I whinge here from time to time about the cost of my oil heating. along with all the other utilities, I always pay in full every bill, rather than a monthly plan. The reason is that they all seem to me to take more than they need, then you build up credit, they get the interest, and it all seems complex to me. I prefer just paying for what I've used.
Now - my oil supplier has just sent me a mailshot. They have a new monthly scheme. If I take it up they put £15 in the account to start, then pay me 4% interest on it as I pay in. Then when the bill is due they take the money from there. I can't get 4% anywhere else so easily that's for sure.
The oil price is the same, so what's the catch for me? Other than being locked into using them (perhaps that's it) I can't see what they get from it or why I wouldn't do it? They do say interest rate may vary...
Last edited by: Crankcase on Mon 18 Jul 11 at 13:00
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i'd bite their hand off - but the old maxim "If it sounds to good to be true" the issue I'd have if they went bust and had all my cash I wouldn't be a happy bunny. I know it's illegal to charge interest on a loan unless you're FSA'd dunno if it's the same the other way around.
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Ooh, good point - if they went under that could be a few hundred quid. Hadn't thought of that!
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Sounds OK if you want to buy from them anyway, however should they go to the wall what happens to the money you've paid in? If you paid an equivalent amount in to your normal usage, then that would seem less risky and might be a tempting type of regular customer discount.
Small print...is there a third party involved, could your payments be going to company X whilst your oil comes from company Y, either company goes bust do you still owe for the oil anyway?
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>> I can't get 4% anywhere else so
>> easily that's for sure.
Yeah, exactly so how can they pay such a rate. Sounds like you are financing the company.
And if your annual bill is 1500 quid, the £15 cash bonus is another 1% So thats 5%!
I dont see how they can make money on this, and stay in business. Unless they are copping the money elsewhere, like the cost of fuel. And on that basis I would be very wary.
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Yes...there's something not right here. That interest rate is impossible unless they've just won 161 million. Sleep on this one I will.
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FD to MD : We're short of cash to pay the bills.
MD: Oh carp
FD: never mind, I've got this wheeze to get our customers to pay us in advance .. and when we run out of cash, they'll be unsecured creditors so get nothing.
MD: great.
Last edited by: madf on Mon 18 Jul 11 at 13:21
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>> FD to MD : We're short of cash to pay the bills.
>> MD: Oh carp
>> FD: never mind, I've got this wheeze to get our customers to pay us in
>> advance .. and when we run out of cash, they'll be unsecured creditors so get
>> nothing.
>> MD: great.
>>
I DIDN'T say a word!!!!!!!!!!!
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OP>> >> I can't get 4% anywhere else so
>> >> easily that's for sure.
RF>> Yeah, exactly so how can they pay such a rate.
Easy. Their own bank will be charging them an overdraft rate of between 8 and 20%. Paying Crankcase a mere 5% is dirt cheap for them. Plus it locks him into buying from them which is good for them.
Moreover, no defaulting customers on invoices/delayed payments.
On the other hand they may have desperate cash flow situation and be on the verge of insolvency.
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>>They do say interest rate may vary...
>>
Do they plan to inform you when it drops? Sounds like the bank trick of dropping ISA rates without informing you, (except in the very small print).
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Unless they're FSA registered I think what they might be doing is unlawful. Steer clear.
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Just found their website. Plan mentioned here, and there's no more info in the leaflet than this:
www.watsonheatingoil.co.uk/Payment-scheme.aspx
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Crankcase,
Other posts you have made indicate someone who is adverse to risk, so this plan is not for you, whatever its merits.
I don't know why you are bothering to look at it, it's rather like me reading a Labour manifesto when I know I'm never going to vote for them.
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Listen, sunshine, I've just gone all in with one point three million on a J 7 non suited. How risky do you want? :)
You're reasonably right - I am quite risk averse but that's more due to lack of capital than anything else. Just wait till that blinking mortgage is cleared. Why, I'll be buying two or more pots of jam at the same time and won't even have finished the old one! How do you like them apples?
Oh. I've won the hand.
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If a preferred supplier of mine introduced improved payment terms, I would take advantage.
Exposure of a few hundred wouldn't worry me in those circumstances, but exposure of any more would.
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I don't know much about this industry, but I know there are a few sharks operating in this industry, so I would only go for it is the company is well established.
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Dont like the look of this in the Ts & Cs
In connection with the use of the Website and any orders placed by you, Watson Petroleum will not be liable for:
16.1. losses that were not foreseeable to both Watson Petroleum and you when the
contract was made; and/or
16.2. losses that were not caused by any breach on Watson Petroleum's part; and/or
16.3. indirect and/or consequential losses, losses of profit, losses of opportunity,
business losses; and/or
16.4. losses to non-consumers; and/or
16.5. losses arising out of Watson Petroleum's negligence;
but nothing in these Terms and Conditions or the Website limits (or purports to limit) Watson Petroleum's liability for death or personal injury resulting from negligence.
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Got Watson's as 'neighbours'. Will try and fish this weekend, but can't promise.
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UPDATE: Memory returned!!
Recent recall some months ago. I buy oil from a small local supplier. By small I mean not a widely known firm and one which I guess is more a family based outfit. I call, they deliver, I drop the cheque in when I'm passing, I kid you not. Get the picture? The last time I went to the oil market I called them last and they were some 1.5 (ish) pence higher than Watson's. I told the proprietor this and he said, "can't go there", 'they' are buying business. I stuck with the usual and remembered those words.
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Payment plan - too good to be true? - R.P.
