten it's the dish, skew or cheap cable or a combination of all of them.

In most cases this can be fixed easily and only takes a few minutes. But the key question customers like Dave Marshall are asking is:

"Why didn't Setanta tell me it's an installation problem?"

Setana's response
When Watchdog contacted Setanta it refused to discuss individual customers. It said:

"Most of the time we are successful, and most customers are very happy with the sport that we serve up to them. However, from time to time, and for a variety of technical reasons, a tiny minority of customers have difficulty receiving the signal for Setanta Sports and the other channels that the company broadcasts.

"It is our firm belief that this is not a Setanta-specific problem. Setanta is a television producer. It does not own or operate the satellites that are used to broadcast its programming, nor does it install or service the satellite dishes (or other equipment) that are required to receive its pictures.

"Setanta recognises that in a small number of cases customers may need to adjust the alignment of their satellite dish in order to receive a satisfactory signal from Setanta Sports. As stated above, Setanta does not employ its own fieldforce of satellite dish engineers. However, we will endeavour in future to work more closely with BSkyB to identify customers who could benefit from the visit of an engineer."

The company added:

"Following Watchdog's investigation, we will give further thought to how we might publicise the importance of correct dish alignment, and improve our procedures for resolving problem cases."

Setanta recommends that customers contact the company that installed their satellite equipment in order to make the necessary checks on dish alignment.

Official figures say one in four pensioners live in poverty. The Government promised to put an end to that by 2020, but in the mean time, it's making some older people even poorer. Thanks to mistakes by the Department of Work & Pensions (DWP), a quarter of pensioners have been left either short changed or in debt.

Why did the overpayment happen?
Nancy Copper's daughter Pauline was outraged when a letter from the DWP was sent to her 94-year-old mother demanding over £2,000. The letter stated that this was because Nancy had been overpaid Pension Credit. However, it failed to specify why the overpayment had happened.

Nancy is just one of the millions of people getting pension credits, which is a means tested benefit, to top up her state pension. Nancy was upset and very concerned over the letter because she had never been in debt in her life.

Daughter Pauline spoke to the DWP but nobody could give her an answer as to why her mother had been overpaid. It did say Nancy should never have received the letter demanding the £2,000. She eventually received a second letter from the DWP in which the department apologised. It stated: "I'm writing to apologise for you receiving the letter of overpayment and can assure you this money does not have to be paid back in full."

However, although Nancy did not have to pay the amount back all at once, the DWP still planned to deduct £3.50 each week from her benefits.

Government confesses to messing up a third of all pension credits
So, though Nancy still didn't know exactly why the overpayment had happened, the DWP had already started to make deductions from Nancy's pension to pay back the money. It would be no surprise if her overpayment turned out to be the fault of the DWP. In October the Government confessed to messing up a third of all pension credits - that's £290 million worth of mistakes.

Clearly the Government isn't wasting any time getting back the money it has overpaid to people like Nancy. But, when it has made a mistake and underpaid pensioners, it's a very different story.

Gladys Haxell is a former darts champion and a mother of eight. She has dementia, so daughter Carol looks after her finances. In 2005, Gladys had a visit from The Pension Service who informed Gladys that she shouldn't have been getting pension credits at all and immediately stopped her payments. This cut her income by £63 a week. Carol phoned the DWP to query the decision but it insisted it was correct.

But two years later, Carol discovered that the DWP had actually got it wrong and that Gladys should have been getting the payments all along.

Optician spots mistake
But it wasn't the pension service which spotted the mistake. It was Gladys's optician! Following a routine visit, the optician asked what benefits Gladys was on. When he discovered that she was not on pension credits he suggested that Carol ring the DWP to get her mother re-assessed. She did so straight away. Sure enough soon after Carol's phone call she got a letter awarding Gladys £68 a week of pension credit.

Since then, Carol has been fighting to get her mother back the money that shouldn't have been taken off her in the first place. The mistake has cost Gladys over £6,000. Carol assumed that once the Government realised it hadn't being paying Gladys enough money, it would do the decent thing and pay back the difference.

She was wrong. Carol was told that in cases of underpayment, the DWP will pay back no more than 12 months of payments, regardless of how long the underpayment has been continuing. So, despite having missed out on £6,000, the most Carol would get back would be £3,000.

This rule changed on 6 October 2008 - for the worse. Now the DWP will pay back no more than three months of payments to pensioners it has been mistakenly underpaying.

Horrified by the situation
Nicky met Mervyn Kohler of Help the Aged to discuss the two cases. Mervyn was horrified by both situations and said: "We have got to treat people like that who are vulnerable with much more sensitivity. That's after all why we have a benefits system in the first place. There is no natural justice in that situation whatsoever. There ought to be a common set of rules here."

The DWP has released the following statement: "We apologise unreservedly for the distress and inconvenience caused. Clearly, mistakes were made and we have sought to rectify them as quickly as possible. We are grateful to Watchdog for bringing these cases to our attention.

"We always strive to provide our customers with a good service and are extremely disappointed that we have failed to do so on these two occasions.

"We will learn from this and are currently reviewing our procedures to ensure it does not happen again. Our staff are dedicated to the service they provide and each week we pay out around £1.6 billion of benefits across the DWP. This includes around £140m each week in Pension Credit. In the majority of instances, we do this in a professional and caring manner. We hope these isolated cases do not put off others from applying for the help that they are entitled too."

The DWP has also paid all outstanding arrears to Gladys and said it will no longer seek to recover the overpayment from Nancy due to new information coming to light. It has also offered to visit Nancy and explain everything to her in person.

Watchdog update Monday 22 December 2008

There's good news too for pensioners Nancy Copper and Gladys Haxell, who had been sent letters from the Government telling them that their pension credits had been miscalculated. Nancy had been asked to repay a lump sum of £2,000 because of an overpayment, which was then reduced to £3.50 a week. But she didn't see why she should have to pay back money for someone else's mistake.

Former darts champion Gladys hadn't been receiving the pension credit she had been entitled to. It totalled £6,000 but because of a Government rule about how far back they can refund underpayments she was only going to receive half of her entitlement.

Following Watchdog's report, both ladies have had their payments rectified. Nancy was visited last week by the Department for Work and Pensions who told her that she didn't have to pay back any money at all. She said she was delighted.