Form letter for direct debit surcharge complaints

In an earlier contribution to this discussion,
Stephen Wray <[email protected]> wrote:

> "Paul Harris" <[email protected]> wrote in message
> news:[email protected]...
>> In message <[email protected]>, Roger Mills
>> <[email protected]> writes
>>> Why should *I* pay for *your* refusal to pay be DD?
>>
>> You shouldn't.
>>
>>> Let's be clear about this. If BT are prevented from giving a DD
>>> discount, the price for DD payers will go *up* - it won't come down
>>> for non-DD payers.
>>
>> They are not giving a DD discount, they are charging those who do
>> not pay by DD an additional charge. The problem is that the charge
>> is not relative to the cost of collection. If BT charged an
>> additional sum that reflected the processing cost, say 50p, then
>> they would have no case to answer. Charging £4.50 is profiteering
>> and is a penalty charge which in my opinion is illegal. It will be
>> interesting to see if they get away with it but my gut feel is that
>> they won't.
>
> Lets look at the actual facts
>
> Current Prices per month including VAT
>
> DD/MPP price £11
> Non DD/MPP price £12
>
> Currently get a discount of £1 per month for paying by DD
> Alternatively currently get a £1 surcharge for not paying by DD
>
> New prices
> DD/MPP price £11
> Non DD/MPP £12.50
>
> So get a discount of £1.50 per month for paying by DD
> Alternatively currently get a £1.50 surcharge for not paying by DD
>
> Lets get it straight that this is not a new charge.
>
> If you are getting charged less for paying by DD/MPP then you are
> getting a discount/ by the same principle if you don't pay by DD/MPP
> you pay extra WHAT IS THE DIFFERENCE????
>
> Stephen


My point precisely! I can't understand why there is suddenly an outcry about
this now - when the general principle of giving a discount for DD was
established several years ago.
--
Cheers,
Roger
______
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---

› See More: Form letter for direct debit surcharge complaints

>
> Lets look at the actual facts
>
> Current Prices per month including VAT
>
> DD/MPP price £11
> Non DD/MPP price £12
>
> Currently get a discount of £1 per month for paying by DD
> Alternatively currently get a £1 surcharge for not paying by DD
>
> New prices
> DD/MPP price £11
> Non DD/MPP £12.50
>
> So get a discount of £1.50 per month for paying by DD
> Alternatively currently get a £1.50 surcharge for not paying by DD
>
> Lets get it straight that this is not a new charge.
>

Yes it is, I was not charged before for using non direct debit.

DD customers had a discount now they dont.

I know the payment still give sthem a discount but the wording is they dont.

In an earlier contribution to this discussion,
It's Me <[email protected]> wrote:

>>
>> Lets get it straight that this is not a new charge.
>>
>
> Yes it is, I was not charged before for using non direct debit.
>
> DD customers had a discount now they dont.
>
> I know the payment still gives them a discount but the wording is
> they dont.


OK, so the *wording* has changed but the *effect* hasn't. You *were* charged
more for not using DD because you didn't get the DD discount.

So, on what grounds are you beefing about a small *wording* change?
--
Cheers,
Roger
______
Email address maintained for newsgroup use only, and not regularly
monitored.. Messages sent to it may not be read for several weeks.
PLEASE REPLY TO NEWSGROUP!

In message <[email protected]>, Stephen Wray
<[email protected]> writes
>
>Lets look at the actual facts
>
>Current Prices per month including VAT
>
>DD/MPP price £11
>Non DD/MPP price £12
>
>Currently get a discount of £1 per month for paying by DD
>Alternatively currently get a £1 surcharge for not paying by DD
>
>New prices
>DD/MPP price £11
>Non DD/MPP £12.50
>
>So get a discount of £1.50 per month for paying by DD
>Alternatively currently get a £1.50 surcharge for not paying by DD
>
>Lets get it straight that this is not a new charge.
>
>If you are getting charged less for paying by DD/MPP then you are getting a
>discount/ by the same principle if you don't pay by DD/MPP you pay extra
>WHAT IS THE DIFFERENCE????
>
The fact is that B.T. supply a service at a price and that is that, no
argument, you either take the service or go elsewhere. When you come to
pay for the service if you choose to pay by anything other than DD they
make an additional charge. If that charge reflects the cost of
collection then that would be reasonable but if it exceeds the cost of
collection then IMHO it is unreasonable.

