Penalties for not paying by direct debit

[bidstermeister]

But what about the contract that says (for example): we may vary this contract from time to time by writing to you blah blah... - What about the consumer, have they then lost their right to vary, also ?

It seems that Virgin Media's is similar to this, on Company Terms and Conditions (On Cable) Section B 1.b states that As well as these terms and conditions, our services have other legal stuff which apply to the services and their use, as published by us on the Virgin Media website. These may be updated by us from time to time. Obviously a consumer cannot update their site to alter terms but it doesn't appear that we can full-stop - so is the contract un-fair ?

[buzby]

Originally Posted by meagain

All you need to do is serve them due notice of an impending change to the T&C, and if they don't cut you off they are bound to it. This is precisely the procedure laid down in the T&C for a change, and since it's not a "core term" (core terms are "you give us money, we give you cable") it must apply both ways - that is how contracts work.

No that's not how contracts work.

This is the real world and changes such as you describe whether material or cosmetic, require the agreement of both parties. As such, it is a re-negoriation, and the other party is not bound to accept it (on either side), this is why there is a break-out available to consumers when there is a change, they can terminate without penalty and the service ends.

When it comes to you wanting to modify the terms of the service contract, it must be by negotiation (not imposed) and the company is not obliged to agree to such a change. In my case, Sky refused my change and the account was closed.

Further, there is often a clause that notes that only a 'duly authorised officer' of the company has the authority to modify the stated T&C's, so sending a letter to Customer Services with your amendments will have no standing whatsoever.

[MK_One]

We took out a mobile contract just over 18 months ago, unfortunately it was for two years, with a company who subsequently went bust and were brought by a company known as GCI.

These guys really know how to charge, last month they changed the payment date from the beginning, to the end of the (previous) month. As a result the payment bounced, fortunately the Co-op were great about it. GCI however weren't £30 charge for missing a payment of £12! They would also make similar charges unless I paid by DD and they would happily take me to court to get it.

In the end I didn't pay because the charge was "secretly" dropped when I phoned to pay, the only reason I can think of is that they had so many complaints they dropped several charges.

I will still leave them in Nov when the contract comes up for renewal.

[heartopp]

Originally Posted by buzby

Having now paid Virgin Media £50 in non-DD charges, I set about contacting their acting CEO (Neil Berkett) to resolve the issue. My complaint was passed to their Executive Office staff to deal with and after a phone call, was advised politely, that the charges stand and that it was their company policy to uphold them.

Now, didn't somebody say they got a refund....?

I have just gotten a letter from VM telling me that becuase over the past year, they have credited, wait for it....... £340, and they they will no longer credit me anymore - lol

[buzby]

Originally Posted by MK_One

guys really know how to charge, last month they changed the payment date from the beginning, to the end of the (previous) month. As a result the payment bounced

Some clarifications worth noting: A DD cannot 'roll over' to a new date to a new account without you agreeing to a new mandate. If the account or trading name remained the SAME, then you have to be told of the change and be advised of the new date 10 days before it happens. This is covered by the DD guarantee - so would have been refunded in any case.

Originally Posted by MK_One

I will still leave them in Nov when the contract comes up for renewal.

This doesn't happen. and is a complete misunderstanding of the contract process. The contract will reach the end of its minimum term, which is quite a different proposition.

[feralcat2]

Hi, I am new to posting on this site, but have been following the debate in respect of penalty charges, namely payment handling & late payment charges. Currently I am in dispute with V/M and have refused to pay these charges until they provide express conformation showing I am actual liable for these charges. At no time did I agree to pay by D.D or pay any penalty charges, ' or whatever name they are called'.

I am an old Telewest customer with a service contract of indeterminable duration. (it rolled over year after year). As my dispute with V/M intensifies, I can foresee ligitation with V/M at some time in the future respect to the behaviour they endow, failure to correspondence, automated correspondence, phone calls that harbour on harassment at inconvenient times and no-one taking ownership of complaints.

To progress, can one or other of you 'legal eagles' out there qualify the 'legal defination of penalty' with respect to contractual charges within the remit of liquidated damages, and how does this imposition of billing and charges combined, apply in regard to services. Whilst I am familiar with some aspects of contractual law, I seek to establish the legal groundwork prior to entering the arena.

Further, V/M have issued a document called 'Customer Aquisition Policy,(explaination & guide) at 5.6 Direct Debit (quote) 'where an upfront payment is exempt on new accounts, it is 'compulsary' to set up a direct debit. (telewest customers please note.)

