BT DD "processing" charge flawed in principle

[Shoestring]

Concerning the BT DD penalty charge (this would apply equally to other sectors too), I am of the opinion that the argument about this charge being an unfair charge in terms of the unfair charges element held by UK law - in that it is above the true cost of processing the payment - is to a large extent errant.

 

It is obvious that running a business includes inherent expenses/overheads and one of those that are central to running a business must be the processing of revenue/income (lets call it what it is and not what “they” want us to regard it as – it is “revenue” and not “cost”). This revenue will appear on the income side of the balance sheet whereas the overheads will appear on the expenditure side.

 

It seems to me that what the big corporations are trying to foist on to us is the unreasonable principle that all overheads should be borne by the customer and all income should be free of all liens, expenses etc. It is a quite preposterous idea. Which is why it has never before arisen in thousands of years of commerce.

 

 

The audacity of the concept is breathtaking in its scope and should, in my view, be hard fought as a principle as otherwise we will be agreeing by default to accept a lesser “cost” of processing our payment as reasonable, when it is not at all reasonable.

 

There is also another angle that I raised with the OFT, Ofcom and Consumer Direct (but on which they have all passed without significant utterance). This was the argument that if I were to pay my BT bill in legal tender – that is banknotes and coin (specie) issued by the Bank of England, then I will have discharged my debt in full (since the BT account is rendered in arrears it must be regarded as a debt). The technicalities of “processing” my payment is not my problem in the slightest. I have paid my debt and paid it in full, according to the law (as I understand it).

 

Any thoughts on the foregoing are most welcome.

 

Shoestring.

 

 

(my apologies for incorrectly posting this previously elsewhere - the welcome page. I hope duplication is pardonable...)

[buzby]

I'm with you - however my emails to the DTI have proved fruitless as they feel a firm SHOULD be able to recover any additional costs from the consumer UNLESS he's buying petrol with a credit or debit card, so that's all right then.

 

Until we follow Ireland's example, by outlawing through Act of Parliament, there is nothing we can do except fight them at every turn.

[Shoestring]

Hi Buzby. The problem with theDTI is that they represent the interests of business and industry and do not, repeat, do not represent the interests of the general public/citizen/consumer. The same is true of the government in general in fact.

 

The Bank of England avoids at all costs any form of real regulation with teeth as they fear, or at least argue (they are bankers themselves never forget) that imposing tight regulation will drive the banks to another business domicile.

 

My own experience tells me that banks use this argument to bully the government (who across the parties are hardly brave at the best of times) the taxman and other government entities (in fact, I have actually seen this sort of ploy put into effect by a major British bank to influence outcome of tax legislation/interpretation to their advantage).

 

This laxity has other problems that have much more impact. A few years ago, the UK ranked number 8 in the world for money laundering. A significant portion of the amount involved would have been the laundering of drug money, in addition to other softer types of laundering (tax evasion etc).

 

So, I hold out little hope of the DTI, let alone Oftel (whose role is to provide the illusion of regulation, I believe), ditto OFT and others. I would argue that there is no body out there other than non-profit groups such as this, who would ever consider trying to champion the ordinary man in the street, who is to be bled at every turn simply because the individual can do little to defend themselves.

 

Think about it. What BT and the others are doing is no different than a shop charging you ten percent extra just to open the till and take your money when you purchase a pair of shoes.

 

Fighting for this principle is important because if left unopposed this test wedge will be extended further in time. Imagine, for example, BT and others charging the consumer an extra (say) 3% to cover the annual cost of providing their staff with toilet facilities? This may sound daft, I appreciate, but the principle is more or less the same. Likewise, consumers challenging incorrect billing costs (which BT send out quite regularly I understand) could be charged a fee for responding to an enquiry.

 

Nor am I very sanguine about the ability (or willingness) of Parliament, as it is currently configured, to champion the individual over the corporation. To many of the elect are there simply to collect their pay cheque and toe the party line in the hope of receiving promotion, whilst others who no longer have the opportunity of a gaining a government stipend have their hands cupped ready to receive the bounty of corporate munificence.

