Penalties for not paying by direct debit

[Mark_Blackpool]

I can't believe this worked - cheap scanners have definitely got better at the OCR!

 

Document as follows:

 

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Information about the payment processing fee.

Prescribed information under the Financial Services (Distance Marketing) Regulations 2004.

We are providing the information below on the payment processing fee as required by the Financial Services (Distance Marketing) Regulations 2004. We advise you to read this information carefully. It concerns a change to your contractual relationship with BT. Please note, however, that the payment processing fee itself remains unchanged at £1.50 per month or £4.50 per quarter and will be charged directly to your account as normal if you are not paying by direct debit or monthly payment plan. There will also be no change to how the payment processing fee is shown on your BT bill.

If you take BT Telephony Services ("telephony"), BT Total Broadband ("broadband")

or BT Vision ("Vision") and you choose not to pay by direct debit or monthly payment plan, BT now requires you to enter into a separate agreement with BT Payment Services Limited ("BTPS"), who will collect and process your payment. You have a statutory right to cancel your contract with BTPS, as described in the terms and conditions, but please note that if you do cancel it, you will be in breach of your contract with BT for telephony or broad band service, or for Vision, and BT will have the right to terminate that service as a result. Our terms and conditions for telephony, broadband and Vision have been changed as of 1st February 2008.

If you choose to pay by means other than direct debit or monthly payment plan, then when you pay your next bill, you are agreeing to enter into a separate contract with BTPS. BTPS agrees to process your payments and to ensure that your payment reaches us promptly. In return, you are agreeing to pay a fee for that service each time you pay your bill. In other words, as long as you take telephony, broadband or Vision from us, and choose not to pay by direct debit or monthly payment plan, you must payBTPS for collecting and processing your payment. There are some services to which the fee does not apply, and these are also set out in the terms and conditions.

The information in this notice relating to the payment processing service, and the terms and conditions of that service, is provided by BT on behalf of BTPS, a wholly-owned subsidiary of BT whose registered number is 6111881 and whose registered office is at 81 Newgate Street, London EClA 7 AJ.

Payment processing fee - your agreement with BT Payment Services limited.

1. Subject to paragraph 3, the fees under this agreement apply to you if you take BT Telephony Services, BT Total Broadband or BT Vision, and you choose not to pay your bill by direct debit or by monthly payment plan. This agreement starts when, having received a copy of these terms and conditions, you first make a payment for one of those services by any method other than direct debit or monthly payment plan.

2. You have a statutory right to cancel your agreement with BT Payment Services Limited (UBTPS").

That cancellation right will expire fourteen calendar days beginning on the day after you make your first payment as described in paragraph 1. You may cancel by writing to us at BT Payment Services, clo Bridge Court, The Close, Newcastle Upon Tyne NE13BA, bye-mailingusatresidential.services@bt.com or by sending a fax to 020 8810 9192. If you cancel but have already asked BTPS to process a payment on your behalf, for example by making a payment, you must still pay the fee for the processing of that payment. If you do not cancel this agreement, it will have effect until it is terminated.

3. You will not be charged a payment processing fee if you are a BT Basic, Pay&Call, Light User Scheme or In Contact Plus Customer.

4. You agree that unless you pay your bill by direct debit or monthly payment plan, you will pay BTPS a fee of £1.50 per month, if you pay your bills monthly, or £4.50 per quarter, if you pay quarterly, for payment collection and processing services. These fees are not subject to VAT. You agree to make the payment in the same manner and at the same time as you pay your BT bill.

5. BTPS agrees to collect and process promptly all payments made by you and to ensure that they are applied as necessary in settlement of the charges raised by BT to which they relate. BTPS will use the financial information provided by you only for the purposes of this agreement.

6. Sometimes, BTPS will need to change the charge or the t,erms of this agreement. BTPS will publish the details of all changes on line at BT Price List - Homepage

7. BTPS will also let you know about a change, including an increase in the fee, that it believes is likely to cause you material disadvantage, at least one month before it happens. BTPS will let you know about any other changes with your next available bill or via an alternative method if this is simpler.

