2020-05-20

Case study: Payments and trust (Monzo)

Credit (and debit) cards are immensely useful, and I am even more appreciative of them after the fiasco with a holiday refund. Amex were great.

But there is always a balance of trust with customer and supplier, and a range of ways to manage that. Cards provide a good means to handle suppliers that fail. Direct Debits also offer some high level of bias towards the customer, which is very important because of how easy it is to collect payments. This ability to claim for a mistake helps ensure Direct Debits are rarely used for fraud.

For the most part, whichever type of payment is used, where supplier and customer are both honest, all goes well. Sadly when one or the other is not so honest, or even something unexpected, like a global pandemic, happens, the way you pay for things matters.

But some times, as a supplier, you want a reliable payment that you know cannot be clawed back or reversed. This is, of course, a huge bias towards the supplier, and away from the customer, but it is also rather "traditional" in that cash payment was always irreversible.

Bank transfers via BACS, or fast payments, provide this - they are like cash, and generally impossible to reverse as the person paying. Obviously the person paid can send money back if they want. They do create an audit trail, you know where the money went (unlike cash), which helps with any possible fraud.

As a business we do a lot with Direct Debits. This puts a lot of control in the hands of the customer who can make a DD guarantee claim at any time, and we would have to reimburse the bank. Thankfully this is rare, but it does allow some opportunity for fraud by a rogue customer using someone else's bank details. This is one reason why suppliers are expected to check the bank details of new DD instructions where they can. That is not so easy.

Thankfully Monzo have opened up an interesting new option for us - a deposit by fast payment!

We have started asking for a deposit, for new accounts, optionally, for some services (VoIP and L2TP). Just £10 paid by bank transfer as part of the order process. We see it instantly, and it provides the bank details for setting up the Direct Debit for on-going payment.

We have even set it up so that we will automatically send the money back in a few days if the order does not go through.

Whilst we face very little fraud, we have found some services, like VoIP, have had issues. Providing the service instantly, even in the middle of the night, means that false/fraudulent details do not show up for a couple of days, or much longer. Until now we have actually blocked some types of out-of-hours VoIP orders because of this, which is not ideal.

Taking payment by card would be an option, but that too is rather biased to the card holder, and does not allow us to validate bank details for Direct Debit. We have had cases of card fraud too.

The deposit is optional, but we are making it so that the order can go ahead instantly if you make a deposit. At the end of the day this is not about the £10, it is that a scammer will not want to send any money. If it is their account, those account details can go to the police if there is fraud. They are creating much more of a paper trail by sending money. Of course if they have compromised someone else's account they can send a deposit, but I am sure they have more interesting things they can send money towards than our services in such cases. I hope so.

This means we have opened up the VoIP ordering at any time of day if you pay a small deposit. Ongoing payments are then by Direct Debit, which give the customer a lot of control if we do anything wrong, but we are able to ensure we have the right bank details that match the deposit. It seems to me to be a good trade off - the trust/risk is biased to us for first £10 and then to customer ongoing by Direct Debit.

We have been running it for a few days, and in spite of it very clearly being optional, so far, every new customer has chosen to pay a deposit - which is really great news. Apart from one test we ran to ensure we do auto-refund, nobody has given up on an order after paying a deposit, either.

It is a very different approach to taking credit cards, which is so common these days, and I think it is working well. And it is all down to Monzo providing the instant feedback for us via a web hook for the incoming payment.

If someone does not want to pay a deposit, that is fine, but it means accounts staff checking the order during office hours, and adds a small delay. So it is a choice people can make if they want, either way.

I am really pleased that Monzo have meant this is now possible. It is a shame the major existing banks did not think it worth while providing this level of control and information to their customers really. Well done Monzo!

P.S. Sales pitch - if you are a business and need this type of integration, we know people that can help you (some A&A customers we work with).

2020-05-16

Holiday refund

Like many, in those heady care-free days of 2019, I booked a holiday, and now it is not happening.

If you are stuck without a refund for your cancelled holiday, do keep reading for some of the options I explain below.

