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Utilities: Fees and Charges

Volume 460: debated on Thursday 24 May 2007

To ask the Secretary of State for Trade and Industry what complaints his Department has received about utility companies that charge a payment processing fee to customers who do not use direct debit facilities. (135486)

I have received a number of representations from hon. Members about this matter. I have therefore raised the issue with the chief executive officer of the independent regulator, the Office of Communications (Ofcom). Ofcom is considering whether the level of the charges across the communications sector raises regulatory issues.

To ask the Secretary of State for Trade and Industry what estimate has been made of the income generated by utility companies as a result of payment processing charges for customers who do not use direct debit facilities. (135487)

No estimate has been made as this is a commercial matter for the companies concerned.

My understanding is that organisations do apply a price differential between customers who pay their accounts by direct debit and those who pay by other means on the basis of increased processing and debt management costs associated with payments not made by direct debit. Such differentials are common practice among both communications providers and utility service providers.

To ask the Secretary of State for Trade and Industry what recent discussions he has had with utility companies on the payment processing charges for customers who do not use direct debit facilities. (135488)

I have raised this issue with BT and the chief executive officer of the independent regulator, the Office of Communications (Ofcom). BT operates schemes to ensure that vulnerable groups have access to affordable telephone services. BT reassured me that their special tariff schemes are not affected by the increased charges. Ofcom is considering whether the level of the charges across the communications sector raises regulatory issues.

Telecoms providers and utility providers do mostly apply a price differential between customers who pay by direct debit and those who pay by other means on the basis of increased processing and debt management costs associated with payments not made by direct debit.

I have not held discussions with other utility suppliers on this issue.