Penalties for not paying by direct debit

[buzby]

My supplier is VM and has folded previously, so I've a track record with them (also their charge, when annualised is much higher - and difficult to justify).

 

With BT, there is the problem of this earlier action (not a precedent) where a woman solicitor no less took them to court, and lost. Allowing them to crow about the charges are justified. She has not posted on any of the consumer sites to explain what happened or give guidance to her strategy, the last I heard she was 'considering an appeal' which sounded good at the time but has now timed out.

 

The only information I heard was the judge rejected her claim because BT had TOLD her they would make the charge, and as they had done so she could not reject it. No looking into the fact her original T&C did not have this, or that she did not specifically agree. Again, no mention of the justification of the cost in real terms (did it REALLY cost £4.50pq to accept a payment other than by DD? BT didn't supply info to sustain this position).

 

Faced with this - the press aren't interested in the battle because of the previous loss by a customer and assume all will go the same way. I have to admit, it is easier to challenge VM's greed at £60pa than BT's £18!

[mick094m]

I have been having this problem with VM for a long time and have all sorts of problems with their billing system and have tried in vain to point out the faults with the system they operate,so I thought of trying a cunning plan to go onto their forum and make a bland statement in the hope that someone would slip up and divulge some information that may be of some help in addressing the problems .this is what happened.

I pointed out that "I have pointed out to them (VM) that paying at a "paypoint" isthe same as DIRECT DEBIT as thatgoes through the banks BACS system therefor takes the same time..................this is the reply

Quote from Benmcr( mega poster)..I am always right........except when I am not .his descriptor on the forum.

His Reply: It is not the same.A dd payment is appliedfor through BACS 3 days before the due date.A paypoint payment takes up to 3 working days from the day you pay it So unless you paid your bill via paypoint 3 days before your due date Virgin would not get it at the same time.

paying via p/point a couple of days before your next billis printed means you are paying after your due date,which means you are paying late.( end of quote).

So wahat I would like to know if this forum agrees with what I understand from this if I receive my bill with a due date of for arguements sake the 4th of the month as the due date and pay it on the first of the month that this is exactly the same as a ddand therefor they are charging me illegally for as they put it not paying by DD.It will be interesting to see what this forum members think of this after having to put up with the ridicule from that site,s forum I think it was worth it in the end as I think if this person (who is always right) his words is correct then it gives me more ammunition to throw at VM when I next contact them which will be when someone on here confirms my thoughts and interpretation of his statement

[buzby]

This guy really hasn't a clue of the issues involved. However you are also wrong in your assertion that PAypoint is the same as BACS. It isn't.

 

PP is a cash handling service operated by a commercial company. The network runs using its own terminals and is not directly connected with the banking system. They make their money (and the retailers) from percentages creamed off the person paying. PP then collect the various payments and distribute them in a consolidated payment to the creditor(s). For every £100 paid in, the creditor only received £94-95 (depends on transaction volume). The payment process may take 3 days, but that is because PP is also benefiting from the interest the money generates whilst it is awaiting allocation.

 

As for supporting VMs adherence to payment dates, he doesn't appear to mention why it takes VM nearly 7 days to print off and send a bill. My billing date is 14th, but I never get a bill before 20th/21st, and this is expected to be paid by 2nd before penalties apply. I mat reluctantly accept their contention that I have supposedly nearly 3 weeks to pay my bill, but as they sit on it for a week anyway, that delay is their responsibility and I should as a consequence only have to pay 21 days after the RECEIPT of their bill, not their fixed date that doesn't take account of the delays in getting the bills out.

[mick094m]

Thanks for the information I wanted to clarify the differences between pp and dd and was just trying to gain as much info as possible,incidently I too have an issue of the issueing of VM bills as I recntly received a letter on a day before the bank holiday weekend that gave me five days to pay the outstanding amount and when I pointed out to them that out of the five days there were two bank holidays and a saturday and sunday nad surely they should do as the banks do and work on the five working days .......still awaiting a reply,but it is as you say they are only in it to glean as much from us customers at the least amount of work.in other words past masters of the rip off schemes,as regards DD that is another story as well as paying over the phone by debit or credit card that is my main reason for not subscribibg to either of them as in the past they took two amounts of £100 out of my account on the same day and caused havoc with the other DD I have and not only that though they admitted the mistake got no where offered a paltry sum and I refused what I do now is every time I have aproblem with them I reduce my service and internet,problem is had that many I am now on the lowest BB and the bare minimum package as I have had so many problems so next is dump VM completely but where do you go the are all tarred with the same brush,until someone takes them to task and sorts them out.

[MARTIN3030]

Some interesting points.

I am still going to tie in the non DD admin fee charges with my claim against VM.

All things considered I have taken into account the case that was lost.

BT produced figures that swayed things in their favour-I am not convinced that VM will disclose.In fact in my first claim Telewest/NTL was more than adamant that under no circumstances would they be prepared to disclose details of costs ...on commercially sensitive grounds.

Secondly I am wondering if BT were aware that the claimant was a lawyer or practising legal person..and so pulled out more stops.

It was a lost case in the County Court so no precedent there-tho I am sure VM Will have watched this closely.In any event their 15.00 per quarter still exceeds BTs when calculated over 3 months.

Coupled with the fact that any position from the OFT and other regulators is not set in stone.

