From The TimesFebruary 08, 2007

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BT penalises cash customers
LONDON BT is pushing up charges by £4.50 per quarter for customers who pay by cash or cheque, as opposed to direct debit.

The increase will be offset by a drop in line rental of £3 a quarter for non-direct-debit customers. The telecoms company is also putting up its late-payment charge from £5 to £7.50.

More than five million customers will be affected by the increases when the changes come into force on May 1, a BT spokesman said.

Non-direct-debit customers who use both BT landlines and broadband services will have their rental charge cut by 50p per month.

The spokesman said: “BT’s charges are quite modest compared to other companies.”

Karen Darby, founder of the price comparison and switching website SimplySwitch.com, said the new charges could rake in up to £99 million a year for BT.

End Quote

That article is similar to that which was published on thisislondon.co.uk 2 days ago and is what I'd describe as 'sensationalist journalism'.

Although the facts are generally correct, the way they are presented (at first sight, the increase appears to be £4.50/quarter when, in fact, it's really £1.50/quarter because it's offset by the supposed 'drop in line rental of £3 a quarter'), is designed to catch the eye and not to explain the whole truth.

At the moment, paying BT residential line rental by DD qualifies for a £1/month discount. In other words, line rental costs £11/month (£33/quarter) instead of £12/month (£36/quarter).

From 1/5/07, that £11/month 'discounted' price becomes the standard price - but those not paying by DD will be charged £1.50/month extra (i.e.  £12.50/month).

As those not paying by DD did not previously receive the £1/month discount and were already paying £12/month, the increase is actually 50p/month (£1.50/quarter or £6 per annum).

The increase in the cost of line rental (which only applies to those not paying by DD) is about 4%.  The Retail Prices Index rise in December 2006 was 4.4%.

Yes, pensioners and others on low incomes will be hardest hit but, when compared with last year's gas, electricity and council tax rises, and to the alleged rate of inflation, it's not that bad.

Heinz,

I am sorry to have to disagree, but since this is in fact a situation of binary option the Times' statement of differential is correct. You either pay the DD price per month or you have to pay the cash/cheque price. The differential is thus £4.50. There is no other option available.

dorf wrote on Feb 8^th, 2007 at 11:29am:

Heinz, I am sorry to have to disagree, but since this is in fact a situation of binary option the Times' statement of differential is correct. You either pay the DD price per month or you have to pay the cash/cheque price. The differential is thus £4.50. There is no other option available.

dorf while you are correct on the bald facts the point is that what BT are actually doing is pushing up the charge for paying by cash by another £1.50 per quarter but the difference is now £4.50 per quarter for direct debit vs cash rather than £3 as it was before.  It seems to me monstrous that if people manage to pay on time in cash that they should be surcharged in this way. Only people who pay late should be hit with the charges to ensure that they pay on time.

The key issue though is how BT line rental can possibly be £37.50 per quarter or £150 a year for a humble phone line when my gas and electricity supplies from www.equipower.co.uk levy £5.50 and £11 per quarter standing charge, although I forget which is for gas and which for electricity.  These extraordinary charges just to have the phone line turned on to make a call cannot be justified for BT's chronic old copper wire and System X network.  It seems existing customers are being milked to pay for the costs of a so called 21st Century Network they may never use as they may use WiMax instead by then for phone and broadband as it will be much cheaper than ripoff BT.  Given that you have to pay again for broadband at £12 per month upwards I don't see how these very high charges can be justified.

Exactly NGM'sG,

That's the reality of it. It is yet another quite monstrous move by BT and quite the opposite of all previous established UK billing protocol. The truth is that it is yet another move to increase profit by doing nothing, particularly by improving cash flow velocity so as to increase present value.

Like everything else BT does these days, it is all about exploiting their loyal customers as much as possible. Although they still have a virtual monopoly and are thus in a position to compete most effectively with their economies of scale, they are such a badly managed enterprise that they do not have the corporate ability to organise such strategy!

NGMsGhost
when my gas and electricity supplies from www.equipower.co.uk levy £5.50 and £11 per quarter standing charge,

Equipower/Equigas,(Ebico), do not have standing charges!

derrick wrote on Feb 8^th, 2007 at 12:42pm:

NGMsGhost when my gas and electricity supplies from www.equipower.co.uk levy £5.50 and £11 per quarter standing charge, Equipower/Equigas,(Ebico), do not have standing charges!