If one pays quarterly the additional charge is £4.50 which does not
relate to the cost of processing the transaction and must therefore be a
penalty charge. How else would you describe it?
--
Paul Harris

>
> OK, so the *wording* has changed but the *effect* hasn't. You *were*
> charged more for not using DD because you didn't get the DD discount.
>
> So, on what grounds are you beefing about a small *wording* change?
> --
> Cheers,
> Roger
> ______
> Email address maintained for newsgroup use only, and not regularly
> monitored.. Messages sent to it may not be read for several weeks.
> PLEASE REPLY TO NEWSGROUP!
>

The main point is, it does not cost them £4.50.

I don't mind paying what it costs them but I dont want to be charged more
than the cost if I pay on time using some other method.

I pay monthly so if it did cost £4.50 I would have to pay it 12 times £4.50,
but I end up paying the same as a quartlet bill payer.

I am looking at switching all my calls away from BT using Primus Saver
Option 2 http://www.planet-talk.co.uk/SaverPr...x?source=saver then
when my line rental is a fixed amount I may go direct debit.

In message <[email protected]>, Roger Mills
<[email protected]> writes
>In an earlier contribution to this discussion,
>Paul Harris <[email protected]> wrote:
>
>>
>> In simple terms the charge does not reflect the cost incurred which
>> means that they are profiteering from the exercise. That means that
>> the question is do you think that charging £4.50 for a 50p cost is
>> fair and reasonable?
>
>Since when has *any* business been compelled to charge its customers what is
>fair and reasonable? Businesses price their products according to what the
>market will stand, and keep their costs as low as possible in order to
>maximise their margins. It was ever thus!
>
This is nothing to do with the price of the service, everyone pays the
same price for that. This is an additional charge that is being applied
to those who wish to pay by anything other than DD. If the additional
charge was passing on the cost of processing the transaction one could
argue that it was fair and reasonable. If it is more than the cost of
processing the transaction then it is a penalty charge for not paying by
their preferred method of payment which IMHO is not fair and reasonable.

>Are you saying that *every* aspect of BT's pricing should reflect their
>direct costs plus a small markup?

No, this has nothing whatsoever to do with the price that they charge
for the service. They price their product according to what the market
will pay and people can choose whether to take it or not. This is about
why it costs a customer more to pay by cash or cheque than it costs to
pay by DD. If you pay monthly they charge you an extra 1.50 per
transaction, if you pay quarterly they charge an extra 4.50 per
transaction. That sum does not reflect their costs it is just an
arbitrary figure that they impose on those who choose not to pay by DD
and as such it is therefore a penalty charge.
--
Paul Harris

In an earlier contribution to this discussion,
Paul Harris <[email protected]> wrote:

>
> If one pays quarterly the additional charge is £4.50 which does not
> relate to the cost of processing the transaction and must therefore
> be a penalty charge. How else would you describe it?

I would describe it as a marketing decision by BT.

They clearly *want* people to pay by DD because:
* it assures them of their revenue
* it avoids having to chase bad debts
* it ensures that payments are automatically matched to accounts, with no
manual intervention
* it reduces churn (inertia makes it less likely that customers will change
suppliers)

All of these things have a *value* to BT over and above the simple cost of
transaction processing. BT have taken the marketing decision that they want
the overwhelming majority of their customers to pay by DD and are prepared
to give a discount of £1.50 per month as an incentive to encourage this.
They have presumably concluded that anything less wouldn't encourage a
*sufficient* number of people to opt for DD.

In my view, this is a perfectly reasonable business decision - and it
matters not one jot how the size of the incentive relates to the marginal
cost of transaction processing. Customers still have a choice if they
*really* don't want to use DD.

Unlike you, I don't see a distinction between the way in which the service
itself is priced and the method of collection is priced. They are both an
integral part of BT's business model.

I should perhaps point out that I'm no apologist for BT. I pay them as
little as possible - just renting my line from them but making virtually all
my calls [1] via a third party operator - and getting my broadband from an
independent ISP [well they *were* before BT took them over!]. I'm happy to
pay by DD in return for a reasonable discount - but not happy to forego
paper bills for a miserly 25p per month - they'd have to do better than
that! But I simply don't understand why all this bleating has suddenly
started - egged on by Watchdog - about something which is a
long-established - and perfectly reasonable - practice.

[1] I ensure that I make just sufficient calls via BT to qualify for free
caller display and 1571.
--
Cheers,
Roger
______
Email address maintained for newsgroup use only, and not regularly
monitored.. Messages sent to it may not be read for several weeks.
PLEASE REPLY TO NEWSGROUP!

