Penalties for not paying by direct debit

[buzby]

But the Post Office do exacly the same thing!

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Who is the phone company? If BT, their online service is quite impressive and you can see the data they hold about you. Once registered with your Customer Number you do get a fast track to CS and billing issues - like the wrong address - can be dealt with quickly.

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However, it is worth noting that the Irish Government has enacted legislation PREVENTING firms from charging differing amounts depending on the method of payment used. Which makes you think, if the Irish can see that it is unfair and have actually done something about it, our TS should be campaigning for a similar outcome, not simply saying 'it's legal', and leaving it at that.

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Why not turn it on its head? It is not ILLEGAL...yet (but should be) - we just need to campaign for it.

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However, I still have my original Orange service contract (long before 'Pay monthly' was coined, and I have not specifically agreed to those changes. I have never had a new phone from them since 1996 and whilst they can assert I'm covered by the revised T&C's I've never been formally advised of them.

 

Of course, all we need is to follow the Irish Route where this type of charging is outlawed, then it'll fall under the UTCC remit and we'll all be happy!

[buzby]

Also, I have noticed that my business bill from BT doesn't include an additional charge for paying by cheque... why is this??

 

Because it doesn't apply to Business Lines - only Residential. Why? Because firms would tall them to take a hike and go elsewhere....

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All the details are on their website. The main difference is that you get a free Classified Directory entry, and a higher priority in fault repairs - usually same day, or next-day.

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by the way paid my bill on 12th July have not heard a peep yet maybe Debt Collector gonna turn up on my doorstep wanting to know how l'm gonna pay this £4.50 l owe!!

 

That's because it'll be shown as an underpayment oin your next bill. Since the bill wasn't paid in full, the Late Payment Charge will also be applied.

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Maybe, maybe not. However service will be disrupted - and if BB access is part of this, service removal is almost guaranteed, irrespective of whatever the underlying problem is.

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Nope - this is a different issue entirely. I raised it with my MP, who passed it to the OFT. The OFT responded first to clarify it was nothing to do with the action against banks for penalty charges, however they were aware of the 'problem' and would be watching if consumers were being disadvantaged.

 

Since then, Ireland (Republic) has totally outlawed it - only SKY TV was the major loser in this, and RoI customers now pay the same irrespective of the payment method. The OFT in the meantime has done nothing.

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No point arguing it with me - I'm only the messenger! I complained to Trading Standards, my MP, who passed it to the OFT and all said there were entitled to charge in this way (unless they subsequently decide otherwise).

 

Read this, from an earlier thread: http://www.consumeractiongroup.co.uk/forum/general-consumer-issues/64626-non-ddm-charges-mps.html?highlight=exclusion

 

For me, the issue isn't penalties, it is when did the consumer EVER become legally responsible for the recipients costs it processing a payment? It's a joke. You pay them by any method they offer, and THEY pay their costs in processing the payment as part of their cost of doing business.

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I think they didn't pursue this because they all had a hand in the latest ploy, 'private firm' ATMs that DO charge. The trouble is most of the UK public don't care, just roll over, and pay.

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Paypoint is a third-party payment system and any amount you pay in at the shop counter has quite a high percentage 5-7% deducted before it arrives at the recipient. Therefor if you were paying Virgin, not only would it take up to 5 days to reach your account, they would not receive all of the funds you paid in, these would have been swallowed up in fees by the retailer and PayPoint service.

 

Effectively, you would be supporting VMs argument that they need to charge more for non-DD payments, as you would be getting your services at a discount, compared to those who paid in full. (If you see what I mean). The best way is to use PC or Phone Banking, this way the delay is usually only 3 days maximum, and the amount you send is the amount they receive.

 

So, you are in error by surmising a PayPoint paying cash is the same as handing it over to VM's branch office (if they had one). It isn't!

