BT Taken To Court By Customer Over Direct Debit Contract

[Legal Beagles]

A solicitor is set to take British Telecom to court for charging more to customers who do not pay their bills by direct debit.

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[enaid]

Re: BT Taken To Court By Customer Over Direct Debit Contract

This lady has been on TV this morning and I think the case is today'

I think this particular paragraph is magic
"Ros Fernihough said: "On a 10 pound note it says 'I promise to pay the bearer on demand the sum of ten pounds', not ten pounds plus a £1.50 handling fee."

[argentarius]

Re: BT Taken To Court By Customer Over Direct Debit Contract

I don't think there's any merit in this case. It's up to companies to determine how their customers pay them.

I love the quote on the message board:

Why doesn't this daft old biddy just pay by direct debit? And what's she talking about when she quotes the wording on a tenner - in what way is that even remotely relevant? It's stupid, lazy, ignorant, change-resistant, parochial, cretins like this who clog up the courts. I want to to know what the government is going to do about people like her.

I wouldn't necessarily put it quite as harshly as that, but really this is a spurious case.

This is an up-front, known cost; BT's not a monopoly supplier and people can choose from any number of telephony providers. And people can avoid it if they get over their unreasonable objections to DD.

[Amethyst]

Re: BT Taken To Court By Customer Over Direct Debit Contract

And how about the poorest people in society who DONT have the means to pay by DD ? Why should they have to pay extra ?

[enaid]

Re: BT Taken To Court By Customer Over Direct Debit Contract

Not sure she is a "daft old biddy" she is a lawyer I believe and is not doing it for herself, as much as for the thousands of people who have contacted her about this matter.

[Kafka]

Re: BT Taken To Court By Customer Over Direct Debit Contract

Charging people extra for not paying the way you want them too - when there is no cost implication - is a stealth charge and a penalty, becoming used by a growing number of organisations. I have yet to hear a credible defence of these charges. DDs have been around for decades and it has only recently become 'necessary' to force everyone to use them and to penalise those that do not. Why is this if the case for them is now so compelling?

The reasonable objections that appear to have eluded you include the fact that DDs are sometimes presented early, requiring work to correct and charges that can't always be recovered (this has happened to me through no fault of my own) plus the fact that the banks use DDs as an easy source of generating penalty income.

Because of the problems I've had over the years and the money they have cost me, I now use them as little as possible and control finances directly myself.

[Amethyst]

Re: BT Taken To Court By Customer Over Direct Debit Contract

A solicitor is set to take British Telecom to court for charging more to customers who do not pay their bills by direct debit.

BT charges cash customers extra

Ros Fernihough believes she is being wrongly penalised because she pays her bills in cash.

In May last year BT introduced an £18 per year charge for the 2.9 million customers who pay they phone bills by cash, cheque, debit or credit card.
BT says it costs more to process non-direct debit payments. It also costs more to chase people who do not pay.

But Ros Fernihough, a 62-year-old lawyer from Walsall said: "The charge is fundamentally unfair. Many people, especially those on the margins of society and who are on low incomes find it very difficult to find any increase for any bill."

Other organisations charge extra to non-direct debit customers. The annual charge for the British Gas customer who is not on direct debit is around £1,055.
Those on direct debit are charged £87 less. Vodafone add £3.50 to the monthly bills of all their customers who do not pay by direct debit. They say this is to cover extra administration costs.

Steve Weller from the online price comparison service uSwitch said: "Customers could save a staggering £237m a year by simply changing the way they handle their phone bills.

"With charges as high as £60 a year, customers should seriously consider whether they wish to continue settling their bills by cheque, cash or card.

"If they do, they could still cut costs by moving to a company that offers cheaper line rental."

Ros Fernihough said: "On a 10 pound note it says 'I promise to pay the bearer on demand the sum of ten pounds', not ten pounds plus a £1.50 handling fee."
She is bringing the case under the Unfair Terms in Consumer Contracts Regulation 1999 and is due to be heard at Walsall County Court.

The judge has already ruled that her claim is of considerable public importance.

She says it has been a hard struggle but believes she will take the hopes of millions of people into the courtroom with her.

The outcome could lead to companies lifting the charges they levy on cash paying customers.

[Guest]

Re: BT Taken To Court By Customer Over Direct Debit Contract

I don't think there's any merit in this case. It's up to companies to determine how their customers pay them.

I love the quote on the message board: I wouldn't necessarily put it quite as harshly as that, but really this is a spurious case.

This is an up-front, known cost; BT's not a monopoly supplier and people can choose from any number of telephony providers. And people can avoid it if they get over their unreasonable objections to DD.

I think this is a very narrow-minded interpretation of the situation.