In an earlier contribution to this discussion,
It's Me <[email protected]> wrote:

>
> The main point is, it does not cost them £4.50.
>
It doesn't matter what it *costs* them. The point is that it's *worth* £1.50
per month to BT to have you pay by DD for a host of reasons (see my other
post). If it wasn't, they wouldn't offer this level of discount. [And let's
not get into an argument about whether it's a discount for DD or a surcharge
for non-DD - it's the *same* thing].

If it's worth £1.50 per month to you *not* to pay by DD, you are perfectly
free to choose to pay by some other means.
--
Cheers,
Roger
______
Email address maintained for newsgroup use only, and not regularly
monitored.. Messages sent to it may not be read for several weeks.
PLEASE REPLY TO NEWSGROUP!

In message <[email protected]>, Roger Mills
<[email protected]> writes

>It doesn't matter what it *costs* them. The point is that it's *worth* £1.50
>per month to BT to have you pay by DD for a host of reasons (see my other
>post).

I do understand the point you are making about the reasons for what they
are doing but that doesn't make it right to charge extra if you pay
cash.

> If it wasn't, they wouldn't offer this level of discount. [And let's
>not get into an argument about whether it's a discount for DD or a surcharge
>for non-DD - it's the *same* thing].

Whilst the effect is the same as this is an additional charge it isn't a
discount for those who pay by DD and there is a difference as it then
becomes a penalty charge. There were similar situations with the Banks
and Credit Card companies profiteering from imposing penalty charges
>
>If it's worth £1.50 per month to you *not* to pay by DD, you are perfectly
>free to choose to pay by some other means.

I know and alternatively I could move away from BT altogether but that
isn't really the point.
--
Paul Harris

In message <[email protected]>, Roger Mills
<[email protected]> writes
>In an earlier contribution to this discussion,
>Paul Harris <[email protected]> wrote:
>
>>
>> If one pays quarterly the additional charge is £4.50 which does not
>> relate to the cost of processing the transaction and must therefore
>> be a penalty charge. How else would you describe it?
>
>I would describe it as a marketing decision by BT.
>
I would agree.

>They clearly *want* people to pay by DD because:
>* it assures them of their revenue
>* it avoids having to chase bad debts
>* it ensures that payments are automatically matched to accounts, with no
>manual intervention
>* it reduces churn (inertia makes it less likely that customers will change
>suppliers)
>
All agreed.

>All of these things have a *value* to BT over and above the simple cost of
>transaction processing. BT have taken the marketing decision that they want
>the overwhelming majority of their customers to pay by DD and are prepared
>to give a discount of £1.50 per month as an incentive to encourage this.

No if it was a discount then we wouldn't be discussing this, the charge
for the service is the same to all and those who choose not to pay by DD
are charged extra. I know it is old ground but please don't keep
suggesting that there is a discount because even BT admit that it isn't.
>
>They have presumably concluded that anything less wouldn't encourage a
>*sufficient* number of people to opt for DD.
>
Probably and I would assume they worked out what the maximum that they
thought they could get away with was.

>In my view, this is a perfectly reasonable business decision - and it
>matters not one jot how the size of the incentive relates to the marginal
>cost of transaction processing. Customers still have a choice if they
>*really* don't want to use DD.
>
So if they decided next week that they would charge ten pounds for those
who pay by DD and fourteen pounds fifty for those who pay cash you would
be happy.

>Unlike you, I don't see a distinction between the way in which the service
>itself is priced and the method of collection is priced. They are both an
>integral part of BT's business model.
>
They are entitled to charge what they believe they can get away with for
the service that they provide but IMO should not be charging a premium
rate for collection of the money as it isn't part of the service that
they provide. I have no argument about them passing on the costs of
collection but I do object to them charging extra to make an additional
profit.


--
Paul Harris

"It's Me" <[email protected]> wrote in message
news:[email protected]

[snip]

> I don't mind paying what it costs them but I dont want to
> be charged more than the cost if I pay on time using some
> other method.

Sorry, but I very much *do* mind paying anything, never mind what it costs
them. The cost should be covered in the base price for the service, with
everybody paying the same, whatever means they choose to use to pay with.

Surcharge late payers by all means, but not those who pay on time by any
means. If I choose to pay in cash at the post office or my bank counter,
that's up to me.

Ivor

"Paul Harris" <[email protected]> wrote in message
news:[email protected]

[snip]

> The fact is that B.T. supply a service at a price and
> that is that, no argument, you either take the service or
> go elsewhere.

Yes exactly, at a price. How I choose to pay that price should be up to
me.

> When you come to pay for the service if
> you choose to pay by anything other than DD they make an
> additional charge. If that charge reflects the cost of
> collection then that would be reasonable

No it wouldn't, because you will never convince me that there is an extra
cost of collection.

