RIP OFF UK

RIPPED BY RETAIL!

Origins
The phrase Rip-Off Britain came out of a campaign run by the Consumers' Association in 1998 aimed at lowering car prices in Britain, which were at the time, and despite legislation outlawing it, significantly higher than the EU average.

The Consumers' Association hired a stand at the British International Motor Show, only revealing on press day its true purpose. The organizers (SMMT, Society of Motor Manufacturers and Traders) decided not to fan the media flames by ejecting the Consumers' Association.

The phrase, "Rip-Off Britain" had already taken a hold on the media and it became a term in frequent media usage, used to describe anything that was wrong with Britain. Along the way, it proved to be one of the elements that led to a tipping point for car prices, with prices harmonizing with the EU very quickly.

The campaign was devised by UK advertising agency Claydon Heeley, who are known for this type of "guerrilla" work.


Rip-Off Britain Today
Other products which still cost significantly more in Britain include:

CDs and DVDs
Computer Software - the most notable example being Microsoft Windows Vista
Books
Electrical Goods
Houses
Petroleum and diesel fuel
For example: The PlayStation 3 costs approximately £120 more in the UK than the US.

The defence generally used by companies subjected to "rip-off" complaints is that some of their fixed costs are higher in the United Kingdom than elsewhere. The amount of substance to this defence varies from case to case. Also, the level of indirect taxation applied to some products, such as alcoholic drinks and tobacco, varies widely from country to country.

While the UK rate of VAT is 17.5%(currently reduced for 1 year to 15%), price differences are often far larger than this. For example when Playstation 2 was launched it cost $300 in America and £300[1] (this equated to around $435 dollars in November 2001) in the UK; about 38% more than the US price, once an average 5% ($15) US sales tax is added. Something else that is often not taken into consideration is that US prices are quoted before tax, while UK prices generally already include VAT. This would put the £300 UK Playstation 2 at about £255 before VAT or $370.

However, the VAT argument is something of a red herring. Firstly, the UK rate of VAT, while high, is by no means the highest in the EU - indeed all but three EU countries have higher standard rates of VAT than the UK. Secondly, Jersey and Guernsey (UK Crown Dependencies) - are the EU's most significant VAT-exempt zones. Retailers such as Play.com operate from Jersey specifically as a means of VAT avoidance, but this has little impact on the prices UK customers continue to pay for goods.

However, the price differences compared to the US and Asia are also existent in other European countries.

Another example is Microsoft Windows Vista, whereupon release it had an RRP (Recommended Retail Price) of $249 (£127) in the United States and £249 ($487) in the United Kingdom. This makes it almost twice as expensive to buy in the UK than in America, which tax differences alone cannot account for. [1].

The Apple iPhone provides another dramatic example. At its introduction on 11 Nov 2007 the British were asked to pay 40% more for the phone than their American counterparts. The phone was sold in the UK for $562 (£269) while the same device could be bought in the USA for $399 directly from AT&T. Apple clearly views Britain as "Treasure Island", the Apple TV was sold in Feb 2008 for $229 to US customers (http://apple.com/appletv) but for a much higher $391 (£199) to UK customers visiting the same site (http://www.apple.com/uk/appletv/). Other Apple products have a similar price ratio, UK customers expected to pay a heavy premium.

Yet another example is books. Amazon.com provides a good opportunity to research the "rip-off Britain" effect because books are an international commodity item whose price is unaffected by tax in the UK. As an example, John Grisham's book "The Broker" is listed at £6.99 ($13.74 on Feb 2, 2007) at the UK Amazon site and $7.99 for the same item at the US site. A strong pound cannot explain away this 71% price difference. However, the same book could be purchased at UK supermarkets such as Tesco Extra and Asda for less than £3.99.

Also, the IKEA 2008 catalogue carries products priced at more than double that of European versions of the catalogue. Examples include a kitchen pictured in the German catalogue costing €1275 ( = £954.37 - www.exchangerate.com). In the UK catalogue, page 103, it's massive £2115 ( = €2825.5 - www.exchangerate.com) which is obviously more than double. Another example, page 6 "BESTA Bench Combination". In the UK costs £258 (= €344.68), costs in Germany €152 (= £113.78) which is again less than half. IKEA cite "shipping costs & taxation of goods" as reasons for the price difference.


Effect on Internet Retail
Perceived or actual higher prices in the UK often have the effect of making British consumers order goods from the Internet, whether from UK businesses claiming to break a pricing cartel (e.g. CD WOW! for CDs, TheHut.com and Play.com for CDs, DVDs, videogames and books, and Glassesdirect in the prescription spectacles business) or directly from abroad, including via eBay and other online auction sites. See UK Internet business.