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They argue they have to employ staff, pay rent and rates and shift coins around so it certainly is not without additional overheads. Do remember, you used to be able to pay your BT bill at a phone shop, now just a memory. Phone Shops were sold to O2 (the mobile network) and that facility disappeared, before BT sold off O2 to Telefonica.

 

PC and/or Phone Banking is a facility offered by most of the High Street banks, there are also Internet Based banks like Egg, Cahoot and First Direct, to name just a few.

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Stand up T-Mobile, and take a bow. Their new contracts have a new definition for the annoying 'Non DD payment' charge. Here are the terms;

 

A £3 separate payment handling charge applies for processing payments by methods other than direct debit or BACS payments made via online or telephone banking.

As you can see, the stranglehold has been broken and a MUCH fairer system in place. If you know of any other firms that are offering a similar waiver, do let us know!

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It's quite logical - because that's the way their IT guys have set up the system! IF there are DD instructions on file, AND the account is in credit (because you made a card payment), the DD won't be taken and the fee for non-DD will not be applied. However the same would apply if you posted them a cheque in good time for the debit date.

 

Of course it's not a 'processing fee' whatever gave you that idea? Folk are brainwashed into believing that they must somehow pay their suppliers costs for back-office systems to provide yet another profit and revenue stream. If people had the sense to react and leave the firms that try this on, they'd soon stop it.

 

It'll be interesting to see how OFCOM will rule on this type of unlicensed banditry, as they're currently looking at it.

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Having now paid Virgin Media £50 in non-DD charges, I set about contacting their acting CEO (Neil Berkett) to resolve the issue. My complaint was passed to their Executive Office staff to deal with and after a phone call, was advised politely, that the charges stand and that it was their company policy to uphold them.

 

Now, didn't somebody say they got a refund....?

[buzby]

It's your definition of 'unfair' - a judge could construe if it doesn't cost you any more to pay via this company (and BT has been very careful to make no distinction other than this is the 'payment processing' arm) then there IS no unfairness to the customer. That said, it could be argued this is no different for 'factoring' where a firm supplies the service and the billing is outsourced, they eventually receive 95% of the fees paid, the remaining 5% is the factoring companies cut.

 

The interesting part in all this, is that by splitting the service and the payment mechanisms, they've a better chance of landing the billing costs on the customer as an additional expense - an expense that wouldn't be there if the firm had continued to fully control and keep in-house their various departments.

[buzby]

I think the issue remains that the fee must be 'reasonable'. It is being suggested that the best course of action is to respond to the company, outlining your concerns that these fees are an unwarranted penalty on consumers, and that since it is impossible to 'opt out', you wish your complaint to be noted, and that your reserve the right to take whatever action necessary to protect YOUR interests, and that you retain the right to recover all overpayments made, without prior notice, and with full interest at 3% over Band of England base rate until the company ceases the policy.

 

The benefit is you're not asking their permission, just ensuring your objection is noted and leaving the way clear for recover of all money, plus interest at an unspecified date in the future.

[buzby]

There is a petition going for this;

 

Petition to: To make it illegal for companies to impose an administration charge if not wishing to pay Via Direct Debit.

 

There aren't many on it so come on you lot!

 

This petition closed in January - want to know how many folk were actually concerned with this issue, and prepared to sign the petition. A measly 211! No wonder these companies are sure they are on to a winner....

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Interesting. I've actually NEVER been charged this fee (and I always pay by BACS credit) but this was on a business contract.... but you're right about T-Mobile's change, and it'll be good news if they all follow the logic.

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It's all part of confusion marketing. When direct debits started, firms did often offer a discount to customers paying this way. They then got greedy and the discounts dropped off, and they realised they could(legally) charge you more whilst the gullible public were told they would actually save, because those that didn't would pay more! The same net result, except the firm made more money by increasing its revenue stream.