The cost of processing customers' payments are part of the cost of doing business. It is clear that the purpose of the fees is to provide yet another profit and revenue stream, nothing more. These fees are not legitimate 'processing fees' and customers should not be responsible for paying their suppliers costs for back-office systems. The charges are unfair as they do not reflect the true cost of processing payments, such charges are not lawful if they exceed those costs.

Despite what you may think, the Direct Debit system is far from infallible and the notion that we, as customers must "get over [our] unreasonable objections to DD" is frankly astonishing, but perhaps not surprising from you.

When I am buying an ongoing service, then I expect to be able to pay via any method I choose and not be penalised for certain methods at the whim of my supplier. I will not be dictated too by suppliers and I do not see why anybody should be.

[EXC]

Re: BT Taken To Court By Customer Over Direct Debit Contract

I'd say she has an unchallegable right to challenge any charge and bringing one case is hardly cloogging up the court system.

This is obviously an issue for a lot of people and if the legitmacy of this new type of charging which is worth millions to the public can be settled in court then what's the problem.

These kind of payment proccessing charges never existed until a few years ago so what's changed?

I don't think there's any merit in this case. It's up to companies to determine how their customers pay them.

I love the quote on the message board: I wouldn't necessarily put it quite as harshly as that, but really this is a spurious case.

This is an up-front, known cost; BT's not a monopoly supplier and people can choose from any number of telephony providers. And people can avoid it if they get over their unreasonable objections to DD.

[Kafka]

Re: BT Taken To Court By Customer Over Direct Debit Contract

When I complained about this recently, this is the condescending response from the Indian call centre. It took 6 weeks, 2 emails and the threat of reporting them to get even this pathetic response. Pity they don't spend some of the new penalty income on customer service.

Nice to know that I'm actually better off though isn't it? How stupid do they think we are? Their helpful recommendation for people who don't want to use quarterly DDs is to do monthly DDs. Unbelievable.


Dear Mr Kafka

Thank you for your e-mail dated 20/9/07 regarding Payment Processing
Fee..

I am sorry for the delay in replying to you and for any inconvenience
this may have caused.

With regards to your e-mail, I would like to inform that every single
customer is important to us and we take your views seriously.

On May 1st we reduced the price of monthly line rental by £1.00 and
broadband by £1.00 for customers who don't pay by Direct Debit. At the
same time, a separate payment processing fee of £1.50 a month was
introduced. This is not a penalty charge but a separate fee for methods of
payment which cost us more to process.

So the net effect is only 50p a month more for anyone who just has a
phone line with us, but anyone who takes broadband as well will be 50p a
month better off.

BT's fee for non-Direct Debit payments is amongst the lowest around.
For example, Virgin Media charge £5 a month. Many companies, such as
Carphone Warehouse, will only accept customers who agree to pay by Direct
Debit.

The payment processing fee has been introduced because 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
involve spending time and money.

At BT, we are committed to offering our customers a wide choice of ways
to pay their bills. Whilst we encourage choice of payment, it is worth
pointing out that Direct Debit has benefits for customers. It saves
time and is convenient. It means that your BT bill is one less thing to
worry about.

If you choose to pay by Direct Debit, we give you up to ten days from
the time of receiving the bill before processing the Direct Debit
payment giving you plenty of time to ask questions, and we tell you on the
bill when the amount will be taken from your account. There is also a
Direct Debit Guarantee which protects you and your money. If any error is
made by BT or your bank or building society, you are guaranteed a full
and immediate refund from your branch of the amount paid.

If budgeting is important to you, Monthly Payment Plan is a great way
to manage your budget and help you spread the cost of your bills.
Monthly Payment Plan is a Direct Debit payment option where a fixed amount we
agree with you is debited from your account every month.

If you sign up for direct debit or monthly payment plan, between
receiving your first and second bill after May 1st, we will automatically
waive the initial payment processing fee.

If you do not have a bank account, but would like to take advantage of
Direct Debit or Monthly Payment Plan, a basic bank account is now
available to almost everyone in the UK through the Post Office or many high
street banks. You can contact the Financial Services Authority for a
list of current basic bank account providers.

At BT we constantly strive to give all our customers best value for
money. With that in mind, last summer we announced over £200 million of
price cuts and from June 1st, 2007, we are bringing back our best offer
on Evening and Weekend inclusive calls as a thank you to loyal
customers. See Compare our Calling Plans | Home phone | BT.com for details.

Once again I am sorry for the problems you have experienced with BT
recently.

Thank you for contacting BT.

Yours sincerely,

Amandeep Kaur
eContact Customer Service

[calamity jane]

Re: BT Taken To Court By Customer Over Direct Debit Contract

but anyone who takes broadband as well will be 50p a
month better off.

Maybe they should improve the line so I can get Broadband and then I can be 50p a month better off(in fact £1.50 a month better off because, last time I looked, aol Broadband was £1 cheaper than the dial up )

[Legal Beagles]

BT customer loses case on charges

A solicitor loses her case against BT over "unfair charges" for cash-paying customers.