Most USA Internet retailers are happy to ship directly to consumers in the UK which provides a welcome relief from the heavily inflated UK prices. Many believe that true competition from the Internet and from abroad will eventually normalize retail prices and put an end to the suffering of an angry population tired of being referred to as "Treasure Island".

However, there are significant exceptions to the rule. The biggest player in music downloads, Apple's iTunes, operates a model where purchases can only be made in a domain where the users' means of payment is registered. UK customers are therefore tied to the offerings in the UK iTunes store - a disadvantage both in price terms (79p/download in the UK is significantly more than 99c/download in the US) and in terms of available choice. On 9th January 2008, however, Apple conceded that this was unfair practice and promised to harmonise prices with Europe within 6 months, citing the record labels wholesale music price as the reason.


 

DID YOU KNOW :-

The early 1970's saw a massive invasion of foreign companies to our shores.

Attracted by generous incentives and by a Government that was trying desperately to stem the rising tide of unemployment, together with a poor balance of payments, large foreign corporations took up residence that had previously been denied to them.

The government was probably unaware that many of these foreign companies had already secured a foothold in the UK many years before, as early as 1950 - and that they had been working under a secret agenda buying up millions of shares in UK companies, waiting for the day to penetrate one of the most lucrative markets outside of North America and continental Europe.

In the boardrooms (often controlled by British-expatiates and Commonwealth conglomerates!) these overseas companies saw Great Britain as a goldmine.

They secretly called the UK "The Goldcoast" and "Treasure Island" - and rightly so. With a population of over 50 million filled with naive British consumers who had money to spend after a rather successful decade in the 60's, and with rising house prices, the cash registers started plundering the population. And plunder they surely did.

Not content to make a reasonable profit, these companies had (and still do) a field day. By paying low wages, in a regime that did not have a minimum wage or strict labour laws, to a rather generally unskilled naive workforce, and charging excessive prices for their goods, often in a cartel created by their greed, to a populace who rarely complained, their profits began to balloon.

Thanks to Government policies, such as the Resale Prices Act of 1956 and 1964 which strangely allowed companies, both foreign and domestic, to lawfully withhold supplies to retailers who wanted to sell their products at below the 'recommended' retail price in order to attract customers, the mother of all Rip-Off's was born.

Fueled by inflation, decimalisation, government tax incentives and finally by EC grants in the mid-1970's the rape of Britain was in full swing. Their shareholders saw their stock rise as literally billions of Pounds flowed out of the UK into foreign coffers.....and still does !!

The Government is spending £12,000 of taxpayers' money every second (slightly more than what BT earns a minute)
Average Family car in UK- £12,000 Average Family car in Holland - £9,000

To fill an Average family car with petrol in the

UK costs £50 or $80

To fill the same car with petrol in the USA costs £15.07 or $24.11
Pack of 20 cigarettes in the UK - £5.00 Pack of 20 cigarettes in Spain - £1.60
Pint of beer in pub in UK- £2.30 Pint of beer in pub in spain - £0.80p
Six pack of beer in UK - £4.20 Six pack of beer in Germany - £2.40
TV licence in UK - £121 TV licence in USA - $0
30 minute local phone call in UK - £0.40p 30 minute local phone call in USA - $0
These are old statistics, who knows what will happen in another 10 years, as resession is creeping up and big companies such as Woolworths and MFI have been hit by the credit crunch what will happen next?, unemployment is on the rise 1.84 Milllion people out of work, how many of them are english?

Anger as British Gas profits soar 500%

Homeowners reacted with fury today after British Gas revealed a five-fold increase in profits. The £571m windfall - up from £95m last year - comes weeks after it stung 13m customers with a 15% increase in bills.

The average household now pays £1,000 a year. Group-wide earnings for Centrica, which owns British Gas, rose to a record £1.95bn, guaranteeing huge bonuses for bosses.

The profits came after a year which saw the wholesale price of gas fall between January and March - but no cut in household bills as a result. Consumer groups today accused the utility firm of ripping off the public.

Fuel campaigner Lesley Davies said: 'It's quite sickening when companies make these huge profits while, at the same time, we are expecting 25,000 excess winter deaths as a result of people not being able to keep warm.'

The soaring Centrica profits, up 40%, also sparked calls for an investigation into the retail energy market. Joe Malinowski, who runs energyshop.com, said: 'The first half-year profit was absolutely extraordinary. The money was just flowing through the door.'

The fall in the wholesale price of gas, due to a mild winter and new supplies from Norway, stopped last summer and since then it has nearly doubled, ending the bonanza.

