Being charged for paying by direct debit

lletom

Hi there,
I pay an annual service charge to the property management company who look after our estate, the cost covers maintenance, repairs, etc.

This morning I received a letter to advise that if I want to continue paying by Direct Debit, I will now be charged an additional £24 p.a.

in order to ensure the considerable monthly administration costs required to comply with the Direct Debit guarantee are covered

Is this fair and legal? I'm thinking here of The Consumer Rights (Payment Surcharges) Regulations 2012

The only other option would be to pay the lump of sum of approx £200 (in advance each year).

I've never heard of a charge being made for the use of Direct Debit on this grounds. Has anyone else?

neilmcl

I believe there is a small charge, which varies depending on the provider, for the company to collect via Direct Debit so them passing this on to you is not wholly unreasonable.

glentoran99

lletom wrote: »

Hi there,
I pay an annual service charge to the property management company who look after our estate, the cost covers maintenance, repairs, etc.

This morning I received a letter to advise that if I want to continue paying by Direct Debit, I will now be charged an additional £24 p.a.

Is this fair and legal? I'm thinking here of The Consumer Rights (Payment Surcharges) Regulations 2012

The only other option would be to pay the lump of sum of approx £200 (in advance each year).

I've never heard of a charge being made for the use of Direct Debit on this grounds. Has anyone else?

~Its usually phrased as "discount for paying in full"

dj1471

Surely you can simply pay by monthly standing order instead?

photome

I pay for a season ticket by monthly direct debit. A few years ago the club started charging £5 per year for the convenience, still great value and I don't think it's unlawful

Caz3121

is this not similar to car insurance? Different quotes depending if paying annual up front payment or monthly dd (monthly being higher)

glentoran99

Caz3121 wrote: »

is this not similar to car insurance? Different quotes depending if paying annual up front payment or monthly dd (monthly being higher)

That would be different as you are getting a loan and paying interest

IAmWales

I'm guessing this is Peverel, or whatever they're called this week. We've had the same letter. If so ring up and kick up a fuss, I've done so for an elderly neighbour and got the charge cancelled. Doesn't affect me as I pay every six months.

Leaseholders already pay (at least) £100 a year for the management charge, twice as much if there is an estate charge too. This charge is for their admin costs. Any admin relating to the DD should be covered by this. It's pure profiteering.

neilmcl

Caz3121 wrote: »

is this not similar to car insurance? Different quotes depending if paying annual up front payment or monthly dd (monthly being higher)

It's nothing like car insurance. The reason paying monthly for car insurance is higher because there's interest to pay on what is essentially a loan.

unholyangel

Currently, it is legal for them to pass on the costs (although its due to be changed in january 2018 due to an EU directive...which is the same place the majority of our rights/protection come from).

However, the Consumer Rights (Payment Surcharges) Regulations 2012 prohibit traders from charging fees that exceed the cost borne by the trader. There are exempt contracts but none of them apply in this scenario imo.

Further to that, this only applies to additional payment methods. Where the charge cannot be avoided, they need to incorporate it into the base price. So if a trader was selling online and accepted debit card and credit card, the debit card fee would need to be incorporated into the price but they could charge a surcharge for credit card (but only how much it costs them to process the payment by that method - they couldn't charge a 5% fee if its only costing them 0.6%).

So first things first, check your lease/tenancy/agreement with them and see if it makes any reference to payment. Whether the full amount is perhaps due and they informally allow you to pay it in instalments or whether it actually gives you the right to pay by instalments. If you have the right to pay by instalments and DD is the only way to do this, they need to incorporate the fees into their maintenance fee.

KeithP

Do the allow payment by bank transfer?
If so, that's one way to avoid the DD fee.

And if they do allow BT, then that becomes the base mentioned by Unholyangel and they can then charge for a DD payment.