Secondly at 10.0 (Bill Payment) (quote) V/M admit they will accept a wide variety of payments (namely cheques, debit cards, bank cards ect ect.) however where-ever customers elect to pay by D.D. a monthly fee of £5 will be added. Also if accounts are not settled within 28 days of production, a late payment charge is added to the bill. (unquote)

I have 2 'issues of concern with this policy, 1, Compulsary D.D. and 2, the reciept of bill time line. My bill arrives approx 8/9 days late from date stated and currently V/M add the late payment onto the bill in advance of payment. This addition is I believe unlawful insofar as it is in advance of any wrong-doing.

Also, I have a major concern over the Compulsary D.D. account, this concern is finaancial, mainly over the £38 the bank penalty charge if the account is lacking in funds. Furthermore, I know of no other service organisation who insists on compulsary D.D. aaccounts just to recieve consumer services (perhaps Sky maybe.)

It is clear from their 'Customer Aquisition document' that V/M have unbridled preference for D.D. payments, but Ireland, & France (and some other EU States I think ?) have outlawed these surcharges. 5 years ago it was possible for the customer to stipulate how he wished to pay, today, that process seems to have been abandoned in the UK to the detrement of consumers.

However, back to basics, If someone could identfy the legal defination of 'PENALTY' (or the relevant case law precident as applicable to services,) such, with another bow, that I can apply it to my armoury, and go prepaired to use it when the time is right. Thanks.

[maybelline]

VM have returned 'payment handling charges' if you press them nicely but it will not show up as that but via some other part of your service

[feralcat2]

Hi Maybelline,
Thank you for your fast response, I have found V/M to be 'a most agrivating company to deal with insofar as they refuse or fail to answer correspondence other than by automated mail-shots. I've had enough of 'Sorry to hear your unhappy, ect ect, where the issues 'drags on' for months.

I have refused outright to pay payment handling charges and late payment charges. Each time I settle a bill, I issue them with a conformation of why payment is with-held and the relevant reasons for my actions. This process has been going on for some time. All that appears to happen is that someone at V/M calls at a really inconvenient time, discusses the issues and life goes on. It is me that is getting pee'd off at the continual hassle.

Anyway, I am getting prepared to do battle and have a few arrows in my quiver to sharpen, One imminent problem arises in that, V/M do not correspond, nor it appears, is there anyone in that company that takes ownership of the complaint. They appear to allow matters to drift rather than resolve issues. However, I take your point about the conveluted way they have of resolving issues. Nice to know they have a sense of humour.

[maybelline]

how about standing order - although I imagine they will not accept this either but might be worth offering it and finding out why it is unacceptable, payment is after payment. I too find it incredible that companies are insisting on DD's in this way, especially re the returned DD charges, folk would not be so reluctant to get hit with these if they were nearer the true cost, maybe £2 ish isnt it. the situation with paying in advance and then being disconnected while half way through your months usage is most alarming, just because the computer has generated the next bill and added it on? I guess voting with your feet is not always possible because true choice does not exist either.

[feralcat2]

Hi Maybelline
Standing Orders are just another banking instrument. Service providers prefer D.D's insofar as they are variable. As your service bill varies, Providers can demand the amount required irrespect of whether the bill is right or wrong. They expect you to be alertand inform them of any errors, albeit, they do not endeavour to compensate you for the hassle caused.

My dispute with V/M is much more straight-forward than standing orders. I simply do not wish to pay 'payment handling charges' or 'late payment charges'. I am capable of orgaiising my own financial affairs, where to me, these particular charges are a penalty for not having a bank account.

Whilst the Penalty arguement is straight forward in citing the penal code for wrong-doing, the opposing arguement is more akin to addressing the provisions of The Price Indications( Method of Payment) Regulations 1991 (SI 199)

Under those regulations, Service Providers have carte-blanche authority to include additional surcharges into their contractual terms and conditions.

OFCOM acknowledges those regulations and admit that it is competetion between Service Providers that controls prices rather than consumer choice. Having a valid choice is a pipe-dream, inasmuch as all Service Providers impose surcharges within the terms and conditions of supply and argue passionately that listing the related price structure is a benefit for the consumer. I fail to see the logic in this arguement. Most people are quite capable of handling their own financial affairs and don't need a bank to organise payment and charge them for doing so.