British Gas said it had been a 'year of two halves' as a result. It added: 'Sharp falls in the price of gas in winter 2006 led to unexpected profits in British Gas early in 2007, but rising costs later in the year also mean that analysts expect margins in the second half to be very thin.'

Adam Scorer, consumer lobby group energywatch's director of campaigns, said: 'No one is going to argue that energy companies don't need to make a profit. However, British Gas customers will want to tear their hair out when they hear the scale of these profits and compare them with their own rising bills.'

Centrica said it needed big profits to pay for investment in new gas generating plants and wind farms to meet government clean energy targets.

Allan Asher of energywatch said: 'The time has now come for the Government to find out what is going on in the retail energy market, to ask why competition is not working for customers. The companies are making a fortune out of their customers and the Government is doing nothing about it.'

Ann Robinson, director of consumer policy at uSwitch.com, said: 'Today's announcement boils down to profits and price hikes and reveals the depth of the divide in how British Gas treats customers and shareholders. This company has given up all pretence of keeping a healthy balance between the two. Consumers have a right to feel like Britain's biggest energy company is taking them for a ride.'

Paul Schofield, head of utilities at price comparison site moneysupermarket.com, said: 'Five out of the six energy giants have announced a combination of price increases and new products over the past six weeks so now is an excellent time for users to make sure that they have the best provider and product for their area and consumption.

'Online monthly direct debit accounts, are the cheapest products available, merely requiring customers to have an email address and apply online. There is no need for customers to manage the account online as payments are by direct debit.'


How Rip-Off Britain started

In 1986 I campaigned British Telecom to itemise their telephone bills. It was absurd that a phone bill only showed the 'final amount to pay', leaving the consumer no idea whether phone calls were accurately recorded or not and, more importantly, leaving no recourse for challenge or complaint! It was akin to going to the petrol station and filling up the car with no visible pump meter present - and then handing over £X amount! After arriving back from Canada (where phone bills had been itemised for years), this was my first rude awakening to 'Rip-Off Britain'.

The 'Rip-Off Britain' campaign got into full swing in 1998 when I launched my website in an effort to get justice for the British public. I have since appeared on BBC2 Newsnight, Sky News, numerous national and local radio stations and talk shows, have written various articles, and have even 'duped' the scammers at their own game! I continue to vigorously campaign for the British consumer in one the most expensive, 'cutthroat' and consumer exploited countries in the World.

The Rip-Off continues

The phrase "Rip-Off Britain" was originally coined during 1997 due to the vast difference in car prices in the UK - as compared with the rest of Europe. 'Rip-Off' is now part of our everyday language - especially when we realise or discover to our horror, anger and dismay we've been duped, scammed, 'taken for a ride', or have been plain diddled out of our hard earned money by shoddy goods, poor service, unscrupulous or sharp business practices, exorbitant charges, etc.

My aim is to ensure that 'Rip-Off Britain' remains ingrained in our mind-set, by reminding people to be more vigilant in their purchases and everyday dealings. However, if you do unfortunately get 'ripped-off', you're going to discover that by using my proven methods & tactics of complaint, you'll achieve a satisfactory outcome and a result in your favour in the majority of cases.

Public awareness behind the British 'rip-off' culture has vastly improved over the past decade or so. But despite our efforts and the many media campaigns on TV & Radio, the 'so-called' voluntary business codes of conduct that is supposed to be the 'magic bullet' to protect us all, and successive Government intervention by often weak and ineffective legislation; there are STILL significant areas within our economy and throughout society where British consumers are continually being Ripped-Off!

Quote of the Year
"Never keep up with the Joneses. Drag'em down to your level. It's cheaper".

Britain's Top Rip-Off's
As polled in a survey of over 8,000 e-mail and website responses from 1999 to 2005
(presented in random order)

Fraudulent schemes & scams

 

Shoddy goods & poor service

Unqualified & rogue trades people

 

Unscrupulous business practices

Bank charges & bad practices

 

Fraudulent e-mails

Water & energy companies

 

Council Tax *

Railway fares

 

High interest store & credit cards

Mobile phone charges

 

Capital Gains Tax *

Fuel duty *

 

House selling/buying practices

Inheritance tax *

 

Stamp duty *

Speed cameras *

 

Premium Rate phone numbers

Postal charges

 

Wages below the minimum

Low Old Age Pensions

 

High taxation of the poorest *

Motorway restaurants

 

Endowment policies & mis-selling

The demise of Final Salary pensions

 

Government wasting our money

Membership of the Euro

 

Stealth taxation *

CD's, DVD's

 

Car prices

Electrical goods

 

Hotel accommodation

TV Licence fee *

 

Food prices (supermarkets)

Extended warranties

 

Loan protection insurance

Import duty *

 

Value added tax (VAT) *

*Government taxation

 

So, who's the culprit? Who's ripping us off?