Derrick I think I was thinking of Powergen and their Energy Online tarriff, that I was with beforehand for 18 months.  You are right about Equipower/Ebico.  Mind you Southern Electric who administer the Ebico tariffs for them do also give me a direct debit payment discount that they are not supposed to be doing for Ebico customers.  But who I am I to complain about this generosity on their part.

The fact that you can have a property you hardly ever use and pay almost no standing charge for gas and electricity and have to pay a monstrous one for a phone line surely says why the BT standing charge is so ridiculous.

NGMsGhost wrote on Feb 8^th, 2007 at 3:11pm:

derrick wrote on Feb 8th, 2007 at 12:42pm: NGMsGhost when my gas and electricity supplies from www.equipower.co.uk levy £5.50 and £11 per quarter standing charge, Equipower/Equigas,(Ebico), do not have standing charges! Derrick I think I was thinking of Powergen and their Energy Online tarriff, that I was with beforehand for 18 months.  You are right about Equipower/Ebico.  Mind you Southern Electric who administer the Ebico tariffs for them do also give me a direct debit order discount that they are not supposed to be doing for Ebico customers.  But who I am I to complain about this generosity on their part. The fact that you can have a property you hardly ever use and pay almost no standing charge for gas and electricity and have to pay a monstrous one for a phone line surely says why the BT standing charge is so ridiculous.

It is my understanding that whilst there appears to be a discount for DD, there actually isn't, it is just the way they have to do a work round, there is something on their site about it, but at the end of the day all customers od Ebico pay the same price, there is a thread about it on MSE, I will try and find it.

Totally agree about the BT standing charge

My bill says that I’m getting a discount for paying by Direct Debit – but I thought the whole point was that everyone paid the same on EQUIGAS and EQUIPOWER?

In some circumstances billing procedures automatically deduct a percentage from the bill for Direct Debit payment. In these circumstances the work-around we use is to ADD a percentage to the bill first so that when the deduction is made it comes back to the correct EQUIGAS or EQUIPOWER bill. Sorry, we know it sounds a bit daft, but that’s computer systems for you! We are working to remove this oddity.

The above is from here:-  http://www.ebico.co.uk/en/open/pages/faqen.php

derrick wrote on Feb 8^th, 2007 at 3:29pm:

My bill says that I’m getting a discount for paying by Direct Debit – but I thought the whole point was that everyone paid the same on EQUIGAS and EQUIPOWER? In some circumstances billing procedures automatically deduct a percentage from the bill for Direct Debit payment. In these circumstances the work-around we use is to ADD a percentage to the bill first so that when the deduction is made it comes back to the correct EQUIGAS or EQUIPOWER bill. Sorry, we know it sounds a bit daft, but that’s computer systems for you! We are working to remove this oddity. The above is from here:-  http://www.ebico.co.uk/en/open/pages/faqen.php

I did actually tell them that there was a direct debit discount on the bill that I didn't think should be there (now I check the email I sent them), along with my complaint about their 0845 number and telling them precisely why it was not local rate.

My own complaint about the 0845, along perhaps with others seems to have led directly to their subsequent introduction of an 0800 number in its place.

I think they are somewhat foolish though to let Southern use their branding equally on all the correspondence.  The normal arrangement would be to have everything branded as Equipower and get the Southern call centre staff to answer as Equipower.  Under their current arrangements they look like little more than an affinity brand of Southern Electric.  However I suppose the same kind of half and half relationship does exist on my MBNA Conran and University of Exeter Visa cards and on my Bank of Scotland BAA Worldcard Visa and my RBS Shell Visa card.

Its a little unfortunate too that they can't persuade Southern Electric to rewrite their software to simply not apply the DD discount to customers on the Equipower tariff.

Oh well, better than the charge for NTL:Telewest though. Still sucks.

Does anyone know what the standard rate for non DD in the UK telecoms market is?

Source: Telegraph

Cash used to be king, but now we pay for paying up

By Jeff Randall  TELEGRAPH  09/02/2007

Quote .....

Have you noticed how expensive it is to spend money these days?

I'm not talking about the price of items in the shops. No, I'm referring to the cost of paying for them.

As if affording life's necessities were not taxing enough, more and more of us are being charged by suppliers of goods and services for their "burden" of accepting our funds.

It wasn't always like this. Not long ago, customers were required to pay for only what they bought. Call me an old fogey, but it was a system of which I approved. It was fair; it worked.

Shopkeepers provided us with groceries; we parted with our dosh. Deal done. Today, it's different. Many businesses have worked out that they can charge us simply for trading with them — and get away with it.