 

However, there is no alternative but to press what corns can be pressed and hope that this will be sufficient to resurrect decent and ethical business practise back from the grave.

 

Shoestring

[buzby]

Like you I have no allusions as to the impartial nature of these Government departments, however my campaign continues, as I'm seeking the text of the Irish legislation to generate a Phase 2 follow-up. I'd just rather be playing with the kids, than writing letters to folk who don't care. Still, with the Scottish elections due next month, and the General Election next year, hopefully things will change.

[patdavies]

This was the argument that if I were to pay my BT bill in legal tender – that is banknotes and coin (specie) issued by the Bank of England, then I will have discharged my debt in full (since the BT account is rendered in arrears it must be regarded as a debt). The technicalities of “processing” my payment is not my problem in the slightest. I have paid my debt and paid it in full, according to the law (as I understand it).

 

Any thoughts on the foregoing are most welcome.

 

You are buying into an urban myth that you can force any transaction to be in legal tender - you cannot.

 

Legal tender has a very narrowly defined meaning that relates to paying a debt to a Court.

 

Outside of this debt, any commercial transaction takes place with payment by any agreed means. You cannot force BT to accept cash (legal tender) as it is not a means to which they will agree.

 

Look at it from another point of view - all Bank of England notes are legal tender; many, many places will not accept £50 notes and they are acting lawfully.

[Shoestring]

Thanks for your post patdavies.

 

I fear you are incorrect. In regard to the subject being an "urban myth", I really don't know if it is but if if it is it is one I have not come across before. But it certainly is not a "myth". I looked at the Old Lady's website and a few other pages that lend credence to what I said.

 

However, I am always open to being corrected. Therefore, can you provide a reference or link where your viewpoint is cited? I should like to read the minutiae and see if it conforms to my understanding and what I have thus far researched.

 

For my sins, I refer you to the Wikipedia page (Legal tender - Wikipedia, the free encyclopedia) which opens with this sentence:

 

Quote:

 

Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt denominated in the same currency.

 

Unquote

 

It continues:

 

Quote:

 

In some jurisdictions legal tender can be refused as payment if no debt exists prior to the time of payment (for example, where the obligation to pay arises substantially contemporaneously with the offer of payment). Consequently vending machines and transport staff do not have to accept the largest denomination of banknote for a single bus fare or bar of chocolate, and even shopkeepers can reject large banknotes — this is covered by the legal concept known as invitation to treat. However, restaurants that do not collect money until after a meal is served would have to accept that legal tender for payment of the debt incurred in purchasing the meal.

The right, in many jurisdictions, of a trader to refuse to do business with any person means a purchaser cannot demand to make a purchase, and so declaring a legal tender other than for debts would not be effective.

 

Unquote

 

Also, the £50.00 note is, I believe, one that is heavily forged and so refusing it is is at least understandable from that point of view (a case of Gresham's law in action) -- as is the refusal to accept it for a small cost outlay thus requiring the return of large amounts of smaller notes and coins. Even banks pass out forged notes in their cash points and this is certainly illegal - albeit largely unintentional (but one imagines not entirely so?).

 

The focus I was aiming at is the payment of a debt. a BT bill is a debt and BT cannot refuse to accept payment of legal tender to discharge said debt. And full payment in legal tender, I believe, does discharge that debt. The penalty fee cannot be applied and the cost of processing payment in legal tender is not my problem.

 

Thus the following statement from Wikipedia:

 

Quote:

 

Bank of England notes are the only banknotes that are legal tender in England and Wales. United Kingdom coinage is legal tender, but not in unlimited amounts for coins below £1.

 

Unquote

 

Credit cards, debit cards and by extention bank transfers - direct debits for example - are not legal tender, which is where (I believe) BT and others are forcing out the hitherto tight edges of a loophole.