After years of analysing this question and looking at the evidence (apart from the rogue plumber who just charged you £150 for a call-out to fix a washer), I've concluded that multi-national business conglomerates and our Government are the main culprits who have helped shape, and continue to maintain a 'Rip-Off Britain'.

Small and medium-sized business is often blamed for ripping us off either by their high prices, poor service, or both. Although this may have been the case many years ago, the vast majority of our 'home-grown' businesses are generally serving customers quite well - it's only a small percentage that rip us off which gains media attention and fuels our wrath. Poor service can be blamed purely on mismanagement and inadequate resources. High prices in the UK as compared with many other countries is another matter!

The major handicap to small and medium-sized businesses in maintaining low prices can squarely be blamed on a number of factors including, poor banking practices and banks grossly overcharging for their services (UK bank profits at £32bn!), high interest rates (as compared with the EU average), virtually uncontrollable commercial rents and high property prices, exceedingly high business tax rates, labour costs, high import duties and, of course, the high cost of transportation (fuel duty).

The high operating costs of running a business, combined with endless Government regulation, UK banking practices and multi-national profiteering, remains a major contributory factor that's induced a negative affect by forcing UK businesses to mark-up their goods and services far higher than is compared with many European and other countries in World - especially the USA! The end effect leaves UK businesses little option but to charge higher retail prices upon consumers. However, contrary to what many people may believe, 'home-grown' UK business profit margins are not excessive as compared with other 'home' businesses in the G8.

The multi-national corporations, with their massive buying power and profits, have been on a quest to capture the massive UK market since the early 1960's. Because we live on an island, they know only too well that cross-border shopping (such as commonly occurs in continental Europe without much Customs interference) is not really feasible for us 'islanders', especially with punitive Government import tariffs and restrictions on the value of some goods coming into the UK.

Since the introduction of the Internet, and where people can (according to EU law) buy goods from within the EU without import duty or UK VAT (which is generally paid in the EU country of origin - vehicles still being the exception), the multi-nationals (and the Government for tax revenue raising reasons) don't really want us to join the Euro in a hurry, where prices could be immediately compared and the abolition of current Custom controls would surely happen. Not being satisfied with their current market capture, with the Euro on the horizon, the multi-nationals are now seizing on this 'opportunity' by either squeezing out 'home-grown' UK businesses or buying-out their operations. Because of this 'imbalance' within the UK market place, the demise of the 'corner shop' and many other businesses, is now happening at an alarming rate.

Trading on the Internet, in order to keep overheads to a minimum, is fast becoming the only viable option for many UK businesses, and has indeed been driven by the consumer in their quest for lower and more competitive prices. Unfortunately, buying goods over the Internet is not always as competitive as consumers would believe - but of course, it's certainly the best place to compare prices.

The constant drive by multi-national companies to increase sales and create massive profits for their shareholders has fueled their expansion throughout the World in order to secure more markets and even greater profits. Many have created massive business cartels - many of whom trade away circumventing regulation because of their international corporate structure, whilst paying minuscule amounts in corporate tax. Combined with the zealous necessity (or by mismanagement) of Government to raise revenue by stealth, has created a monetary vacuum in a world that's bent on GROWTH - with the ordinary consumer (along with the poor in third world countries), 'sandwiched' in the middle of these two massive 'empires'.

As an Island (known as 'Treasure Island' in corporate circles), the UK has been literally plundered by both multi-national corporations and successive Governments over the past 50 years. But it's now time for the ordinary consumer to fight back - and many are doing just that!

Unfortunately, the ballot box just isn't working. Whatever Governments' in power they continue to raise massive tax revenues year after year (any increase is inflationary!), whilst invoking ever greater regulation by wasting billions in taxes to placate an ever increasing 'politically correct' agenda, and by creating 'social engineering' using stealth legislation. When Government declares a Budget and increases tax revenue by stealth, it becomes directly responsible for actually increasing the price of goods and services. But many big businesses have realised that consumer backlash is in full flight - and are at least trying to address our complaints. Others have yet to learn, and will ultimately fall foul by consumer pressure.

Depending upon your personal grievance or complaint, the phrase 'Rip-Off' is now being used to describe not only an array of different consumer issues, but other seemingly non-related issues. In the future, I'm sure this infamous phrase will be used to describe almost anything we disagree with or are concerned about, from our dwindling oil & gas reserves and faltering energy policy, to Global Warming.

 

If you wish to read further information regarding rips offs in the UK click here!

 

If you want a good example of how we are being ripped off by religion, governments and multinational companys look for ZeitGeist on YouTube

 

This page was last updated :