BT: If You Don't Like Direct Debit And Pay By Cash, Beware Of The Charges!

LouLou

This is just a rant really. I phoned BT to query what the "Payment Charges" were on my bill. I pay £4.50 a quarter for this. I pay my BT bill online, always on time with my Maestro card. I also pay it partially with my BT Payment Card.

It turns out it's because I'm not paying with Direct Debit. Luckily I'm on paper-free billing or I'd be paying an additional charge.

When I took out my yearly broadband contract they told me they'd have to close my account if I refused to pay by Direct Debit, though they backtracked when I told them I'd take my custom elsewhere.

I had no idea I was being charged for the privilege of paying by cash until I queried it! I think it's shocking that they penalise people that don't want Direct Debit.

I'll be joining TalkTalk soon and they charge even more if you want a paper bill; £3.50 a month! Why do they charge so much, and why don't they tell you about the charges unless you ask?

Heinz

http://forums.moneysavingexpert.com/showthread.html?t=400053

LouLou

Thanks for the link, I had no idea about any of this. I'll be taking a DD with TalkTalk, it looks like I don't have a choice! It would have been nice for BT to send a letter letting me know. Or even tell me on the phone when I renew my yearly Broadband

I worked in an insurance firm years ago and the amount of complaints we got about Direct Debits put me off them for life!

LouLou

My mum has told me she got a call from BT a while ago and they said if you "pay online" by setting up an online account (which I do) you avoid the Payment Charges. Not sure if she's been told the wrong thing.

Also, this quote from here is very interesting http://www.thisismoney.co.uk/bbphone/article.html?in_article_id=429448&in_page_id=1 (mentioned in another thread):

"An expert at one of Britain's biggest banks believes it does not cost utilities companies anything extra to process these Paypoint transactions than it does to process a direct debit. He said: 'Somewhere along the line these transactions have to be audited - and it's the same process for either transaction. They will argue that it's the risk involved of those who don't pay by direct debit missing their payment. But if that is the case, then they should just increase late bill payment fines.'"

normanmark

Old news, DD's work fine & offer much more payment protection than any other payment method.

LouLou

It's not "old news" to me, I wasn't told about it until I queried it, it is basically a charge by stealth. I've paid my bills for over a decade via paper bill, and later when I got Broadband, online and paper-free. I've always been on time, so why should I have to pay extra? Where's my freedom of choice to pay how I wish? If I had a bad payment record I'd accept being penalised.

And I'm sure their more elderly customers have no idea too. I'd be interested to know if anyone has a response to the above quote saying that it doesn't cost anything extra to process Paypoint transactions versus Direct Debits.

And Direct Debits are not foolproof, I should know, I worked in a department that dealt solely with complaints about them!!

gt94sss2

LouLou wrote: »

It's not "old news" to me, I wasn't told about it until I queried it, it is basically a charge by stealth. I've paid my bills for over a decade via paper bill, and later when I got Broadband, online and paper-free. I've always been on time, so why should I have to pay extra? Where's my freedom of choice to pay how I wish? If I had a bad payment record I'd accept being penalised.

And I'm sure their more elderly customers have no idea too. I'd be interested to know if anyone has a response to the above quote saying that it doesn't cost anything extra to process Paypoint transactions versus Direct Debits.

BT have always (i.e. for at least 10/15 years) given a discount for paying by direct debit - they just display it on the bills differently now. When they introduced this change they widely publicised it and in fact, I though you weren't supposed to be able to sign up for 'paper free' billing without agreeing to pay by direct debit.

That quote is also definitely wrong - paying by any other method costs a company more than paying by direct debit. In fact I think that paying by Paypoint or via the Post Office are the two most expensive ways to pay.

Regards
Sunil

LouLou

Thanks for the helpful and polite response g94sss2, ahem.

I knew about the £1 monthly discount for Direct Debit when it was first introduced. I pay my bill partially by payment card and pay the remainder with my Maestro when I get the email for the bill; I doubt it would cost them much to process that.

I'm going to phone BT on my mum's behalf and find out if "paying online" stops her incurring the Payment Charges. I get the feeling she's been told the wrong thing.

I'm definitely paper free and definitely not direct debit

gt94sss2

LouLou wrote: »

I'm definitely paper free and definitely not direct debit

I know some people here avoid the payment charge by signing up to a direct debit with BT and then, as soon as a bill is produced, pay in full by some other method (debit card/payment card) - this means a direct debit request isn't made by BT but due to the fact their systems show you have a direct debit - no payment charges are currently charged..

Regards
Sunil

LouLou

I read through the thread where people were paying off their whole bill via Payment Card, while still opting for Direct Debit, even though there's zero funds to be taken out. It doesn't really apply to me now I'm moving over to TalkTalk next month, but it's a good idea. I'll mention it to my mum.

KimYeovil

A single quarterly Pay Point or Post Office payment does not cost £4.50 more than three direct debit payments. But that is not the justification - direct debit payers are just 'more reliable'. The extra £8.25 you pay per quarter is to pay for bad debts.

At least, in British Telecom's favour, unlike with the utility companies, you do have control of your direct debit and are able to change the amount of your monthly payment online.

And no, paying online does not stop the payment charges - it is only when you pay by direct debit.