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[Kafka]

Re: BT customer loses case on charges

This is another shocking misjudgement by an incompent, anti-consumer judge.

The decision will probably result in many more cases of this form of penalty charge being applied.

[argentarius]

Re: BT Taken To Court By Customer Over Direct Debit Contract

Oh dear, it didn't go the way you wanted.

BT are quoted in today's papers as having won 5 cases on this very issue. Perhaps the "daft old biddy" shouldn't have wasted her time after all?

Your arguments about it being up to you how to pay your suppliers are wrong. No supplier has to agree to supply you at all, let alone allow you to pay by whichever inefficient method you choose.

There clearly are cost implications with accepting payment in cash or cheque rather than DD. The benefits of DD to the supplier are that they can initiate an automated DD run; they get all the money on the due date, and they are then notified individually of each failed DD so that they can follow up.

With cash/cheque payment, they have to wait for the money to turn up at some random point in time; they have to issue reminders to the unreasonable people who think it's acceptable to pay all their bills late; and they then have to initiate collection action significantly later than they would have done for DD payment.

As I stated before, BT are not a monopoly and there is a choice of telephony providers. Similarly there is a competitive market for other utility services (e.g. gas and electricity) and people can choose the supplier with the terms they like.

Nobody appears to have much of a problem with discounts for DD payment; charging surcharges for cash payment is the same thing with a different name.

The only reason BT use this method, IMHO, is that the basic charges for their services are regulated whilst the cash payment surcharges are not. Now, if that's the cause of people's ire, then the regulation regime should be changed - and that's the way for "consumer champions" to attack it, not spurious claims in the courts. But that only applies to BT and not the many other suppliers who also surcharge.

Amethyst Anyone who is merely "poor" can get a basic bank account with DD facilities. The idea that the poorest are excluded from banking is not true. As I understand it the only people who may not be able to get basic bank accounts very easily are those with criminal convictions for fraud and the like, not the "poor" people this case is supposedly to protect.

Kafka It's not a penalty charge and it's lazy wording to call it one.

EXC I didn't say she was clogging up the court system; I said it was a spurious case. And now she's lost.

Cetelco So what if it's a revenue stream? BT are in business to make money for their shareholders. It doesn't matter if they charge £10 for line rental and £1 for cash payment, per month, or £11 for line rental. The total price is what matters. As the judge said, the cash payment charge is a core term and an element of the price for the service.

I don't understand people's irrational problems with DD. I have at least 15 direct debits leaving my account every month. None has ever been debited early. You all know very well that if that happens, you have an absolute right to reclaim the money from your bank under the DD guarantee, and you have an absolute case to complain to your service provider and recover any resultant costs. So the objection to DD appears to boil down to "sometimes" service providers take the money early, or take the wrong amount, and it's too hard to sort things out. Regarding "wrong amount" DDs, you have to get advance notice of any amount to be debited and there is time to resolve any dispute before the payment is taken; if that dispute isn't resolved in time you can always cancel the DD mandate and tell the service provider why you have done so.

[cinders]

Re: BT Taken To Court By Customer Over Direct Debit Contract

I have at least 15 direct debits leaving my account every month. None has ever been debited early. - None have ever bounced then, leaving you in the situation where others have bounced as a result of charges inposed in the previous months by the bank? Do you understand the never ending spiral of charges that accumulate on accounts and get people in deeper and deeper? I run a very tight ship and cannot budget for charges on my account, I get one charge, it throws everything out!
Amethyst Anyone who is merely "poor" can get a basic bank account with DD facilities. The idea that the poorest are excluded from banking is not true. As I understand it the only people who may not be able to get basic bank accounts very easily are those with criminal convictions for fraud and the like, not the "poor" people this case is supposedly to protect. Not anyone with a basic bank account can have d/d facilities, some basic accounts DO NOT provide this facility. It is not only people with fraud convictions that struggle to get basic bank accounts, I know of one person that couldn't get a bank account at all, full stop. She had to get her wages paid in a cheque and get it cashed by her mother. You don't appear to have had any kind of struggle financially and you really dont appear to understand the struggle that people have once the start getting these charges or to know that every single pound in your bank account is very important and a slight overspend can cause so much trouble!
Cetelco So what if it's a revenue stream? BT are in business to make money for their shareholders. It doesn't matter if they charge £10 for line rental and £1 for cash payment, per month, or £11 for line rental. The total price is what matters. As the judge said, the cash payment charge is a core term and an element of the price for the service. you have missed Cetelcos point completely. If the consumer is being told that the charge is the cost of processing their form of payment then it should be exactly that, the TRUE cost, not a cloak and dagger way of squeezing yet more profit out of the consumer. I am sure Cetelco will be along with comments.
Loulou