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mark occomore · Joined: 07 Dec 2006 Posts: 9955 Location: UK

British Telecom has been criticised by Trading Standards for charging customers £4.50 extra each quarter if they do not pay by direct debit.

Trading Standards called the charge affecting about five million customers "outrageous" and "unjustified".

But the telecoms giant said it cost more to process non-direct debit payments and that those customers were also more likely to forget to pay.

BT also said it would soften the blow to customers by giving more discounts.

The BBC's Sumant Bhatia said other companies, including Virgin Media, the Post Office and Telecom Plus, also charged more to those who do not pay by direct debit.

Last month BT revealed the number of people signing up to its home phone services grew for the first time in four years during the last three months of 2006.

In the final quarter of 2006, 37,000 more users signed up for the phone service after BT cut prices in August.

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They say it's added to encourage people incase they forget to pay there bills on time. Virgin Media charge customers £5. Still why should the consumer be penalized for this?

Cherskiy · Posted: Sat Mar 10, 2007 10:18 pm Post subject:

It's down to cost and therefore profit - direct debits are cheaper to administer and the company knows they'll get paid regularly without having to chase late-paying customers. A win-win situation for them, for which they're happy to 'subsidise' (i.e. charge what would be the normal amount but don't tell anyone) those on direct debits, whilst surcharging those who can't or won't play ball.
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Ella Sailyour · Joined: 11 Dec 2006 Posts: 579 Location: Marbella, Spain

gfloyd · Posted: Sun Mar 11, 2007 5:34 pm Post subject:

Direct debit is the only economic way to collect money from a large number of customers on a regular basis. It doesnt necessarily reduce the credit risk, as customers may have no money in the bank either, but it does reduce the manual work involved in collecting cash. We should be moving much quicker to a cashless society than we are. Partly this is due to the difficulties of opening a bank account if you are not financially attractive to the High Street banks.
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mark occomore · Joined: 07 Dec 2006 Posts: 9955 Location: UK

woodysdad · Joined: 07 Dec 2006 Posts: 67 Location: Nr Edinburgh

I pay Virgin by Debit Card. They bill me by E-bill...where's the cost?
The only time I haven't paid on time was in January when the takeover was going on. They charged me ££10 for being late, but when \i informed them I hadn't received an e-bill...this was cancelled!
Twisted Evil

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