BT “charges” for cheques – the next “penalty charge” retreat?

So another comment pings in on the “credit card companies can’t charge for penalty fees”. (And what’s happened to the OFT’s case against the banks? Haven’t heard about that for a bit. Or at all.)

And now, the BT “you haven’t paid by direct debit for we’re charging you £4.50” fee. The Telegraph is the first with the story, and Radio 4’s PM followed up (except that – I suspect – so many people wanted to comment on it that the blog exploded).

From the Telegraph:

Mrs Fernihough, like 5.5 million fellow BT customers, chooses not to pay by direct debit. As a result her monthly line rental costs £13.25 a month, compared to £11.75 a month.

She said: “On a £10 note, it says quite clearly ‘I promise to pay the bearer on demand the sum of 10 pounds’, not ’10 pounds, plus a £1.50 handling fee’. This is not a spurious claim. BT’s position won’t wash.”

The grandmother of seven said she has paid her telephone bill in cash ever since she became a BT customer in 1964. She goes to the local branch of her bank in Sutton Coldfield and either pays in notes and coins or by transferring cash electronically to BT’s account.

Since May last year, BT has levied a £1.50 handling charge on cash or cheques; the company insists, however, that direct debit customers have always enjoyed a discount on their line rental, but it is not made clear on their bills.

As Eddie Mair got from her, her case rests on our familiar friend – the Unfair Terms and Contracts act (or whatever it’s called). BT can’t impose these charges if you don’t agree to them. It shouldn’t really be allowed to impose them by inertia either, I don’t think.

And here’s the question: I pay my bill by electronic transfer, not cheque. How is that any different from direct debit? Oh, yes, BT doesn’t get to take an unlimited amount from my account. Tell me why that’s a bad thing, where customers keep control of their own bank accounts and don’t open themselves up to identity theft through any insecurity in BT’s systems?

I think BT may be on weak ground here and that it’s going to have to make a big payback. The case comes up next month at at Walsall County Court in front of District Judge Hearne. Google Alert for “Fernihough”…

(Afterthought: why does it matter in the least that this woman is a grandmother? Is her ability to reproduce and produce fertile children somehow important? Should it raise, or lower her in our esteem? It’s a classic example of irrelevant facts – like the worst of American newspaper reporting.)

(Double afterthought: surprised that none of the other nationals seems to have picked up on this. It’s a really good human interest/money story which affects virtually every reader, and she can’t be hard to find in the.. er.. phone book.)


  1. The ‘grandmother’ bit adds interest though, doesn’t it? Paints the picture. The older lady, stubbornly refusing to be swept along with the times.

  2. Perhaps if BT (and others) had the whit to show DD payers getting a discount from a list price rather than putting a surcharge on the so-called discounted price they might get less flak and more takers.

  3. Charles

    Thursday 14 February 2008 at 5:53 pm

    @paul: except try it the other way around: what if they’d called her “childless spinster…”: would that add interest? I think giving the age is enough in some ways.

    @bill: except why is dd so much more profitable for BT? Surely if it’s about getting the right money, then all forms of transfer are OK – electronic, cash or cheque are the same in the sense that money is delivered. (There’s not even a handling charge on electronic transfer to BT.) It’s all about the *convenience* to BT, and that it can be sure about its cash flow. It’s trying to ease its cash flow by making us pay for the fact that it struggles. I think a lot of businesses would like to be in the position where they could charge people for paying in some other form – but they know they can’t. (So retail doesn’t charge you for paying by credit or debit card vs cash, even though it costs them more.)

    BT’s not going to come out of this well, and its smart cash flow protection move might even backfire. More on PM tonight (Thurs), apparently.

  4. Been trying to get an explanation from BT on the breakdowmn of the charge to no avail. Did anyone notice the excuse on literature that beacuse they had set up a new division BT Payment Services Ltd who supposedly have setup the charge. Our contract is NOT with BT Payment Services Ltd.