8. If BTPS makes a change to this agreement that is to your material disadvantage, you may terminate your BT Telephony Services, BT Total Broadband or BT Vision agreement. You will not then have to pay a charge for ending that service early, provided that you let BT know that you want to end the agreement(s) within 10 days of having been informed of the change. BTPS will let you know that you have a right to end your BT Telephony Services, BT Total Broadband or BT Vision agreement early when it informs you of what it reasonably believes to be a change to this agreement that is to your material disadvantage.

9. This agreement is not subject to a minimum term and will continue unless and until it is terminated in accordance with this paragraph. The agreement will terminate once you have paid your last bill, if you no longer take any of the services referred to in paragraph 1.

10. Insofar as you have any dealings with BT regarding this agreement, BT is acting as agent for BTPS.

11. This agreement is not covered by an out of court dispute resolution process.

12. The contractual terms and all communications in connection with the payment processing service are supplied in English.

[davethorp]

Seems to me that the term in the BT contract that you breach if you cancel the contract with BTPS would come under the UTCCR

[mnrbig]

So what should our course of action be. It is pointless moving to a different provider as they all now charge a fee. "Market collusion" I think.

[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.

[Son of Shoestring]

If I interpret this correctly, this means that:

 

We have a contract with BT to supply services, at an agreed price.

 

This change to the Terms means we have to enter into a contract with a third party to process our payments.

 

Paying our next bill "deems" us to have entered into that contract.

 

If we do not pay our next bill because we do not agree to enter into that contract with a third party, we would then be in breach of our original contract with BT.

 

Therefore I do not see that this has any legal basis and is an "Unfair" and unenforcable Term.

 

I assume that what we should do is to write to BT explaining that while we will indeed pay our next bill (minus £4.50), it should not be construed as any acceptance of this Term, indeed we refute and reject it.

 

Should BT then decide to terminate supply, it it is they who are in breach of contract not us.

 

This seems a sensible approach to the problem. By writing to them you are formally registering your disagreement to the term they are trying to foist upon you. This leaves them the choice of canceling the service and not accepting your payments, or continuing to accept your payments and providing the service in the knowledge that their ploy has been recognized for what it was. I would only add the now familiar and boring proviso to make sure your letter is sent by recorded delivery, and a copy of the letter and the RD receipt be kept safe for future use if needed.

 

Shoestring

[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....

[howsyourfather]

Goodness me!

My latest monthly bill from Orange had no 'non direct debit charge' item! I did not ask for its removal although I did try about a year ago and gave up. I pay by BACS via internet banking and my case was that this method costs them even less to than direct debit.

 

I saw here that T-mobile have included customer BACS transfers alsongside DD as free - perhaps Orange knows it will lose custom and has followed suit. My bill said nothing about this change. Anyone else noticing this?

 

I have an outstanding issue with BT re non DD charges - this may make them rethink.

 

Cheers all!

[buzby]

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.

[citizenB]

But the Post Office do exacly the same thing!

 

 

I am joining this debate a bit late methinks but I have only just seen it. We have always paid our bill quarterly on receipt of the invoice and to be honest didnt realise at first we were being charged extra for not paying by DD. When it was noticed I telephoned the Post office to make the arrangements to pay by DD.. on thanking me for doing this I pointed out to the PO operator that I hadnt a choice as I was being penalised for not doing so. She was quite adamant... there WAS NOT a charge for not paying by DD but a discount for doing so.. !!.. is that a new one or what ?

[buzby]

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 .

[john]

Well done Busby. I will watch this thread with interest and look forward to your update.

[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!

[vengeancedemon]

I may be commenting on something already said.

I pay my telephone bill (BT) weekly amounts using theBT card, therefore it is an electronic transfer to BT ( presumably in the same vein as a DD)

I can anticipate my bill, and usually leave a small amount in credit after the account is received, will they charge me for "non DD"? a distinct penalty charge if ever their was

[buzby]

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!