I make my own arrangements for paying bills and admit I am a little richer for it.

Service Providers have admitted to OFCOM that the surcharges (ie payment handling & late payment charges ) are basically a tool to combat bad debt. In that sense, those charges are not a fair and reasonable amount for administration cost purposes only, but are a further means to increase revenue. In his Consultation Document, OFCOM has recommended that Service Providers will need to change their terms and conditions to reflect administration costs and not bad debt bounty collection.

Thus, is it any wonder that companies impose surcharges, usuall on vunerable persons and those on low income benefits ect, who are struggling to make ends meet. Those people have no interest in banks and banking charges, they have no money to bank. Yet Service Providers require those people to pay for their inability to collect debts or payment for service.

Payment collection charges are a fuctional addition to the basic service price. It is collated within the price structure for service. Therein, charging twice for the same functionality is akin to fraudulent trading, It would have been more beneficial to everyone had OFCOM looked at price rather than competition, as a means of resolving the mountain of complaints in regard to surcharges.

(Please note, I understand that those charges are outlawed both in Ireland and in France.)

[Dave123456]

Hi Chap and chapesses. I sent Orange the form about the unfair charges for non direct debit and have just recieved this email back from them !. Does this mean go away we are going to charge you what we want to charge you or am I just thick?

Thank you for your email dated 23 August addressed to the Executive Office,
regarding charges when bills are not paid by Direct Debit.

We introduced the charge for payment by means other than Direct Debit in
2005. This charge genuinely reflects the costs incurred in processing
payments and is no way a penalty charge. I refer you to the recent statement
issued by the Trading's Standards Institute confirming that these charges are
lawful:-

"Trading Standards officers have received a number of complaints regarding
the extra charge levied by some companies on consumers who pay other than by
Direct Debit. These charges are lawful. The Price Indications (Method of
Payment) Regulations 1991 allow differential pricing provided the indication
of the higher price is expressed clearly, unambiguously, and that it's easily
identifiable by a consumer as applying to the goods, services, accommodation
or facilities concerned, and given prominently and legibly."

I am sorry to hear that you are unhappy about the charge and feel that it is
unfair. I trust I have explained the reason why the charge is applied.

If you would like to discuss this issue further please call me on 0870
8700862 between the hours of 09:00 and 17:30 Tuesday to Thursday. I trust
this is acceptable.

Yours sincerely



Pauline Roberts
Executive Office


what do you think guy`s? cos I think that it just gives them the right to charge what they want when they want to charge it!

[Jeff2000]

Originally Posted by Dave123456

Hi Chap and chapesses. I sent Orange the form about the unfair charges for non direct debit and have just recieved this email back from them !. Does this mean go away we are going to charge you what we want to charge you or am I just thick?

Thank you for your email dated 23 August addressed to the Executive Office,
regarding charges when bills are not paid by Direct Debit.

We introduced the charge for payment by means other than Direct Debit in
2005. This charge genuinely reflects the costs incurred in processing
payments and is no way a penalty charge. I refer you to the recent statement
issued by the Trading's Standards Institute confirming that these charges are
lawful:-

"Trading Standards officers have received a number of complaints regarding
the extra charge levied by some companies on consumers who pay other than by
Direct Debit. These charges are lawful. The Price Indications (Method of
Payment) Regulations 1991 allow differential pricing provided the indication
of the higher price is expressed clearly, unambiguously, and that it's easily
identifiable by a consumer as applying to the goods, services, accommodation
or facilities concerned, and given prominently and legibly."

I am sorry to hear that you are unhappy about the charge and feel that it is
unfair. I trust I have explained the reason why the charge is applied.

If you would like to discuss this issue further please call me on 0870
8700862 between the hours of 09:00 and 17:30 Tuesday to Thursday. I trust
this is acceptable.

Yours sincerely



Pauline Roberts
Executive Office


what do you think guy`s? cos I think that it just gives them the right to charge what they want when they want to charge it!

Hi,


Sounds like a fob off to me.

If the fees charged genuinely reflects their costs to process payments, ask them to prove it! They won't of course, so unfortunately you would have the choice of taking them to Court or put up with it!


Regards, Jeff.

[feralcat2]

to jeff & dave 123456
The views expressed above seem a little juvinile for in the Warsall County Court in Case No: 7WJ 02610 (Bond (nee Ferihough) -v- British Telecom) the Court has already ruled that the payment of £4-50 is not a penalty insofar as it is a core term of the service contract.