    If The charge was for processing the payment, the payment would be the same as for one month payment as for one quarter payment (not three times). I suspect this may breach Description of Services.

    Any payment made electronically, or even paid over the counter at a bank (cash or cheque) is received the same by BT as if it was by Direct Debit – ELECTRONICALLY!

    A lot of business even small companies also pay people by BACS schemes, so this now forces companies to have arbitrary amounts non-verified.

    Direct Debit Guarantee is actually a way to obviate the company making mistakes from any responsibilty to paying any consequential losses to you when they make a mistake. So if they make a mistake (payment taken early, multiple times, wrong amounts are common mistakes), then you have to spend time running round all the other people because of their mistake, so they do NOT have to pay you for your time, calls, letters, repairs to credit history.

  5. I challenged BT on this too saying it was unfair and immoral. I contacted BT after an extraordinary amount of time on the
    phone (and their business is communications!)Oftel, the complaints company who were totally disinterested and all claimed
    nothing wrong with what they did.
    So I told BT complaints department to sue me for the charges as I would not pay and I got a REFUND OF MY CHARGES.
    The crazy thing was each time I disputed the charges they took so long replying to my correspondence that I was then charged
    late payment fees for underpaying the bill.
    This lady gets my vote and I would be pround to stand beside her in protest.
    Well done Eddie Mair for airing the issue!!!!
    If anybody wants to air the time it takes to get to speak to a human at BT contact me please.

  6. I have lost track of how much I pay not to use direct debit – which I think is highly dangerous for a freelance. (And not so great for anyone else who wants to keep control of their finances.) I actually hadn’t noticed BT’s charge. Virgin Media I think is charging me £5 a month in “payment handling charge”. Vodafone takes a couple. At least £250 a year for just those three.


  7. “And now, the BT “you haven’t paid by direct debit for we’re charging you £4.50″ fee.”

    Seems like Ofcom plans to issue guidance:

    “Charges for paying bills by cash or cheque rather than by Direct Debit
    When providers advertise prices, they must make clear what any extra charges for paying by cash or cheque will be.

    “If a provider does not make the extra charges prominent and transparent enough that consumers see them as part of the main price under the contract, then the charges must reflect direct costs only. They should only include the provider’s extra costs of collecting normal payments and not an opportunity to collect further revenue.

    “However, where the extra charges are prominent and transparent enough, normal competition – and not regulation – will provide price discipline on behalf of consumers. Customers will then have all the information that they need to know which provider to choose.


    Ofcom is seeking views on the draft guidance. The consultation is published at and the closing date for responses is 8 May 2008. Ofcom expects to publish the final guidance in autumn 2008.

  8. I’m working in USA for 3 weeks. Last week BT left 3 messages on my answerphone to which I wasn’t able to respond.Yesterday they cut off supply. When my wife contacted them they said I hadn’t returned their calls. All bills are payed to date except for THEIR charge for accepting MY money.
    I wonder when supermarkets will add the charge for paying in cash at the checkout.

  9. Payment Processing Fees

    I eventually wrote to Sir Michael Rake (Chairman) personally but of course received nothing in reply except another bill for the accumulated fees I have consitently refused to pay. I’ll stick to my guns though and persist in deducting these fees as I pay each bill, but I would be interested to hear others experience in this respect. My Understanding of contract law requires both parties who have entered into a contract to agree to any change in the terms of that contract. Am I wrong? Is the law “a ass, a idiot” as Mr Bumble put it?

  10. Hello to all people who are refusing to give in to BT’s payment charges and are deducting the £4.50 Plus VAT from your quartely bills. BT uses Barclays Bank for payment processing. Just look at Barclay business published charges at; and you’ll find it costs 23p per cheque transaction. Therefore, IMHO under the fair trading laws BT cannot and will not be able to justify a £4.50 plus VAT charge as the line rental cost already includes a fee for late payments. Hence BT is charging twice for the same processing! If everyone gangs up together and sends 2 cheques to BT for their quartley payment, such that one covers the cost of the line rental and calls only with VAT added, and another purely for payment charge, then stop the cheque for payment charge, it will cost BT £8.00 per stopped cheque. That will make BT wince, stop BT bullying its customers and give power back to the consumer!!