We are increasingly expected to pay a bit extra for the privilege of paying. Never mind the things we're buying, the transaction itself has a price tag. Money for nothing. Ka-ching!

Look at BT. The telephony giant has introduced charges for customers who pay by cash or cheque. Excuse me, fined (for that's what it is) for paying by cash? Yes, £4.50 a quarter.

Not satisfied with annual profits of £2 billion, BT's bosses reckon they can generate another £100 million a year in revenues by chiselling customers who have the temerity to pay their bills promptly in legal tender. Currency bearing the Queen's image is not what it was.

BT's goal is to cajole as many people as possible to sign for direct debits. This helps push up profits, by cutting down administration costs. Nothing wrong with that, except that instead of rewarding those who do fill in direct debit forms, it is turning the screw on those who don't.

Dealing with cash and cheques used to be considered part and parcel of everyday commerce. No more. BT, it seems, views the cash customer as a form of shoplifter: someone who is, in effect, taking money out of the business; someone whose uneconomical habits must be stamped out.

I wonder how BT would react if its workforce applied a similar policy?

Memo to Ben Verwaayen, BT chief executive, from bolshie shop steward: "Dear boss, our members don't like being paid by bank transfer. They much prefer readies. From now on all non-cash wages will carry a surcharge of £5 an hour. All the best, Fred Kite".

BT, of course, is not alone in demanding that you pay for paying. Have you ever tried booking a flight online?

After ploughing through the carrier's information boxes, you'll reach the section on payment details. It's at this point that you're informed by Easyjet (Ryanair is just as bad) that if your credit card is Visa or Mastercard, the ticket will cost an extra £4.95.

And watch your wallet if you intend to do anything really rash, such as take two bags with you. One piece of luggage is fine, but then Easyjet charges you for each additional bag. It's £5 per item if you pay online, but if you're vulgar enough to offer cash at the airport, the price jumps to £10.

Mind you, by comparison with British Airways, Easyjet seems positively charitable. BA has just slapped £240 on the price of long-haul travel for all passengers who check in two bags.

It's worse than being a matador: charges are coming from all directions. We're charged if we pay for our airline ticket on a credit card. We're charged extra for taking our clothes with us. And if we opt to pay the luggage surcharge in cash, we're charged even more.

I told you, this spending lark is a costly business. We must hope that BT sticks to phones and doesn't start an airline. The charges would be electric.

It's troubling. Nearly three million Britons do not have a current account, meaning that one in 12 households is unable to pay domestic bills via a bank transfer. For them, avoiding BT's penalty is not an option.

Whatever happened to the maxim cash is king? I'll tell you what happened. Like Charles I, cash has been dethroned and beheaded by those who seek to change our lives to suit their own financial interests.

In a world where knowledge is power, many businesses despise cash because it's anonymous. When you pay by cash, you don't reveal your name, address, family details, bank account or credit-card number.

Cash has no smell. When you pay by folding stuff, you leave the store with no way of being traced. You are gone, free from invasion by "special offers".

Cash is the junk-mailer's worst nightmare. It spells the end of what promotions managers call "relationship marketing".

I once tried to buy a cigarette box for a friend's birthday. Before the shop assistant started wrapping it up, she pulled out a thick receipt book, heavily layered with carbon paper, and said, "I need your name and address".

I scowled. "No you don't, I'm paying by cash."

She was undeterred. "Sorry, it's our policy. You'll have to give me your name and address. For our records."

By now, I felt like making a sizeable donation to the Civil Liberties Trust. "Look lady, take the cash or I'm walking out."

She shrugged her shoulders. I walked out.

A coffee shop in Washington DC, called Snap, has gone the whole hog. It has stopped accepting cash of any kind. Not just $100 bills. No greenbacks at all. No quarters, no n

.......  
A coffee shop in Washington DC, called Snap, has gone the whole hog. It has stopped accepting cash of any kind. Not just $100 bills. No greenbacks at all. No quarters, no nickels, no dimes. Nuthin'.

It's possibly a well-run business. But I won't be going there. Because — how can I put this without appearing venal? — I love cash. Not in a mammonistic way. Cash does for me what Aloysius, the teddy bear, did for Sebastian Flyte.

I do have cards. More than I need. But there's no plastic money yet invented that surpasses the comforting feel of a large wedge.

Perhaps it's a generational thing, but I find the prospect of life without cash horribly unappealing. I mean, how would football managers receive their bungs? You can't tip the hotel doorman with American Express and the tooth fairy doesn't possess a cheque book.