 

I am of the opinion that the longer term objective is to phase out all forms of cash money and use only electronic money. Since this is not legal tender it therefore is open to all sorts of legal abuse, quite apart from the fact that it demolishes, in one foul stroke, the sole right of government to issue legal tender and replaces this most significant right with corporate money and corporate diktat.

 

Please feel free to correct me where it can be proven I am wrong.

 

Shoestring

[buzby]

Of greater interest is what wold happen if BT took someone to court for non-payment of their services. If the customer advised a judge that they attempted to pay by cheque or Postal Order and these were returned to the issuer, then it would be difficult for them to obtain judgement in their favour, as I believe a judge (or Sheriff) would tell them to go away not not be so stupid....

[patdavies]

Thanks for your post patdavies.

 

I fear you are incorrect. In regard to the subject being an "urban myth", I really don't know if it is but if if it is it is one I have not come across before. But it certainly is not a "myth". I looked at the Old Lady's website and a few other pages that lend credence to what I said.

 

However, I am always open to being corrected. Therefore, can you provide a reference or link where your viewpoint is cited? I should like to read the minutiae and see if it conforms to my understanding and what I have thus far researched.

 

For my sins, I refer you to the Wikipedia page (Legal tender - Wikipedia, the free encyclopedia) which opens with this sentence:

 

Quote:

 

Legal tender or forced tender is payment that, by law, cannot be refused in settlement of a debt denominated in the same currency.

 

 

From the Royal Mint

 

 

Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender. It does not mean that any ordinary transaction has to take place in legal tender or only within the amount denominated by the legislation. Both parties to a transaction are free to agree to accept any form of payment whether legal tender or otherwise according to their wishes. In order to comply with the very strict rules governing an actual legal tender transaction it is necessary, for example, to offer the exact amount due because no change can be demanded.

 

Coins are legal tender throughout the United Kingdom for the following amounts:

 

£5 (Crown) - for any amount

£2 - for any amount

£1 - for any amount

50p - for any amount not exceeding £10

25p (Crown) - for any amount not exceeding £10

20p - for any amount not exceeding £10

10p - for any amount not exceeding £5

5p - for any amount not exceeding £5

2p - for any amount not exceeding 20p

1p - for any amount not exceeding 20p

 

My bold

[Shoestring]

Thank you again patdavies re your post of the Royal Mint concerning their definition of legal tender.

 

Having parsed what they say, I am not (yet) deterred from my earlier statemments. I think the various caveats included in the Royal Mint paragraph to be of significance. Additionally, the bit they wrote about both parties being "free to agree" to settle a debt using means other than legal tender is interesting. Putting this another way, if I choose to effect payment by notes and coin in the exact amount due (hardly a hardship is it) but refuse to pay by other means, then (it seems) BT must accept that payment in full discharge of the debt.

 

In posting on this subject I was hoping for a legal mind to provide current and insightful thinking on this subject. If there are any lawyers out there who are knowledgeable about this arcane subject please be kind enough to make a contribution to this thread.

 

As it now stands, I intend to inform BT of my intent to pay by legal tender only and to state that I regard this as being in full payment of their debt. In any event I will not pay the penalty charge under any circumstances for the reasons already stated.

 

According to Oftel the likely outcome of this action will be for BT to close my account. They won't take me to court for the sum of £4.50. Pity.

 

Shoestring

[patdavies]

 

Additionally, the bit they wrote about both parties being "free to agree" to settle a debt using means other than legal tender is interesting. Putting this another way, if I choose to effect payment by notes and coin in the exact amount due (hardly a hardship is it) but refuse to pay by other means, then (it seems) BT must accept that payment in full discharge of the debt.

 

 

I would say that you don't, because BT would not be party to an agreement to pay in 'legal tender'.

 

Your example is not an agreement; it's you dictating terms

[buzby]

Your example is not an agreement; it's you dictating terms

 

But then, so are they!

