Powerplan / Scottish Power - Missold Cashback Warranty on White Goods

[Amethyst]

Did you buy white goods ( washing machine / fridge freezer / dishwasher etc) through Scottish Power in the late 1990's / early 2000's ?

These goods often offered an extended warranty cashback scheme offered to give you back part of the purchase cost if you didn't make a claim.

Further recovery action has been taken by Douglas MacDonald and The MacDonald Partnership Plc team under an approved tax refund scheme. As a result the Liquidator is now distributing new funds to all eligible cashback claimants who

(a) bought the extended warranty, and

(b) did not claim for a repair under the extended warranty.

Approximately 625,000 customers are now eligible for the new payment.

If you purchased an Extended Warranty Service Contract you should have already received a refund through Powerplan's administrators however many people haven't yet been paid, because they have moved house since their purchase.

A meeting of creditors – which any one of the 625,000 customers affected can attend – was held at The Millennium Hotel, George Square in Glasgow on Friday June 20, 2014 at 1pm.

Alan Campbell, a former director of PowerPlan turned whistleblower, said the meeting will provide an “opportunity for consumers to have their say with respect to the conduct of ScottishPower”.

625,000 people purchased the warranties and are still owed an average claim of £140 under a Scottish Power cash back guarantee. Collectively they are owed £79 million plus interest.

[Amethyst]

Re: Powerplan - Missold Cashback Warranties on White Goods sold through Scottish Powe

Here's some original news stories on the issue (which is still on going 10 years later!)

Store's customers pay price of Power failure

It had all the hallmarks of a really good deal - extended warranties on electrical goods with your money back if you didn't make a claim. Now, as Tony Levene reports, all the promises have been broken with consumers seeing £90m disappear

Saturday 13 March 2004
The Guardian

Three quarters of a million consumers have lost a massive £90m - up to £299 each - in a guarantee plan combined with a cashback offer which has gone bust. But the victims did not fall foul of internet scamsters, or the pedlars of implausible get-rich-quick schemes.

Instead, they entrusted their money to extended warranties, the controversial long-term appliance guarantees on electrical goods bought from stores owned by Scottish Power, a FTSE 100 company now worth £7bn on the stock market.


On top of repairing broken appliances, they also promised to return the full cost of the warranty if no claim was made. Now that has been broken.


Scottish Power covered much of England as well as Scotland. When its 156 stores were later sold to Powerhouse, the chain became the biggest electrical retailer after Dixons and Comet.


And for shoppers who wanted extra re-assurance, the small print offered a comfort blanket - an independent trust fund with Royal Bank of Scotland, one of the world's mightiest banks.


Now PowerHouse is bust. Scottish Power says the warranties are nothing to do with it. And the 750,000 customers form possibly the biggest ever queue of creditors.


The promises of cashbacks ranged up to £299.99, but the money has evaporated in a story that takes in secretive schemes, enormous commissions, tax haven companies, and a trust fund found to be virtually empty.
The saga starts in 1998. Scottish Power, in common with most electrical retailers, knew extended warranties were a fantastic earner.


Often, they cost a substantial proportion of the good's value: at Scottish Power, cover for a microwave worth around £80 cost £59.99 for five years; a £100 "portable TV" £69.99; and a £600 camcorder £299.99. All were the "PowerPlan" brand, which few people would have realised was legally distinct from Scottish Power.


Although stores shroud the exact figures in "commercial confidentiality", the reliability of modern goods meant few customers ever claimed.


According to industry sources, around £75 of each £100 came back to the retailer in profits - and that is before interest on investing the cash. Without these earnings, many retailers would have slumped into the red. Scottish Power was no different. But by early 1998, consumers were beginning to wise-up to the costs of these plans - alerted by exposures in Jobs & Money and Consumers' Association magazine Which? So many retailers - including Comet, Scottish Power, and the then smaller PowerHouse (which also operated former electricity board showrooms) - came up with new wheezes.


They would continue to sell the plans but offer a refund if the appliance did not need repair or replacement over the warranty's life - usually five years. To shoppers, it was heads I win, and tails I win as well.
To claim the cashback, documentation had to be sent in within a 30-day window after the warranty had elapsed. Scottish Power reckoned many would forget or lose the paperwork. In any case, the five years interest should cover repairs, while anyone using the cover would lose cashback rights.


Some cynical shoppers questioned what would happen if the firm holding their money was to disappear. This had already happened to a few schemes. And it was to happen to Texas Homecare - the home improvement chain had a controversial cashback scheme with kitchen furniture.


The standard consumer advice was to look at the quality of the firm behind the promises. But because even big groups could collapse, the essential was an independent trustee who would hold the cash in a ring-fenced fund until all potential liabilities had been met.


Dudley Yorke, from Manchester, bought a £300 dishwasher in late 1998 from a Scottish Power store in Lancashire. He also bought a five-year extended warranty for a further £129.99.


"There was no way I would normally have bothered - the cost was just out of all proportion to the risk. But with the cashback, I thought it was a reasonable deal. I also believed I was dealing with Scottish Power which I saw as a large and very solid company. Its brand name and logo were prominent on the literature," says Professor Yorke, who specialises in educational research.

[Amethyst]

Re: Powerplan - Missold Cashback Warranties on White Goods sold through Scottish Powe

And earlier this year;

MP backing victims in pay-out bid

Date published: 18 April 2014

OLDHAM MP Michael Meacher has vowed to help the 1,400 Oldhamers mis-sold cashback plans on white goods in the 1990s.

Scottish Power’s extended warranty and cashback scheme - known as Power Plan - promised buyers that if they didn’t make a claim they would get their money back in full after five years.
http://www.oldham-chronicle.co.uk/ne...-in-payout-bid

[Amethyst]

Re: Powerplan - Missold Cashback Warranties on White Goods sold through Scottish Powe

and from June 2014

ScottishPower reported to authorities over decade-old £79m warranty scandal

ScottishPower has been accused of “deliberately evading” compensation payments owed to 625,000 customers in one of the UK's largest extended-warranty scandals.The two companies involved in the warranty offer went bust collectively owing more than £79 million to customers affected in an electrical goods extended warranty scandal which ran from 1998 to 2001.
Liquidators who have been chasing money on behalf of customers say they have now uncovered new evidence which had not been available when they agreed to a £6 million settlement in 2004 - a fraction of what was owed in money-back promises.


The five-year PowerPlan warranty in question was a money-back promise offered to ScottishPower customers on the purchase of white goods such as washing machines, fridges and freezers, which promised a full refund of the purchase price if no claim was made against the warranty.

http://www.dailyrecord.co.uk/busines...-claim-3640045

[Amethyst]

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