BT increases charges

From 1 May 2007, BT will charge an extra £4.50 per quarter to customers who pay by cash or cheque. Late payment fees will also rise from £5 to £7.50.

Karen Darby, founder of SimplySwitch.com, the price comparison and switching service, comments: “Raising the late payment charge and introducing a ‘non-direct debit’ fee on the same day is a bold move by BT, a provider that’s already one of the UK’s most expensive. When British Gas announced plans for a £5 late payment fee earlier this year, it met with a huge consumer backlash that forced it to do a u-turn. BT’s latest penalties are likely to prove equally unpopular and will undoubtedly push many customers away.

“Unfortunately, instead of rewarding customers who switch to direct debit, BT has elected to penalise those that don’t. This presents a problem to the millions of customers who mistrust the direct debit system or do not hold bank accounts, usually the elderly and vulnerable who can least afford to pay extra.

“Around a quarter of BT’s customers, about 5.5 million, currently pay by cash or cheque. Unless there’s a mass switch-over to direct debit, BT could stand to make up to £24.75 million per quarter. That’s almost £100 million per year, a figure that will grow even higher when BT’s late payment ‘earnings’ are taken into account.

“Switching phone companies is now quick and easy. It doesn’t involve changing phone number or having a new phone line installed. If customers are unhappy with these new charges, they should see what’s available elsewhere and switch suppliers.”