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Pensioners punished in BT purge on cash
Last updated at 23:52pm on 06.02.07
Pensioners will be punished by BT if they pay their bills by cash or cheque
BT is introducing charges for £5.5million customers who pay their bills by cash or cheque.
The penalty, which will work out at £4.50 a quarter or £18 a year, will raise almost £100million annually.
It is also putting up its late payment charge by 50 per cent to £7.50 a time.
The firm wants more of its 13million customers to pay by direct debit.
Pensioners, who traditionally prefer to pay bills by cash or cheque at Post Offices, will fall foul of the charge.
Customers who do not have a bank account, perhaps because they have a poor credit history, will also suffer.
These two groups are among those least able to pay extra on their bills, particularly given sharp increases in other outgoings such as gas and electricity charges and council tax.
While the move will raise £100million a year for BT, it is offsetting the full impact of the charge by lowering the line rental for customers affected from £36 a quarter to £33.
However, the net effect will still be to boost the firm's annual income by more than £50million a year.
A BT spokesman said: 'The majority of people do have bank accounts now, so they can pay by direct debit.
"Before you got a discount for paying by direct debit...but we are now introducing a surcharge for people who don't pay by direct debit because it costs us more to process those payments."
On the late payment charge, BT said: "There has been no change to the late payment charge for almost two and a half years. After reviewing the costs, those actually incurred were found to be higher than first estimated. A £7.50 charge would fully recover all the costs involved.
"The late payment charge is not aimed at people who can't pay or have financial difficulties, but at people who won't pay.
"BT will listen sympathetically to genuine cases of difficulty and help customers move to the most appropriate product for their needs.'
The changes, which come into effect in May, are buried in the small print of BT's latest customer update brochure.
Critics are angry at the move, particularly as BT's pre-tax profits soared by 17 per cent to £1.2billion in the first half of the current financial year.
Karen Darby, chief executive of the price comparison website, simplyswitch.com, said: "This is a slap in the face for millions of customers.
"In the past, the administration involved in dealing with
payments by cash and cheque has been considered a normal cost of business. Now they are transferring that cost to their customers.
"Customers should not be fined because they happen to favour one method of payment over another.
"Millions of people will be hit by this from all walks of life. However it will disproportionately affect the elderly and less well-off customers.'
She added: "It is disappointing that these new charges have been hidden away in the small print.
"BT and others are always very happy to shout about any reductions in charges from the rooftops, but there was no such high profile announcement to alert customers to the change."
Help the Aged policy manager, Kate Jopling, said: "These charges are significant, particularly for many pensioners who are on a low, fixed income.
"Many people find using cash and cheques a much easier way to plan, particularly when you have limited resources.
"We can see that there is a general drive to encourage people to switch to payment by direct debit. But a lot of people are not comfortable or familiar with this.
"They don't like the idea that money can suddenly disappear from their bank account, sometimes without them seeing a bill.
"We would prefer a system to encourage people to use direct debits with both financial incentives and support, rather than penalties.
"This is too much stick and not enough carrot."
Reader views (2)
Here's a sample of the latest views published.
The main reason I don't pay BT by direct debit is because of the enormous profits they already make. Why should they have the interest on my money when I can? Under their direct debit scheme, where you effectively pay in advance, and all year round, that is is what happens. I think I'll be among many who finally make the break with this proposal.
- Claire Knight, London
What are the alternatives to BT? Another monopoly that rips off its clientele left and right. As with the banks, huge profits yet still wanting to squeeze out some more pennies for its shareholders. Since, as usual, the new rip-off was going to be hidden away in the small print, it's good to have news sites like this one to advise on the countless rip-offs of big business.
- Phil Jones, London UK
