Campaign to ditch the non-DD surcharge?

G6JPG

There has recently been some movement on the subject of unreasonable charges for use of credit (and even debit) cards - mainly, I suspect, aimed at budget airlines. The ruling seems to be that they are now not allowed to charge much more than it costs them to provide the service - from what I understand, around 2% for credit cards and 50p for debit cards, per transaction.

But a much more deserving case for similar attention is the extra charge for not using direct debit: of course, the companies call it a "direct debit discount", or words to that effect, but what it is is really a charge for anyone not using DD.

(I wanted a more general forum - this applies to lots of companies other than energy companies, e. g. utilities - but the forum structure here won't let me.)

Fair enough, let them pass on if it costs them more to take payment by other means - cash at branches (costs of staff, and security), cheques, and so on. But I usually pay online (with debit/credit card), as soon as I get the bill: I can't see how that can cost them significantly more than if I paid by direct debit - but it does.

(And even if there was some justification - even though I don't accept that there is - I see no reason why it has to be proportional to the amount involved, rather than a flat fee: but in the matter of energy at least, it is: different tariffs.)

Of course, I know the real reason they're so keen on DD, but I've never heard any of them admit to that.

daveyjp

I pay off straight away using debit card and get a discount for doing so.

Nada666

So what you are wanting is a massive increase to the cheapest tariffs. That may be a fair enough consequence but not one many would welcome.

Of course there could be more honest and complex pricing models - introduce paying interest on outstanding balances, introduce fees where direct debit customers do not keep their account in credit, more ruthless application of late payment charges, force those who use prepayment meters to face much higher charges and pay their own costs and pay for their own additional meter visits.

There are lots of charges that could be introduced. I doubt it would be welcome.

Nada666

Scottish Power have already been savaged and stopped from doing this - they used to have bonuses for paying bills on time similar to direct debit discounts. The regulators intervened and banned Scottish Power from behaving decently.

Cardew

G6JPG wrote: »

Fair enough, let them pass on if it costs them more to take payment by other means - cash at branches (costs of staff, and security), cheques, and so on. But I usually pay online (with debit/credit card), as soon as I get the bill: I can't see how that can cost them significantly more than if I paid by direct debit - but it does.

You haven't mentioned that people pay DD monthly and bills are normally raised quarterly, sometimes 6 monthly; so that helps with cash flow.

You may pay on-line as soon as you get the bill, but many don't and have turned delaying their payment to an art form. Some faced with a quarterly bill of many £hundreds simply haven't the means to pay. Cue Debt Collection Agencies, pre-pay meters fitted, with debt paid off at £10 a week.

My daughter had a temporary job with a Utility company between university degrees and said there was a huge section just dealing with late payers - sending red reminders, dealing with agencies acting on behalf of the defaulting customers etc.

Perhaps you have grounds for arguing that you should get some discount for paying on time?

Virtually every company encourages payment by DD and gives a financial incentive or financial penalty to achieve that aim; they can't all be wrong.

Buzby

All be wrong? For bullying consumers into giving up financial control of their bank account?

I don't play their game - I pay around £100pa more for not having DD's but I know exactly what is in my accounts and there are no surprises. That's worth £100 to me along with my financial control.

Andy_WSM

Buzby wrote: »

All be wrong? For bullying consumers into giving up financial control of their bank account?

I don't play their game - I pay around £100pa more for not having DD's but I know exactly what is in my accounts and there are no surprises. That's worth £100 to me along with my financial control.

How does setting up a DD mean you lose financial control? That's what the DD guarantee scheme is for - not that I've ever had to claim for a dodgy DD and every single bill is paid this way and has been for the last 15 years or more.

Cardew

Buzby wrote: »

All be wrong? For bullying consumers into giving up financial control of their bank account?

I don't play their game - I pay around £100pa more for not having DD's but I know exactly what is in my accounts and there are no surprises. That's worth £100 to me along with my financial control.

I cannot understand why you think you are losing 'financial control'.

I know exactly how much money will be taken from my bank, and if the amount changes I am informed in advance - and can dispute if I wish.

Even if there were no inducements for paying by DD I would still use this method of payment for the convenience of not having to write cheques, phone or pay on the internet. In fact with my metered water charges I pay by DD without any discount given.

G6JPG

{Before I start this post: would you look after this £5 note for me, by putting it with the other money in your wallet?}

I pay off straight away using debit card and get a discount for doing so.

So do I; however, I think you'll find that we're still on a higher tariff for not paying by DD. The "discount" for immediate payment is nowhere near the difference.

So what you are wanting is a massive increase to the cheapest tariffs.

No, just a decrease in the non-DD tariffs to bring them into line. It wouldn't be a massive increase to pay for it - assuming the majority are on DD, which I guess they are since even MSE pushes them.

Scottish Power have already been savaged and stopped from doing this - they used to have bonuses for paying bills on time similar to direct debit discounts. The regulators intervened and banned Scottish Power from behaving decently.

I'd be interested to know the regulators' justification - do you?

You may pay on-line as soon as you get the bill, but many don't and have turned delaying their payment to an art form.

So do early-payment rewards, late-payment charges, or whatever.

Buzby wrote: »

All be wrong? For bullying consumers into giving up financial control of their bank account?

I don't play their game - I pay around £100pa more for not having DD's but I know exactly what is in my accounts and there are no surprises. That's worth £100 to me along with my financial control.

You and me both. But I resent it! Along with the implication - in advertisements and so on - that I'm stuck in the dark ages by not accepting direct debit, as if I don't understand the concept; I do, which is why I want nothing to do with it!

Anyway: the principle has been started by the banning of unrealistic charges for use of credit/debit cards (as I said originally, I suspect mainly aimed at some airlines).

{Right. Now give me your wallet - I'll give it back, honest; I'm only going to take out the fiver I asked you to look after for me at the start of this post.}

Cardew

[QUOTE=G6JPG;61028705

{Right. Now give me your wallet - I'll give it back, honest; I'm only going to take out the fiver I asked you to look after for me at the start of this post.}[/QUOTE]

Sorry don't have any money in my wallet.

However I will give you permission to ask my bank for £5. If you want more just give me plenty of notice and then ask the bank for the increased amount.

Please don't bother continually asking me for money - my bank deals with such mundane matters.;)

Richie-from-the-Boro

G6JPG wrote: »

~~~ snip ~~~

I usually pay online (with debit/credit card), as soon as I get the bill

- how often do you get 'the' paper bill ?
- annual / quarterly / monthly ?