> but if it exceeds the cost of collection then IMHO it is unreasonable.

It is unreasonable to charge any extra however the customer chooses to
pay. Tell me please, how does it cost extra to collect if I pay cash over
the counter at the post office or my bank branch than if I pay by DD..?
The transfer is still electronic, it just happens in a slightly different
way that does not, however you look at it, cost any extra.

Ivor

In an earlier contribution to this discussion,
Paul Harris <[email protected]> wrote:

>
> Whilst the effect is the same as this is an additional charge it
> isn't a discount for those who pay by DD and there is a difference as
> it then becomes a penalty charge. There were similar situations with
> the Banks and Credit Card companies profiteering from imposing
> penalty charges

It is not reasonable to compare this with penalty charges imposed by banks.

These bank charges are imposed because you have failed to comply with the
terms and conditions with which you have previously agreed - such as
exceeding your overdraft limit or failing to pay your credit card bill on
time. In a lot of cases, your failure could be purely accidental.

In the case of BT, the charges are up front - one price if you pay by DD, a
higher price if you don't. You choose. It's not something imposed after the
event because you failed to comply with T&Cs.
--
Cheers,
Roger
______
Email address maintained for newsgroup use only, and not regularly
monitored.. Messages sent to it may not be read for several weeks.
PLEASE REPLY TO NEWSGROUP!

In an earlier contribution to this discussion,
Paul Harris <[email protected]> wrote:

> In message <[email protected]>, Roger Mills
> <[email protected]> writes
>> In an earlier contribution to this discussion,
>> Paul Harris <[email protected]> wrote:
>>
>>>
>>> If one pays quarterly the additional charge is £4.50 which does not
>>> relate to the cost of processing the transaction and must therefore
>>> be a penalty charge. How else would you describe it?
>>
>> I would describe it as a marketing decision by BT.
>>
> I would agree.
>
>> They clearly *want* people to pay by DD because:
>> * it assures them of their revenue
>> * it avoids having to chase bad debts
>> * it ensures that payments are automatically matched to accounts,
>> with no manual intervention
>> * it reduces churn (inertia makes it less likely that customers will
>> change suppliers)
>>
> All agreed.
>
>> All of these things have a *value* to BT over and above the simple
>> cost of transaction processing. BT have taken the marketing decision
>> that they want the overwhelming majority of their customers to pay
>> by DD and are prepared to give a discount of £1.50 per month as an
>> incentive to encourage this.
>
> No if it was a discount then we wouldn't be discussing this, the
> charge for the service is the same to all and those who choose not to
> pay by DD are charged extra. I know it is old ground but please
> don't keep suggesting that there is a discount because even BT admit
> that it isn't.
>>
>> They have presumably concluded that anything less wouldn't encourage
>> a *sufficient* number of people to opt for DD.
>>
> Probably and I would assume they worked out what the maximum that they
> thought they could get away with was.
>
>> In my view, this is a perfectly reasonable business decision - and it
>> matters not one jot how the size of the incentive relates to the
>> marginal cost of transaction processing. Customers still have a
>> choice if they *really* don't want to use DD.
>>
> So if they decided next week that they would charge ten pounds for
> those who pay by DD and fourteen pounds fifty for those who pay cash
> you would be happy.
>
>> Unlike you, I don't see a distinction between the way in which the
>> service itself is priced and the method of collection is priced.
>> They are both an integral part of BT's business model.
>>
> They are entitled to charge what they believe they can get away with
> for the service that they provide but IMO should not be charging a
> premium rate for collection of the money as it isn't part of the
> service that they provide. I have no argument about them passing on
> the costs of collection but I do object to them charging extra to
> make an additional profit.



--
Cheers,
Roger
______
Email address maintained for newsgroup use only, and not regularly
monitored.. Messages sent to it may not be read for several weeks.
PLEASE REPLY TO NEWSGROUP!

"Roger Mills" <[email protected]> wrote in message
news:[email protected]

[snip]

> In the case of BT, the charges are up front - one price
> if you pay by DD, a higher price if you don't. You
> choose.

You may not be able to choose.

> It's not something imposed after the event
> because you failed to comply with T&Cs.

It's still unfair. Many people have a genuine reason for not wanting to
pay by DD. Some people (Shock..! Horror..!) don't even have a bank
account, so *can't* pay by DD. Why should someone be forced to pay extra
because they choose not to open a bank account..? You will never convince
me it costs more to pay by cash at the post office, the end result is the
same, they get their money on time.

Ivor