[patdavies]

Exactly, so there is no agreement

[Guest Bert52]

I'm sorry shoestring but anybody who quotes Wikipedia as the basis for a debate, especially a legal/financial one, I cannot take seriously.

 

However, an account agreed to be paid in arrears, which is what I gather this is as I am not foolish enough to be with BT, is not a debt but, rather, simply an account agreed to be paid in arrears.

 

These arrears are not at default as it is what you, and BT, have agreed to. A debt is only created, in an agreement such as this, should you default.

 

Watchdog are good but sometimes they can impinge on things like this and make it worse for the majority whilst only helping, dare I say it, the more irresponsible.

 

Hardly consumer champions in this particular case.

 

By the way, how would you feel as one large retailer are reported to have said-

 

'How would a customer like it if they were to pay a £20 note for goods at the till which only totalled 49 pence and we refused to give the change back?'

 

Which, by law, they are entitled to do!

 

Just switch from BT. Who on earth would be with them anyway?? Or British Gas??

[Rich44]

This really bugs me about these companies as all they do is declare these costs when paying tax and they simply don't pay tax on these expenses so I fail to see why they feel the need to punish the consumer

[Guest tlusnoc]

I for one agree with the likes of BT in attempting to get everyone to pay by direct debit. As for the extra charge they are intending to impose, there is nothing new about this, as mobile phone operators in the early days before they insisted on a direct debit being set up on opening the account, always used to charge an extra fee if paid other than by direct debit. Its called progress and whether we like it or not, we are moving slowly but surely towards a cashless society.

[Rich44]

so how about the next thing being those that pay by DD quarterly get a charge because BT want it monthly or perhaps they charge extra because they want the line rental for 12 months in advance.

 

Its NOT progress its the thin end of the wedge and its WRONG!!!

 

My mother in law cannot get a bank account as she is a discharged bankrupt and despite all this she cannot even get a simple bank account from anywhere and she's disabled and cant do anything about it so she gets penalised by everyone and shes one of the most vulnerable people in society.

 

The thing is stuff like this doesnt affect the people who can afford it it affects the elderly and the vulnerable.

 

From my own PoV it doesnt bother me I use DD etc but I like to think I am standing up for the people who dont have a voice.

 

As for a cashless society well thats a load of rubbish it wont happen for at least another generation because there are too many people out there who dont trust the banks especially after this whole bank charges fiasco

[Guest tlusnoc]

As for a cashless society well thats a load of rubbish it wont happen for at least another generation

 

Bit of a contradiction from you there Rich44, you say it's a load of rubbish, then you say it won't happen for at least another generation. I did say we were moving slowly but surely towards one, and never put a timescale on it.

 

As for those that can't get a basic bank account, my understanding is that there are basic accounts available to discharged bankrupts. It is mainly those with a record of fraud who can't open one, so again I don't see the problem.

[chocolatte]

I buy a car for £7000, pay the garage £7000, cash, I drive away in my car.

Do I then get a bill through the post asking for the cost of the man from the garage going to his bank to pay in the cash I gave him? NO!

I paid for what I got, so why do BT, after you have paid for the service, charge you for paying for the service?

They only want you to pay by DD so the money is garanteed into their account at a certain time each month to start earning more interest, I always pay after the red reminder, so the money is mine longer, earning interest for me!

[demon_x_slash]

Direct debits are NOT the way to go. They're all variable now, which is an utter disgrace. I'm slowly expunging them from our finances, meeting hassle and bewilderment on the way on the part of the companies concerned. They can't understand why I'd want to switch. Ha! Why should I give them carte-blanche, full access to my account so that they can take what they want, when they want? The Direct Debit Guarantee seems to be ridden over roughshod unless you make a fuss, and I don't want to have to go to my branch and complain loudly until I get seen (AGAIN) because some company has decided that they'll take three pounds more this month... Direct Debit is like handing over the golden key to the door of your account. It's not on.

