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UPDATE: BT Sued Over Unfair Cash Payment Charges

Posted: 28th Mar, 2008 By: MarkJ
UPDATE: Fernihough is reported to have lost her case against BT.

Ros Fernihough, a 62 year old solicitor, is suing BT over the additional charges it levies against customers that do not pay by Direct Debit. Referring to it as an "administration cost", BT charges £4.50 extra per quarter for those not using DD.

Naturally Fernihough, a BT customer since 1964, has been angered by the move because she pays her bill over the counter through a local bank using cash:

"As soon BT wrote to me as a customer, saying I had to pay £4.50 I wrote back saying I'm not paying £4.50 and I'm not paying by direct debit. Please refund my money or I'll sue you."

"Now, if BT wants to charge people for collecting the money, i.e. 15p for an electronic transaction, 25p for a cheque, fine, nobody would dispute that. But what about the profit they're making? We're not here to help shareholders, we're not here to subsidise bad debtors. It cannot be right, for the old and the sick; somebody has to stand up for those people."

Almost half, 43%, of BT's 13m customers don't use direct debit, preferring to pay by cheque, cash or electronic transfer. That means they're charged £4.50 extra per quarter on their bill, or £18 a year, generating annual revenues for the company of around £100m. BT isn't the only company that does this - Virgin Media for example, charges £60 a year.

Ofcom is currently consulting on a number of proposals to tackle "penalty" charges like this; meanwhile Fernihough will be busy making her case at Walsall County Court today. Typically there is nothing wrong with admin charges so long as the value is fair. More @ Channel4.
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