  11. I complained about the £4:50 stating that I pay by visa on their billing site. Surprise! surprise! this month the site states it can not validate my card. Criminals!

  12. Hello there,
    I have had a continuing battle with B.T over the payment processing fee of £4.50,
    and have witheld the amount from my bills for the last year, explaining why in many letters to them….eventually I recieved a few standard letters extolling the vertues of direct debit…and also a late payment fine of £7.00 (for not paying the processing fee) Feeling I was getting nowhere and fearing a mounting pile of fines I have moved telecomm companies. (in doing so I encountered great problems as B.T. left equipment on the line which was not compatable with the new companies equipment….leaving me without a phone line for 14 days)
    I am now being chased for the final amount of P.P and late payment fee…with threats of debt collecting agencies…. any ideas.
    kind regards Ruth

  13. Charles

    Saturday 14 June 2008 at 11:14 pm

    @Ruth – to be honest, simplest just to pay their money. You’ve left them so you have no hold over them – can’t threaten to take your business elsewhere. A court upheld BT’s right to charge this amount, and as you’re not in a strong position over it I think it’s quicker to cut your losses, and let someone else fight the battle.

  14. Belatedly for anyone in Ruth’s predicament: I was in the same situation. I succeeded in getting BT to reverse the ‘late payment’ fee on the basis that the amount (penalty charges) was in dispute. The agent said it was indeed their mistake. I then got a letter confirming the credit, but it said that it was a “once in a lifeltime gesture of goodwill” instead of their mistake. I called and wrote to them to set the record straight, just to be on the safe side for future reference. But I did get them to reverse the charge :-) Persistence and solidarity pays!

  15. can any body advise of a).a good ‘e’address to contact the CEO of BT and the contact of any person who has had some sort of sucsess getting sence from this organasation.Many thanks,NICK.`

  16. 2011 now and the “levy” on non direct debit customers who pay BT by cheque is still going on. How can this kind of discrimination be legal? Given the hard times that so many are facing in this country, DD is not a realistic payment option for a lot of people, not least those on low or irregular pay. If you don’t have enough money in your account you get clobbered twice ; by BT and by your bank. Time for a fairer deal?

  17. It is about time people got rid of their apathy and actually COMPLAINED about things instead of simply paying up. We in this house do not pay BT by direct debit either. And think of this; on top of the fact that BT takes your money directly from your bank account, they also want you to go without paper statements! Unless you go online and check your statement then you’ll not know what you’ve been charged! So in essence, a person is giving up all control over the whole issue and allowing BT (and any other utility) to do exactly as they please.
    Utterly foolish but typical of today’s British who are too lazy to pay their bills themselves. As a result they fall prey to the “we’ll do everything for you” brigade. I have a relative who pays his electricity by direct debit, a set amount every month; he has absolutely no idea how much he has overpaid and can’t check it because he hasn’t got Internet.Absolutely bloody ludicrous, but I’m afraid the real culprits in all this are people themselves. Not the likes of you and I, but those out there who just meekly sign the DD chit and then switch their brain-cell onto something else.
    Judging by the comments made by authorities, it seems we have lost this battle; but if people still do nothing then mission-creep will continue into every corner of our lives until EVERYONE is paying EVERYTHING by DD, including the elderly; the battle will have been permanently lost and our rights to have choice will have been annihilated. Corporations are controlling our lives more and more every day and people are just letting them do it. WHY?

  18. There is a way of not having to pay this £4.50 I Read in a magazine (Saga) I think that if you pay directly into BT Bank
    at Alliance & Leicester and just pay the bill(less £4.50) BT can do nothing about this. Although I have lost the original
    letter and will try to get some back dated copies (2007) and post a note on the result.

Comments are closed.