The amount does not really matter - for anyone booking a major holiday, whether a few hundred pounds, thousands, or tens of thousands, it will be a lot to them. That is how we all work. There is a BBC article about a school holiday firm not refunding people - it seems to be happening a lot. In my case, having had debt in my life in the past, I try to make a rule of not spending money I don't have. Sadly, this holiday was for my family (those that can sensibly go on a cruise) and co-ordinating a cruise they all were happy to go on, with dates they could all go, for 7 people, was not easy. So when I managed it I snapped it up, extending my mortgage to pay for it. If I had any inkling about 2020 I would not have done that, obviously. So, in short, like everyone else stuck with an intransigent holiday firm right now, this is a lot of money to me.

When the "lockdown" started we had no idea how long it would last. The cruise was planned for June, and my grandson is so looking forward to it - I even made him a countdown clock he has by his bed with days, hours, minutes, seconds to the cruise on it. We sort of hoped it would still be on, but understandably we were concerned at going on a cruise due to the close quarters of so many people.

NCL had cancelled some cruise, but not ours. Then they launched a Peace of Mind scheme. This allows you to cancel up to 48 hours before sailing for a credit of what you paid against a future cruise by 2022. This is great deal compared to their normal cancellation policy/terms. I can see a lot of people going for this, especially with the perceived dangers of being on a cruise.

But this was, itself, a bit cunning. It means that lots of people leave their money with NCL, voluntarily, rather than getting a refund. Well played NCL.

I did consider it, but sadly it makes no sense for me. The effort of organising 7 people and a date and the right cabin was hard enough - I have been trying for years. The chance of that cabin coming up at all is slim, and it being on a suitable date to a suitable destination is pretty much zero. The time limit means that even if I found other suitable cruises, we would end up wasting some of the money. So no, I decided to wait. That said, I was getting concerned in case NCL waited until the last minute to cancel.

Finally, on 24th April, they cancelled the cruise. This was, in many ways a relief. Given the financial uncertainty facing us all, I would rather put the money back on my mortgage than spend it on a cruise. Also, I was uncertain a cruise was a good idea at all at the moment. So, yes, phew, I could get my refund.

However, the wording of the NCL notice cancelling the cruise was odd. It said they would give me a "refund" by way of a cruise credit and 25% bonus, and that if I wanted the "lesser refund" of just what I paid, I could fill in a form (not yet available) and wait 90 days. Well, no, the terms are crystal clear and have no ambiguity at all - they have to refund me within 14 days, simple as that. Obviously I could choose to agree alternatives, but if not, it is refund. In light of the wording I contacted them, on Twitter, and Facebook (and once I found the email address) by email.

I got a ticket reply saying they would answer in 48 hours. But nothing, not for 5 days, and then only confirming their idea of a cruise credit or refund in 90 days.

A few days later my NCL account page showed a cruise credit, but even with a 25% bonus it was around half of what I had paid, and expired next March. That is not a good deal!

This got silly with various exchanges, with them continuing to refuse to acknowledge their own contract terms.


Then they posted that "Terms and conditions are subject to change". I was fuming! Nothing in their contract allows them to change terms like this.

Obviously a change to the contract like this would not normally be legal. Even if their terms allowed such changes that would probably fall foul of consumer protection legislation. The Competition and Markets Authority are also looking in to this. This makes it clear that refunds should always be a clear option and paid in a timely manor.

They backed down a bit, saying the terms at the time I booked do apply, but still refusing to acknowledge that they have to refund me in 14 days. They really went in to "head in sand mode"...

Am I being reasonable? Are they?

One thing to get out of the way is the question of whether I am being unreasonable. After all, these are somewhat unprecedented times.

If you have ever been on a cruise (not just NCL) you will know how petty they can be - even an "all inclusive" cruise, sold using those exact words, will find you able to drink as much whisky or wine as you like, but paying $5 for a bottle of water or a coffee. It is unbelievable, and takes a lot of getting used to.

All I am asking is the they do what they agreed, nothing more, and this is what they agreed in the case of "circumstances beyond our control" such as "epidemic". This was not something they did not foresee in their contract. Given how petty they are I feel entirely justified is simply asking that they do what they agreed, nothing more, nothing special. And I fully endorse that they are offering a range of alternatives for those that want them, including bonus credits and discount holidays. Well done.