 

This meant that the price you paid for services actually differed - depending on how you paid for them, and something the Irish Parliament ( Dail) outlawed last year - meaning Sky has to stop hitting Irish customers with their 'Invoice' charge. Here, our government is too busy faffing around with ID cards to give a toss about us being ripped off...

[buzby]

Here is the response I recieved from VIRGIN MEDIA regarding my email complaint to their Chief Executive of paying an additional £5pm for a 'non DD' penalty;

 

All customers who do not pay their account by Direct Debit are charged a monthly payment handling fee, currently £5.00.

There are significant costs in managing other payment methods each month so we encourage customers to pay by direct debit, which is usually easier and more cost effective for both parties. However, we do respect some customers' wishes to pay by other means and therefore offer a choice. We are also committed to offering monthly billing, which often makes household budgeting easier for consumers. Nearly three-quarters of our customers already pay by direct debit, which is now available to everyone.

Many companies have a policy of offering Direct Debit paying customers a preferential rate. This is usually described as a 'Direct Debit discount' or similar. However, the net result is the same; customers not paying by Direct Debit pay more.

We would prefer to be open and honest with our customers, clearly labelling this price difference as a charge on the bills of non-Direct Debit paying customers.

 

This appears to be a fairly standard response not particularly answering my queries. He was my response;

 

(1) On the occasions where NTL were given the authority to access my bank account,on two occasions the company removed considerable amounts of money from my account without notice or agreement (breaking the terms of the DDM Guarantee). In the weeks it took to resolve the issue, 4 other Direct Debits were bounced due to lack of funds, and NTL refused to pay the consequential losses incurred by their error. I would contend that the company has lost its right to dictate that I should trust the company's billing methods, and as such I should not be financially penalised for protecting my interests. Billing errors are now resolved prior to payment, however unless Virgin Media can provide a full guarantee and indemnify me that any and all expenses I may incur ( over and above the direct debit 'guarantee') to rectify errors caused by incorrect billing, It would not be in my interests to do so.

(2) I am being asked to believe that it costs Virgin Media an additional £60 per annum to accept my 12 electronic payments. Should Virgin Media wish to be 'open and honest' with its customers, I would appreciate a breakdown of how it costs the company so much to accept my payments using these means.

(3) Since pricing differentials based on payment methods is now prohibited by law within the Republic of Ireland, I would be grateful if Virgin Media can point to any legal substantiation that as a consumer, I have any obligation to pay fees based on a chosen method of payment.

(4) Would the company be agreeable to letting the courts decide on the validity of its claim that consumers a required to pay a £60 penalty for services supplied?

[5] As all payments made to my account have been credited in good time and by electronic transfer, I do not believe that charging me £60 is either fair or reasonable. As the company regularly repaid these fees on a quarterly basis in the past, it would appear the company agreed, I now wish this amount to be credited to my account at your earliest convenience. If this is not possible, please supply details of where you require an LBA (Letter Before Action) to be served, prior to formal litigation commencing.

[6] Should OFCOMs future decision on payment methods support my contention, I would accept a bill credit to the amount paid to date, plus interest.

 

Sincerely,

 

This has established my intention to force the issue via the Small Claims Court. Should anyone be in a similar situation and want to share notes, feel free to PM me .

[buzby]

They have until the month end to respond (you'll not be surprised there has been no reply whatsoever from the Chief Executive's Office. I'll keep the read updated with the tale as it unfolds!

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I can't comment on BTs card scheme, I've no experience of it - but the issue is more complex. Apart from sending them a cheque, ALL other transfers are 'electronic' and each costing the company varying amounts to process. My contention is that that is the price of them doing business, if they offer the service, they pay the costs for so doing. We're getting bludgeoned into accepting that the poor company needs help to pay for its administration because some methods are better (cheaper) for it than others.

 

By leaving a small credit balance on your Sky account each time they bill you could avoid paying their 'Invoice Charge' the same may be true of BT, but I don't know. Your only way of finding out is to do as you suggest, and let us know!