Given that they are unable to recover their costs of defending any action in the County Court its also more costs for them

Like the banks even if they did want to defend the non DD admin fees...would they still risk defending part of the claim ? since their costs would still be the same if not more.

 

Additionally...VM are now offering a discount of 2.00 for e billing.Does this suggest that it costs them 2.00 to send out bills

No-it means more savings or profits for them...but thats another subject for debate.

Edited June 24, 2008 by MARTIN3030

[john]

Today had a long conversation with a lady quite high up at bt regarding my bill. Due to bts incompetence I was refunded a wrongly charged bill as a goodwill gesture. This has left my account in credit be quite a large amount for the last few months. On checking my bill, which states "account in credit, no payment required" I have been charged £1.50. I asked her about this and she said it was because I had no direct debit set up. I replied that I don't have to pay anything so why would i need a direct debit, my account is paid up for the foreseeable future. It doesn't matter, the computer will charge you for not having a direct debit every month even if you don't owe us anything.

 

I have posted this on mse where there are many BT supporters out there who advocate this charge as acceptable, fair and OK, so I askd them to post to justify and explain why the above is OK, as to me it is ludicrous. Their answer was that its me being unreasonable. OK, their opinion.

 

She also said that ofcom is looking into it, if so, can I claim these charges back out of principle? Thanks.

[ASIIndustries]

Hi john, i have the exact same problem with Virgin Media, but it is £5 per month rather than £1.50 & since i pay several months in advance by my own choice, but it gets worse as the account balance reduces around 3 weeks prior than it would be required, when they issue a statement!

 

Also i had response from Virgin Media that was in written form (recordable source for me as phoning them is not an option).

 

We have priced the costs of handling payments made by other methods rather than direct debit (people's time, etc.) and in fact it comes to more than £5.

[john]

Thank heaven someone agrees its a joke. Thought I was going crazy. How the hell do these companies get away with it?

[ASIIndustries]

Hi John, they get a way with it, because it is written within their T&C's!

 

OFT & OFCOM wont do a bean, because it is written within their T&C's and they tell you about it on your bill.

 

And if you query with your provider, they basically tell you, because it is written within their T&C's & so b o g o f f!

 

Also their T&C's is their equivelent of the law, however since it has not yet been tested within an upper court of law there is no predecent & it has not been decided if the fees are fair and legal!

 

Payments explained see post # 38.[/url]

Telewest/NTL/VirginMedia Have Been Naughty - The Consumer Forums

Edited June 26, 2008 by ASIIndustries

[buzby]

I replied that I don't have to pay anything so why would i need a direct debit, my account is paid up for the foreseeable future. It doesn't matter, the computer will charge you for not having a direct debit every month even if you don't owe us anything.

 

Your observation is well-fiunded, and this woman lawyer to lost her case against BT (and who disappeared without a trace) should have left well alone. This 'fine' for not having a DDM even when you don't owe them any money is the best defence against BTs actions.

 

Yes, OFCOM are consulting on this process and I raised this with them, so there still is hope that the practice will be outlawed and they'll either be forced to follow Sky's method (only charged when there is no credit balance to take a full payment), or be told they cannot have differential pricing - especially when BACS payment (home banking) cost the same as DDMs but leave the consumer in control.

[bidstermeister]

I wonder if anybody has used the angle that as you're sometimes paying upto 14 days in advance for a service you have yet to use (I'm using my VM account as an example here) - you are giving them your money early. Perhaps you could either pay 24hrs before the due date (or, on it to really irk them!) or say that if they want paying in advance, they'll have to compensate you for it (ie: wipe the non-DD charge).

 

Also, I wonder what consideration there is within a contract for a consumer to vary the terms - Naturally, the contract is generally more in favour of the provider so there must be a way for the consumer to vary them - Only fair innit ?!

[ASIIndustries]

Hi bidstermeister, if you mean VM want your cash in their bank account on the 12th of the month, but your service does not start until the 16th, well yes +7 days, but got late fee, +5, +3, +2 & =0.

 

As to the contract T&C's Consumer declaration yes i have been considering it for some time now, however i would prefer getting VM to amend their T&C's as the Consumer declaration would essentially nullify the UTCCR's!

 

Anyway i just received the VM's current T&C's today & already found 2 portions within less than 60 seconds so far that the Office of Fair Trading guidelines have deemed unfair terms!

 

Q: Transfer of agreement.

Basically VM have all the rights to transfer, but the consumer has none.

 

R: The law & how VM resolve your complaints.

1: These T&C's are governed by English law!

Edited June 26, 2008 by ASIIndustries

[buzby]

Consider that to work (modifying VMs contract) it would need to be done with their express agreement - usually at the time it is taken out. You could then cross out the clauses you disliked, and if VM accepted you as a customer, those clauses would not apply.

 

By contacting them subsequently, and saying you don't want those clauses, you would need to have their agreement in writing, and I very much doubt that's going to happen.

[meagain]

By contacting them subsequently, and saying you don't want those clauses, you would need to have their agreement in writing, and I very much doubt that's going to happen.

 

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.

[yourbank]

you are varying the contract giving them the required notice, is that right meagain?

 

(haven't seen you about for ages so nice to see a recognisable name, meagain )

[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]

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]

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]

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.

 

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.

Edited August 10, 2008 by feralcat2
spelling mistakes.

[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.)