But one has to think of the bigger picture. If everyone expected them to do what they agreed (something we used to call "normal" for contracts), they would go bust, wouldn't they? Well maybe, but they are offering attractive alternatives, and if many take those, they have it covered, one would hope.

One argument is that holiday companies are having to wait for refunds from their suppliers, and hence unreasonable to expect them to pay up as per their terms. This is not a good argument, as it basically means a short term cash flow issue for a business, which is exactly what a loan is for. The government are even backing business loans for just this sort of reason. It is not fair to expect consumers to lend money, interest free, without any choice in the matter. In my case it is literally costing me interest!

So, basically: if they had asked to borrow my money; if there was clear protection in case they go bust; and if they were paying competitive interest on the loan; then maybe I would consider it reasonable. Otherwise, no, sorry, even in these circumstances (especially in these circumstances) I do not think they are being reasonable.

What are my options

There are some options, and this is perhaps where this blog post will be helpful to others in the same situation.

Waiting / taking up their offer

One option is to accept what they say, agree new terms waiting 90 days for a refund, or accepting the cruise credit. As I say, a cruise credit is unlikely to be something I could use in the time limit, but my main concern is whether they go bust, and if they do, it is unlikely I will ever see my money from them. So no thanks.

Dispute/chargeback

This is a useful one if you pay by card, as the card schemes all have a dispute/chargeback process. Basically it allows you to dispute a charge and if agreed, to get the money back.

The only issue is that it can take a couple of months, it seems. I also get the feeling it is reliant on the card company getting the money back, so if the company goes bust before the dispute is resolved, it may not work.

When I got the message about terms changing, even though several days to go before the 14 days were up, I took that as them saying they would not honour the contract, so I put in a dispute on Amex - why not?

Holiday Insurance

Holiday insurance may be an option. It has possible issues, and this is one for the lawyers to comment on I am sure. I bet every insurance company has a team of people making sure they know exactly where they stand.

One possible issue I have heard, and cannot be sure of, is what happens if I pay for someone else to go on holiday. Does my insurance cover that, after all, if they don't get the holiday I have not lost out. Does their insurance? After all, they have not lost money. In my case this was a holiday for 7 people - would I only get my share back from my holiday insurance?

I also don't know what happens if you accept a cruise credit instead - you have not lost out then, so does insurance cover it. If they later go bust, it is the credit, not a holiday that you have lost. I have no idea if that is covered.

I also hear that some insurers no longer cover COVID-19 issues for holidays booked after a certain date (mine was well before).

It remained an option for me if all else fails. 

Consumer credit act

This is a biggie - if you pay by credit card you have extra protection, as the card company end up jointly liable with the supplier for providing the goods and services. Liable for the whole lot even if you only pay part (e.g. a deposit) on a credit card. And this liability is on the card company even if the supplier goes bust. So long term this is a massive consumer protection for you.

Obviously it could take time, which is no help if you need the money now, and sadly it does have an upper limit, which won't be an issue for most people.

What I don't know if whether accepting a cruise credit would remove this option - one for the lawyers to comment on.

County court

This is always an option when someone breaks a contract, and the Money Claim Online web site makes it quite easy. It costs a bit, but that is added to the claim.
  • In a perfect case, you issue a claim and the defendant coughs up. This happens a lot when the defendant is simply in the wrong, and they know it, like NCL do.
  • In a slightly less perfect case you issue a claim and they ignore it. Two weeks later you get judgement by default (one click on the web site) which takes a day or so. At that point you can pay for bailiffs to go round and collect money or goods. NCL have a Southampton office, or maybe the bailiffs could find an NCL ship in a UK port :-)
  • Sadly if they do put in a defence, no matter how daft, it goes to a hearing, which takes time. It probably takes a lot more time in "lockdown" as well.
Given my options, and the time the Amex dispute could take, this was a real consideration. I even sent a formal "notice before action" after I had waited 7 days to allow me this option (you have to do that before you take someone to court giving them time to pay up instead).

Statutory demand

One option I had forgotten, and was suggested on twitter, was a Statutory demand.

The principle is simple, any company that cannot pay its debts as they become due has to be wound up. If you are owed more than £750 you can serve a Statutory Demand for the money. They get a few weeks to pay, and if not, then you have to go to court and get a winding up order, forcing the company in to liquidation.