In the US, some Right-wing nutters and evangelical Christians fear that a cashless society will enable totalitarian forces to cut off our access to essential resources, rendering us powerless to prevent eternal darkness.

They believe that a totally electronic economy invites the devil's work, a reference to the Bible's Book of Revelation which warns that, without real money, "no man might buy or sell, save that he had the mark, or the name of the beast".

My preference for fivers and tenners is rather more prosaic. As Woody Allen nearly said, "cash can't bring you happiness, but it comes attached to a better class of problem."

End quote

Great article.  I'm sure this guy could do an equally good piece on the con of being forced to queue at exorbitant rates on the phone to speak to a company that has failed to supply goods or services in the manner that you legitimately expected them to.

We must feed him with the appropriate info.

darkstar wrote on Feb 8^th, 2007 at 6:25pm:

Oh well, better than the charge for NTL:Telewest though. Still sucks. Does anyone know what the standard rate for non DD in the UK telecoms market is?

Anyone? Just from what I can see £1.50 is high average on this (I checked at work when it was slow ;)). In fact it seems odd that a 50p a month (12.5p a week) addition can be such a huge deal. I mean guys get a grip. Look around you, yeah its crappy that they feel the need to add it on, but next to £3 and £5 a month its nothing! Some people on this forum seem to put it on a level with global walming, genocide and the poor state of medical research in the UK.

darkstar wrote on Feb 10^th, 2007 at 1:25am:

Anyone? Just from what I can see £1.50 is high average on this (I checked at work when it was slow ;)). In fact it seems odd that a 50p a month (12.5p a week) addition can be such a huge deal. I mean guys get a grip. Look around you, yeah its crappy that they feel the need to add it on, but next to £3 and £5 a month its nothing! Some people on this forum seem to put it on a level with global walming, genocide and the poor state of medical research in the UK.

I don't see why people who pay by cash or cheque on time should be charged any extra as they don't impose any extra admin costs and certainly not the level of admin costs that are being charged here, whatever may be current bank fees for handling cash and cheques.  And why should the poorest members of society be penalised just for not having a bank account if they always pay up on time?

It should only be the cash payers who use it is an excuse to not pay at all or weeks or months late who should be hit with the penalty fees to make sure they have every possible incentive to pay up on time.

Your excuse seems to be that other firms also have this rip too so that makes it all right for BT to do it too.  But wasn't that how the whole disgusting con based 084/7 calls industry came into being? ::) :o :'(

Thing being that if its not on a DD then companies are more likely to lose money due to late payments. Thats why companies add the charge, to sweeten the deal for people to go onto DD. Im not saying its right mind, but I do understand why it makes sense.

And my point is that everyones going ape over BTs going to £1.50, yet when the NTL:Telewest/Virgin went from £4 to £5 there was barely a flutter. It just seems to be double standards as certain people have a grudge against BT.
But thanks again for on yet another topic attampting to put words into my mouth.

darkstar wrote on Feb 10^th, 2007 at 10:20am:

Thing being that if its not on a DD then companies are more likely to lose money due to late payments. Thats why companies add the charge, to sweeten the deal for people to go onto DD. Im not saying its right mind, but I do understand why it makes sense.

Then why not just charge the customers who pay late extra and not penalise those who choose to use cash or cheque but always pay on time. :-? :-/

Despite your claim to be of independent mind from BT you actually do seem to endorse almost everything they do.  Are you sure they don't put something in the tea that you call centre workers drink  ;) :P

Heheh, maybe in the coffee. It certainly doesnt taste like anything I have ever gotten from a shop. Thats for sure!

But I agree on the charges thing, penalise the people who dont pay on time by a higher ammount. It should all even out in the end.

As far as BT goes, as I have said I certainly know their bad points, but it just seems odd that people choose to target BT Retail over something when other companies are doing the same thing but far, far worse.

Like I say, I can see both the view of the companies as to why they do it, and the views of the customers who dont like it. Im just trying to play a balanced view.

darkstar wrote on Feb 10^th, 2007 at 11:46am:

Like I say, I can see both the view of the companies as to why they do it, and the views of the customers who dont like it. Im just trying to play a balanced view.

Are you the same darkstar as in the discussion forum at www.thinkbroadband.com (or adslguide.org.uk as it used to be called)?

Afraid not, I can however be found on several pro wrestling and MMA forums. The things we do to pass teh time, both hurt people and pretend to hurt people.  ;D