[vengeancedemon]

Thank you for your thoughts

 

Sorry, I was not quite clear, its solely BT I am referring to, my aim is to feed via the BT card therefore "electronically to BT's account" amounts such that there is a surplus in the account, not much I'm not that generous! with the prepaid amounts covering the bill when it arrives, therefore

 

I cannot see how BT could say that they are incurring costs to process non DD payments, they are getting the money into their funds electonically I am letting this run for a bit on this method, see what happens and then a rude letter to the CEO of BT particularly with this ominous new "Contract" appearing, seems a little as if the OFT might actually do something for once

[buzby]

Actually the OFT are doing precisely nothing - its if OFCOM who are! See this: Ofcom review of additional charges | Ofcom

[un1boy]

Didn't they rule that people who were not paying the extra charge before they imposed didn't have to?

[buzby]

As I understood it, this was only a recommendation - and remains part of the consultation, rather than a firm policy. They go to great pains to explain they have no legal powers until a series of court cases, addressing the specific issues, are ruled upon.

[un1boy]

As I understood it, this was only a recommendation - and remains part of the consultation, rather than a firm policy. They go to great pains to explain they have no legal powers until a series of court cases, addressing the specific issues, are ruled upon.

 

What is the point of the these regulatory bodies?

[buzby]

My thought's exactly - a chocolate teapot. However, just as we (as consumers) are able to challenge the things we don't through the courts) UK firms have the same option, although it is STILL left up to us to challenge, with the 'recommendation' from the regulator!

[morteee]

here is a good one for you, my BT account is in CREDIT and therfore I havent sent them a payment for 2 months and guess what they have STILL charged me the 1.50 a month payment processing fee EVEN WHEN THERE WASNT A PAYMENT TO PROCESS!

 

I

[morteee]

here is a good one for you, my BT account is in CREDIT and therfore I havent sent them a payment for 2 months and guess what they have STILL charged me the 1.50 a month payment processing fee EVEN WHEN THERE WASNT A PAYMENT TO PROCESS!

 

I emailed them and this is what happened

 

my first mail

 

Customer Comments:

I pay by direct bank transfer as I am paid 4 weekly not calendar monthly consequently I am often in credit with my account.

Last billing period I was in enough credit to not pay anything to yourselves so I didn't.

what I am annoyed about is despite the fact that I am 1) online billing and therefore you have no processing costs as to producing a bill and 2) will not pay by Direct debit as you cannot set up one on a 4 weekly basis (I don't see why my personal finances should be dictated by yourselves not being able to take my payments appropriately) I am being charged £1.50 a MONTH for you to process payments

what is even MORE annoying is that despite being in CREDIT this month you have STILL charged me for processing my payment when one wasn't made!

How can you charge for something that hasn't been done!

I expect the £1.50 to be credited BACK to my account "

 

their initial response

 

"

Dear Miss (name incorrect),

Thank you for your e-mail about payment charges.

I am sorry that you have been charged for payment charges.

I would like to inform you that We are not penalising you for not having a bank account. Although we appreciate your early payment, the introduction of a payment processing fee is now a common practice across many organisations as it costs more to collect and process payments by other means than MPP / DD. Please note:

·That our new payment processing fee is one of the lowest in the industry.

· We have also reduced your line rentals by £1.00 per month to off-set the introduction of this fee.

(The majority of our customers now pay by MPP/DD, as they find this a more convenient and easier way to pay).

The introduction of a payment processing fee is now a common practice across many organisations as it costs more to collect and process payments by other means than MPP/DD.

Following are the benefits of paying through direct debit :-

1) Savings of up to £18.00 per year (or £21.00 if you take up e-billing as

well) .

2) Convenience/peace of mind .

3) Avoid late payment charges .

BT greatly appreciates your length of time with us. The introduction of a payment processing fee is now a common practice across many organisations as it costs more to collect and process payments by other means than MPP/DD.

I trust that this email will have helped to provide you with the clarification needed and I hope that it has also demonstrated to you that you concerns have been looked into thoroughly and professionally.

 

I am sorry, however only way to save this charges is to pay by Direct Debit.

If you have any further queries please do not hesitate to contact us again via e-mail.

Thank you for contacting BT.

Yours Sincerely,"

 

my response to that!

