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British Telecom: Billing

Volume 458: debated on Monday 12 March 2007

To ask the Secretary of State for Trade and Industry if he will take steps to ensure that Ofcom investigates British Telecom's decision to introduce a penalty charge for customers who do not pay by direct debit. (125085)

I have raised the matter with the chief executive officer of the independent regulator, the Office of Communications (Ofcom). Ofcom is considering whether any of the suite of changes BT has recently made raise any regulatory issues.

For a number of years, BT has applied a price differential between customers who pay their accounts by direct debit and those who pay by other means. This reflects the higher processing and debt management costs associated with payments not made by direct debit. Such differentials are common practice among communications providers and utility service providers.

From 1 May 2007 BT is changing how it presents this differential from a discount for those customers paying by direct debit to a charge for those paying by other means. BT has combined this change with an increase of £6 a year in the charge (from £12 to £18). But the increased charge will not apply to special tariff schemes for vulnerable customers provided under the Universal Service Obligation.

To ask the Secretary of State for Trade and Industry what representations he has received on BT's decision to impose a charge on customers who do not pay their bills by direct debit; and what subsequent action he has taken. (126556)

[holding answer 9 March 2007]: I have received representations from a number of hon. Members on behalf of constituents and have raised the matter with the chief executive officer of the independent regulator, the Office of Communications (Ofcom). Ofcom is considering whether any of the suite of changes BT has recently made raise any regulatory issues.

For a number of years, BT has applied a price differential between customers who pay their accounts by direct debit and those who pay by other means. This reflects the increased processing and debt management costs associated with payments not made by direct debit. Such differentials are common practice among communications providers and utility service providers.

From 1 May 2007 BT is changing how it presents this differential from a discount for those customers paying by direct debit to a charge for those paying by other means. BT has combined this change with an increase of £6 a year in the charge (from £12 to £18). But the increased charge will not apply to special tariff schemes for vulnerable customers provided under the Universal Service Obligation.