[demon_x_slash]

Because I don't feel comfortable giving a company direct access to take whatever they want, whenever they want. A variable DDM gives them the power to do so. I wouldn't hand over my cashcard and PIN to an employee of this company; I would, however, hand them a cheque, with a fixed amount and a fixed date. I have no problem with fixed DDMs, but they've been phased out (I wonder why? ) I suppose it all comes down to trust - and I don't trust 'em.

[buzby]

I do feel as though people are scaremongering when it comes to this subject.

 

Ah - someone who hasn't faced destitution in the eye, all because 1 single utility misused their ability and the finely balanced deck of cards came tumbling down.

 

Whilst I have yet to find I have received flawless billing from any of my suppliers, the issue here is the complete and utter total surrender of your finances to a third party who has the ability to empty your bank account due to 'computer error', and only be compelled to put you back - only into the position you were in at the time the debit came out, NOT for the financial mayhem caused by subsequent debits being unmet due to their error, and the time taken by you alone to unravel the mess and hopefully seek refunds of charges billed as a result of the error. The 'Guarantee' misses one important thing - consequential loss.

 

Demon is right to be cautious to be careful with his money. After all, if it all goes wrong he has only himself to blame, The same holds true if his bank account is emptied by 4 suppliers computer systems getting it wrong, but the mess takes much longer to resolve.

 

Since you feel we're being unduly alarmist - could I ask you why you appear to have such unbridled faith in a system that effectively vests control of your finances to computers? Even if they didn't get it wrong - suppose your salary was late in going in... just how easy will it be for you to employ brinkmanship to resolve the lack of funds when all the bills hit?

 

When I eventually lose the plot, I'll trust my wife to make these payments on my behalf - I will never trust someone I do not know to look after my interests, because the will not. People have been brainwashed that the 'system' will take care of them and it cannot run downhill out of control.

 

It can, and does.

[chocolatte]

Sorry demon, but I have to disagree with you. I really can't see why yourself and others have a problem with direct debits whether they be variable or not. The Direct Debit Guarantee Scheme works perfectly well in my opinion. I have on a number of occasions had to dispute direct debits with my bank and they have always without question recalled it and credited my account immediately with no questions asked. I do feel as though people are scaremongering when it comes to this subject.

Sorry tlusnoc, I have to agree with demon on this one, for example, BT for one can take as much as they like in any single month with a direct debit, so if your telephone usage has increased then they can alter the amount to suit them, also, if you don't have the required funds in your account, what happens? Yes, you guessed, nuff said.

[Guest tlusnoc]

Yes, I appreciate that, however they do give you sufficient notice of how much they will be taking and also a date. Therefore it is up to you, to ensure sufficient funds are in the account, after all the bill is due on demand and you would have to pay it regardless of the method of payment.

[chocolatte]

so how about the next thing being those that pay by DD quarterly get a charge because BT want it monthly or perhaps they charge extra because they want the line rental for 12 months in advance.

 

Its NOT progress its the thin end of the wedge and its WRONG!!!

 

My mother in law cannot get a bank account as she is a discharged bankrupt and despite all this she cannot even get a simple bank account from anywhere and she's disabled and cant do anything about it so she gets penalised by everyone and shes one of the most vulnerable people in society.

 

The thing is stuff like this doesnt affect the people who can afford it it affects the elderly and the vulnerable.

 

From my own PoV it doesnt bother me I use DD etc but I like to think I am standing up for the people who dont have a voice.

 

As for a cashless society well thats a load of rubbish it wont happen for at least another generation because there are too many people out there who dont trust the banks especially after this whole bank charges fiasco

Thoought this may be useful for your mother in law, although the post office may have already told her about it.

http://www.postoffice.co.uk/portal/po/content1?catId=19400181&mediaId=19900206

[demon_x_slash]

For example:

 

Here

 

Here

 

Here

 

Here

 

Need I search the forums for more? Variable Direct Debits cause merry hell with peoples' budgeting, and the Guarantee is only enforced when the customer puts themselves out (sometimes wayyy out); that is not how the Guarantee is meant to operate!