 

"

Secondly you haven’t addressed my concern here, my complaint isn’t about the charge in general but that you have charged me a payment processing fee when I haven’t made a payment so in effect you are charging me for a service you haven’t provided

Thirdly if you had read my complaint you would have realised that paying by Mpp/DD DOESN’T save me late payment charges as far as my bank is concerned on those months that your payment would fall the day before my payday as I am paid 4 weekly. (This is not un-common, my company employs over 3000 people and is FT100 so there are 3000 people who are paid like this in one small town for starters). Paying by MPP/DD would NOT be convenient for me, it would NOT offer me peace of mind

I would be more than happy to re-set up my MPP/DD if you could take the money 4 weekly instead of calendar monthly

What I would like is an explanation of WHY BT deem it fair practice to take a payment processing fee when there actually hasn’t been a charge made

I am also aware that OFCOM are currently investigating the accusations that customers have made against companies such as yourselves for unfair charges and therefore would like to see why BT think it is fair to take a charge when the service hasn’t been required, not even my bank has the gall to do that!

As for your claims that a lot of companies charge for this I have the dealings with the following

BT

Sky

North West Leicestershire County Council Atlantic gas and Electricity

O2

Severn Trent Water

Nildram

TV Licensing

Tesco Car and Home insurance

 

And various others

Out of all those companies (of which I am sure you recognise every single

one) your company and sky are the only two who operate these charges. That is hardly a large majority of companies is it.

If your explanation is either not forthcoming (as per this email) or not satisfactory (i.e. proving that the charge of 1.50 per payment is your actual cost and therefore not made up of what is in effect a penalty charge) I shall be adding my voice to those others who are protesting against this.

I look forward to your explanation of

1) Why you are charging me a Payment processing fee when there has been no payment to process

2) Your proof that this is your actual cost per payment processed

 

 

Regards

Miss (name correct!)"

 

their response this time

 

"

Dear Miss (name spelt correctly)

 

Thank you for your e-mail dated 3/3/08 about your telephone account.

.

With regards to your query about the payment processing fees, I apologise for you being addressed by the wrong name. I wish to inform you that you have been charged the payment processing fee in advance like the way your line rental has been charged. The extra fee reflects the costs of collecting non-direct debit payments, as some methods of payment are costly to process. But it's not just about the cost of taking the payments; following up when customers forget to pay on time does involves spending time and money. We believe that given the real difference in costs between payment methods it is fairer that the price that customers pay reflects the costs involved.

By calculating the cost we apply a general policy for all payment methods that are not automated. We calculate the cost by averaging it out across all payment methods other than Direct Debit or Monthly Payment Plan as well as the follow up costs if customers pay late or forget to pay.

The fee is not transaction-based, as this would unfairly disadvantage those who need to pay in several small instalments. Instead the costs are averaged on a monthly/quarterly basis across all customers using non-automated methods of payment. This can only ever be a general policy for all customers based on the cost we as a business incur.

However, payment processing fees for payments other then DD/MPP are common practice across the industry. BT?s is one of the lowest around.

Thus, even when you use online services to pay your bills, you would still be charged the payment processing fees, as it costs BT more to process that payment as compared to Direct Debit, since there are also costs involved from your bank's end when they have to transfer the online payment to BT's account, which inturn they impose on BT.

I understand that you feel otherwise, but I can assure you that BT would not like to impose any incorrect fees on its customers as it would be unfair to them. Moreover, I am sure you are aware that before BT can impose any charges on our customers, we have to take permission from all the regulatory authorities, mainly OFFCOM.

Further, I would like to state that MPP gives you the flexibility to choose any date of the month for your payment to be taken out on. Therefore, you can easily change your payment day according to your preference.

If you should have any further queries please do not hesitate to contact us again via e-mail.

Thank you for contacting BT.

Yours faithfully,"

 

my response to that?

 

I took everything I could AWAY from BT

 

vote with the feet!

[loz]

you have been charged the payment processing fee in advance

exactly. they charge you this fee without even finding out how you intend to pay, never mind the legality of the charge itself. as soon as i am able i am taking my business elsewhere.

[un1boy]

exactly. they charge you this fee without even finding out how you intend to pay, never mind the legality of the charge itself. as soon as i am able i am taking my business elsewhere.

 

Trouble is, that's not necessarily easy - i have a landline which is on incoming calls only because I use my mobile for all calls I need to make and only needed a BT line for the internet.

 

If my ISP said I didn't need a BT line, I wouldn't have - does anyone know why some ISP's stipulate havinga BT line?