Out in the cold when the heating packs up

If you ran an insurance business but didn't have to pay the claims made by a big proportion of your customers, you'd be pretty happy with life. In December British Gas was accused in court by one of its customers of doing exactly that - taking annual payments to cover a boiler in the knowledge it would not have to repair it if it ever broke down.

Stan Whatling, an 87-year-old war veteran from Rainham, Kent, assisted by his son Simon, successfully argued at Maidstone county court that BG had failed to tell him his boiler could not have been repaired. BG was forced to return his last payment plus costs. His story makes worrying reading for millions of other households with similar policies.

The product


BG offers its customers a range of HomeCare services - the most popular of which is its gas boiler cover. For an annual payment (currently £186) a BG engineer will inspect the gas boiler annually, and fix it if it breaks down. The company advertises that it is happy to take boilers of any age as long as it has the parts to be able to fix it. But its terms state BG will not be required to repair a boiler if the parts are no longer available.

Such policies are controversial because most people may be better off putting the money in the bank each year and contracting a gas fitter as required. They are also very profitable. In 2003, BG Residential made £84m from HomeCare services, or 40% of the division's profits.

The case


In 1988 Mr Whatling took out a service contract two years after he had a new Glow-Worm Fuel Saver boiler installed. Each year for 15 years he renewed the service plan, with his last payment at £164. When the boiler finally stopped working in December 2003, he called out a BG engineer, and assumed it would be resolved quickly.

In spite of the fact that it was the middle of winter and he and his wife suffer from angina and arthritis, it took the engineer two days to arrive. When he did arrive, he took one look at the boiler and said he would not be able to fix it as "we haven't been able to get the parts for these for two years." The engineer's parting shot was that a salesman would call and quote for a new boiler.

Not surprisingly, Mr Whatling wrote to BG to ask why it had continued to charge him £150 a year to cover a boiler it knew it could not repair. The letter was ignored, but the company did send a quote of £2,500 to fit a new boiler, and said it would offer a £150 discount. At this stage his son Simon got involved. After several calls to BG, it wrote to Mr Whatling and said it was under no obligation to tell its customers when parts became unavailable - it also refused to refund the premium.

At that stage Mr Whatling was quoted £1,580 to fit the exact same boiler by an independent supplier - £1,000 less than BG. Then his son found on the internet that the parts for his original boiler were available for just £15.

"What really upset my father was the fact that the company had continued to take the money, knowing that in 1998 the boiler's manufacturer stopped making the parts. It had even put the boiler on its reduced parts list, but not informed him," Simon says.

The pair decided to take the company to the small claims court. Simon lodged proceedings at Maidstone County Court arguing that BG should repay the premiums for the previous six years. He also amended the claim to argue that BG has failed to fix the old boiler and that it had made no attempt to find the parts that were available from its own preferred suppliers.

"British Gas made us an offer to halt the proceedings, the details of which I am not allowed to reveal. We declined, as had we accepted the offer, we would have had to sign a confidentiality agreement, which we didn't want to do."

The judgment


Deputy District Judge Hooper, who heard the case and sent out his findings in January, mostly found in the Whatling's favour, but only awarded them £260. That represented the last year's contract premium plus some expenses.

He declined to award earlier premiums as, he said, Mr Whatling had benefited from the annual safety inspection. He also failed to award compensation for BG's failure to mend the original boiler, although this point has been appealed and will be heard in March.

The case rested on whether BG had informed Mr Whatling that it could no longer get the parts for his boiler. Since 2002, BG engineers carrying out the annual safety inspection have been required to fill out a form and establish that parts are still available - although the court heard this had not happened in Mr Whatling's case.

The reaction


Simon Whatling said that he has come to the conclusion that such policies are a waste of money.

"When I looked at his bills I found that my father was also paying BG £162 a year to insure his kitchen appliances, including £30 a year to cover a microwave oven that can't have cost more than £70 to buy new.

"They sell these plans on the basis of offering peace of mind but to my way of thinking it is an unfair contract. BG says it writes to customers to tell them when the situation changes. However, last week I found out my sister has the same BG contract. She has an older boiler than my father had, and BG has not yet told her they cannot get the parts. She is being charged the full premium in exactly the same way as my father was."

In a statement BG insisted Mr Whatling's experience was a single, isolated incident.

"We have an automatic process called the central heating advice programme which sends letters to our customers who have boilers that are on a restricted parts list. Our engineers have to complete a checklist which is left with the customer at the time of the safety & maintenance inspection answering the question 'are all essential functional parts available'.

"British Gas has cared for Mr Whatling's boiler for a number of years, and we did write to him to tell him that the boiler was on a restricted parts list. In this case the judge found no negligence by British Gas in the work carried out. He was also satisfied with our procedure for locating obsolete parts."

Meanwhile Simon advises anyone with this contract to get out the form they were given by the technician at the last safety check and make sure it's been filled in.

"If it hasn't, get on to BG and ask why not," he says.

Looking for parts

British Gas and other boiler insurers all decline to fix boilers if the parts become unavailable. However, the moral of Mr Whatling's tale is don't automatically assume that the parts really aren't available.

Boiler manufacturers are required by law to supply parts for 10 years after they cease to make the boiler in question, but long after that date many parts can be found gathering dust on the shelves of independent suppliers.

A spokeswoman for Corgi, the body which regulates gas installers, says a consumer's first port of call should be the boiler's manufacturer.

"They will be able to tell you whether parts are still available - we don't keep a definitive list of boilers for which parts are no longer available but anyone can ring our technical helpline and talk to a member of staff, who will have a wealth of experience."

It that draws a blank, lots of parts firms have websites that allow consumers to input their boiler's make and number. They list which parts they hold in stock and some allow the consumer to search for a particular part number. Those without internet access can telephone.

One of the biggest parts suppliers for boilers is a company called Parts Center. It holds more than 40,000 parts, many of which come from boilers for which parts are no longer made. It is a major supplier to BG.

Another firm, Curzon Components, which is owned by the boiler manufacturer Baxi Potterton, has 18 outlets around the country and holds more than 25,000 parts from 80 manufacturers.

It has a search facility and will send out parts for overnight delivery. Heat Spares Direct and MJT Controls both offer similar services and have been praised for being helpful.

Any independent Corgi-registered installer should be able to identify the failing part's number, and may even be able to source it themselves.

· Curzon Components- 0870 510 3030.curzoncare.co.uk Parts Center - 01282 834400 - partscenter.co.uk Heat Spares Direct 01704 546474 - heatsparesdirect.co.uk MJT Controls 0117 9637142 - mjtcontrols.co.uk Corgi helpline 0870 401 2300.