Utility Companies and Penalty Charges
From the start of May 2007, British Telecom (BT) charges an extra £4.50 per quarter if you don’t pay by direct debit. Trading Standards has criticised BT, calling the charge ‘outrageous’ and ‘unjustified’.
But it’s not just BT. Virgin Media charges its customers £5 per month for not paying by direct debit, and your mobile phone company could be charging you an extra £3.50 a month for not paying the way they want you to.
We don’t think this is fair. The reason is that the charges are unlikely to bear any relation to the cost the company incurs in actually charging people for not paying by direct debit.
What can you do about it?
The good news is that some of the biggest companies have backed down from using similar charges when enough people have objected. Utility giant British Gas recently announced plans to sting its customers with a £5 late payment charge – but had to drop it when customers complained. So you CAN make your voice heard.
A recent BBC Watchdog report had this to say:
“BT told us that at the same time as introducing the charge, it’s reducing line rental for all non direct debit customers. As such, some customers would be paying 50p a month more than they are now, and some would be paying 50p less. It admitted that non direct debit customers would still be paying more than direct debit customers. BT believes it’s unfair that people who pay by a low-cost approach such as direct debit should subsidise those who want to pay by more expensive methods.
The Trading Standards Institute offered a statement regarding this story. It said:
‘Trading Standards officers have received a number of complaints regarding the extra charge levied by some companies on consumers who pay other than by direct debit…………
………. ‘The Trading Standards Institute (TSI) is somewhat concerned that these additional charges may disadvantage sections of the community who may not have bank accounts or prefer to pay by other methods to keep a tight rein on their finances.
‘TSI would suggest to consumers that they look very carefully at all the charges imposed by the companies they deal with, and that if additional charges are imposed which they don’t agree with they move to another provider. If a company doesn’t show clearly all the charges that apply to alternative methods of payments, it may be committing offences under the Consumer Protection Act 1987. Consumers should therefore contact either their local Trading Standards or Consumer Direct on 08454 040 506.’”
Use our letter
If you feel that you would like to make a complaint about any company which is charging you unfairly to make their own life easier, try using our suggested complaint letter. Feel free to add your own comments where appropriate.