As I understand Mrs Bond's arguement was, that the imposed £4-50 non DD charge was unfair within the meaning of UTCCR 1998 and likewise if the charge was removed it would not effect any term or condition of the contract in any way. The Judge stated, that the £4-50 charge was a core term and as such was not subject to the assessment of fairness under UTCCR1998, because matters which are core terms relating to price and service are not assessable, providing, that due notice has been given to the consumer that there is going to be a change in either price or service.

British Telecom argued that non-direct debit charges, minimum contract periods and charges for itemised billing were core terms, because they are essential to the bargain which consumers will assess when making a decision to contract.

B/T submits that late payment charges, payment failure charges and restoring service charges are non-core terms.

Whilst this case does not set any legal precedent, it is nevertheless a signpost of things to come. It highlights the relevance that the Courts take in the on-going development of contract law. The Court did not consider the charge was a penalty, far from it, it considered the charge as an essential core term of the contract.

Equally, Ofcom considers non dd charge a legitmate business expense, and call payments by DD a discount. Their only arguement is that, non dd payments should not be used to penalize consumers who make payments on time rather than lumping them as bad debtors,

My understanding of contract law subscribes,.. that when a customer sign's on the dotted line, those terms and conditions as agreed rendered both parties liable to that agreement and both parties were responsible for adhering and complying to the terms agreed.

However, in respect of V/M, at no time did I sign a document with them agreeing to make payment for service by means of direct debit, yet they invoke charge against me and abjectly refuse to provide any express or direct evidence showing that I am liability for the charges imposed.

On the other hand, The Regulator Ofcom is charged with a duty to ensure fairness is prominent within the telecom service industry. To date, the behaviour and remonstrations within the current review raises the question of how fairness be achieved if Service Providers are permitted to notify customers (by generic means) of price or service changes when the consumers did not agree to that particular charge when making a decision to contract in the first place.

It appears that as the law stands now, neither the Courts or the Regulator is protecting consumers from Service Providers employing illicit tattics by way policy charges to boost profit margins. Just another hussle/ confidence trick for the hard pressed consumer to worry about.

[meagain]

Originally Posted by feralcat2

British Telecom argued that non-direct debit charges, minimum contract periods and charges for itemised billing were core terms, because they are essential to the bargain which consumers will assess when making a decision to contract.

This statement by BT presupposes that all of these items are fair, and so cannot be used in deciding whether or not they are core terms. It's saying "these are core terms because they are core terms".

"Core terms" as I understand it refers to the basic substance of the contract in the services provided by both parties, and as I recall it is defined this way in the Regulations (though I would advise anyone to check) - BT provide telecomms services, but they cannot argue that they will provide "payment handling services" (I prefer those of our respective banks, thank you), and would consider the idea that receiving payment from the customer is itself a service to be utterly nonsensical.

Next time I deal with Virgin, I shall be striking out a few pieces and attaching it to the signed contract.

Of course, you can argue that because their contract stipulates that you pay by DD the fee effectively amounts to a penalty for breach of that contract, but that way lies madness.

[feralcat2]

Hi Meagain,
I agree with you that because a you refuse to pay by DD, you incur a penalty, and that is madness, but that is the current state of affairs in respect to paying telecomunication billing.

As stated above, I do not have an express contract with V/M (being a telewest customer) wherein V/M (on take-over) imposed a non-DD charge and abjectly refuse's to provide evidence of liability. I cannot be liable to V/M if I have not signed a service contract stipulating payment by DD. Further, I have written inexcess of 37 letters to them and only recieve generic replies which do not address the issues at hand.

In terms of contractual obligations, I understand a basic contract has 2 parts, 'the substance and the effects, namely the core terms and non-core terms.'

The Substance, is those matters material to the service supplied together with the unbridled cost of the service,.. namely, The Bargain.

The Effects,.. are those matters that equates to purpose,.. wherein, access, permissions, responsibility, dispute/complaint, means of payment, suspention of service for non-payment ect,.. are central to the service but do not impede or impose upon The Bargain as agreed between supplier and customer.

The substance and effects are to all intents and purposes , two sides of the same coin. Also, in regard to those DD charges, I understand tha the telecommunications industry is the only utility industry that imposes this particular charge on its customers.

Having painstakingly read the responses published by Ofcom in respect of DD charging, the only persons to agree in favour of