This is tricky, if they don't pay you wind them up (which costs money) and may not see any money. The idea is that no company ignores a Statutory Demand, and would rather pay what, for them, is a relatively small sum than be forced in to liquidation.

One issue is that NCL (Bahamas) Ltd is a UK establishment of a foreign company. Given a UK office, I may be wrong, but I am reasonably sure I could take them to court and even send bailiffs - I have no idea if it is possible to actually wind up such a thing.

So I decided to basically rule this out, especially as I have never done one before.

What happened

Amex are stars! What can I say!

I put in the dispute on the web site - it is simple - find the transaction, answer a couple of questions and put in a one line description. I did that.

The next day, I got around to making up a PDF with screen shots of the terms, and discussions to prove I had tried to resolve it and that the cruise was cancelled, etc. This is to upload on to the dispute.

But I could not find the dispute, it was not there. I checked "closed" disputes, and there it was. I was about to get cross at them rejecting my dispute, but clicked on it to see :-


Wow, just wow, this was in under 24 hours. I had not even loaded my "evidence" yet. What can I say. A couple of days later it shows on my Amex app. A quick message to Amex, and the credit is being sent to my bank.

I really have to thank Amex for making that such a quick and easy option. I am really impressed with their customer service. This was causing a lot of stress for me, and is such a weight off my mind now.

Two weeks later, NCL still show the cruise credits and no indication of the chargeback, they even called me trying to get me to book more cruises with my cruise credits, and they really did not understand the whole concept of being in breach of contract. Crazy. It may be some time before we remotely consider a cruise, let alone with NCL.

2020-05-06

Cycle lane logic?

There are number of separated cycle path / footpaths on the estate where I live, and I use these a lot, both walking and cycling. As a cyclist I always notice the people walking on the wrong side :-)

However, I wondered if there was any logic to the way the sides are chosen. So I decided, on my walk this morning, to take a few pictures and see if there was indeed any logic to it.

I am not sure there is.

The first one is off the main road outside the estate, so at that end there is no preference for which side would be better as a cycle lane. However, at the other end (2nd image) one side goes on to the footpath and the other on to the road. It makes sense that the side that goes on to the footpath is the footpath, and so it is, very logical.


The next one is not so obvious. On one end, one side goes on to the footpath straight on, and the other at right angles. However, on the other end (2nd picture) one side has no footpath, so makes sense to be the cycle lane, as shown. Not that daft.


The next one is much more obvious. As you see on the approach (1st picture) the foot path continues in to the cycle path and serves several houses, so pretty much has to be the footpath side. The other end is just on to the road, so no preference. Good choice.


This final one does annoy me when cycling. At one end (1st picture) it is just on to the road, but at the other end (2nd picture) the left side has no path, it goes on to the road, yet they have chosen to make the cycle path the other side, with a give way. OK, they would have had to put the pole the other side, but that is the sign saying which side is which.


So maybe there is no logic at all and it is just random, who knows.

2020-05-02

JSON all the things

I have a feeling that industry is moving away from XML and towards JSON...

Just a feeling, but even HMRC, who used to used XML for VAT and do for RTI, have moved to JSON for MTD (VAT).

Fundamentally XML is too complicated - especially with name spaces. The options in XSD (which is the common way to define what is valid in an XML file) is also a bit of a mess - defining the order of the XML objects even, which is a pain if you ever work with any XML. JSON does not expect values in an object to be in any order (just in an array).

JSON is simpler in many ways, but there are differences. The type of a simple value can be more than just text (as you have in XML), it can be null, boolean, number, or text. Javascript tents to just convert between things seamlessly in most cases. It does get to be fun in arrays where each value can be a different type, even an object or array itself.

JSON also makes it a lot easier to create and process using languages like Javascript, obviously.

As it happens, at A&A, we have been working on new APIs for our control systems (more on that another day), and these are all JSON based too. But this week I have started on some work on the accounts system.

I now have JSON for documents, i.e. invoices. We currently allow customers to access invoices in XML, PDF, Plain text, and HTML, and as of now also JSON. You can ask for a JSON attachment to be automatically included in your invoice emails if you wish - digitally signed, obviously.

Whilst we have loads of work behind the scenes improving the way the accounts work, this JSON interface should be pretty stable now.