back to article Ofcom to clamp down on 'unfair' charges

Telecoms firms must stop lumping "unfair" charges onto consumers' bills, according to new proposals put forward by Ofcom. The UK regulator said penalties for paying by cash and cheque rather than direct debit, ending contracts early, or paying bills late should only reflect the charge to the operator rather than a way to get …

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  1. Anonymous Coward
    Stop

    Law.

    This should be enshrined in law as it is in other countries. "Guidance" has and never will work.

    I think ofcom may need a re-vamp, they don't seem to be serving the public too well lately.

  2. Anonymous Coward
    Anonymous Coward

    about bloody time

    How did BT (spit) ever mug this lot into thinking it was acceptable to CHARGE customers FOR PAYING THEIR BILL? WTFFF?

    - but I noticed, when i had to register for online billing, that the name "fuckingwankBT" (my first choice) had already gone...!

  3. This post has been deleted by its author

  4. Anonymous Coward
    Alien

    One down, five thousand, three hundred and ninety-seven to go...

    What about all the other scamming charges from BT? E.g. £70 to "connect" a phone line unless you take out a 12 month contract with BT and then it's magically zero.

    The alien 'cos we're more likely to be visited by one before Ofcom does anything serious.

  5. This post has been deleted by its author

  6. James Bassett
    Happy

    DD Discount

    I've never understood why Telcos (and others) charge "Extra" for paying by methods other than Direct Debit. Of course that is going to get people's backs up.

    On the other hand, if you simply offer a "discount" of, say, £5 to Direct Debit customers to reflect the savings to the Telco then I can't see the argument (though people will. That's the nature of people!).

  7. DR

    it's not just BT

    telewest used to charge me an extra £5 per month for the privellage of paying my bills manually.

    and yes, this really does need to be law, not guidance.

    I absolutly refuse to believe that in BT's case the cost to them to end a contract early will be all of the remaining contracts fee's + £70...

    that's utter bull...

    having said that I'm currently signed up with Virgin, their contract exit fees are just finish paying your contract, since I sign a contract and essentially promised in that contract to stick with them for a year I don't see this as being too bad.

    so far as making people more aware, it's all on the websites, I signed a six month contract on a rented house, so I needed to know how much it's cost to be telco free when I moved out, it was easy enugh to find, those that can't find it must eiter be blind, dumb or both.

  8. john loader

    They've actually done very little

    !. Telcos own costings have been accepted for charges

    2. Electronic transfer via ebanking or ATM has not been considered even though this costs the Telco nothing, saves them the cost of setting up the DD and often means they get payment quicker as they may not have to wait 10 days from bill date as they do with a DD

    3. What competition? Our exchange has no LLU like many rural ones. BT can rook us how they please because we can't go elesewhere for lines. I have broadband and calls from other suppliers but can't get lines so have to pay whatever BT wants.

    4. BT Residential Billing has a large workforce in India which has different data protection laws to the uk - they also work for sub contractors. No account has been taken of the fact that whilst many will pay UK companies by Direct Debit, sending such information out of the EU is dangerous to one's wealth.

  9. Graham Dresch

    Doesnt go far enough

    While looking at BT, Ofcom need to order sliding reductions in line rental charges, starting at the end of the compulsory rental period, the rental charge needs to be cut ( by at least 10% ) for every subsequent year you are a customer. How long does it take to pay for 200 yards of copper wire ?

  10. Lee Sexton
    Thumb Down

    Not Just BT

    As mentioned above, it isn't just bt doing this, most companies are doing it. Lets be honest here, Direct Debit sucks eggs, it supposedly has guarantees for us, but lets face it, they take first then you have to ask questions, far too many times I have had bank charges due to companies having total control over your bank account(lets be honest this is what Direct Debit is).

    Thery have taken cash on the wrong date, leaving me with a bank charge, they have taken too much money (virgin media you are guilty of this on far too many occasions) and another payment has then become rejected leading to a bank charge. I don;t mind but £39 a pop is a lot of money for me.

    I hate direct debit and I'm sure many others do, lets not turn this into a "yuou should manage your finances better" argument when we have rogue companies (who are supposedly the big guns) taking whatever amount of money they like.

    I'd like to see direct debit reformed not just companies charging you to pay by alternative methods.

    Saving trees? Dont think so, just handing control over to whoever wants your cash and whenever they like.

  11. dervheid
    Joke

    '@ Oliver Jones

    Spot on mate. Contractual terms should only be able to be changed bu MUTUAL AGREEMENT.

    Mind you, until OFCOM are issued with decent regulatory teeth, and are actually prepared to use them...

    Joke Alert?

    OFCOM, they're the joke!

  12. W
    Thumb Down

    We don't care! What about "Unlimited"?

    A lot of good comments, mostly about what OfCom should be doing instead...

    >@Oliver Jones - "What I would like to see is an end to any Telco's ability to change terms and conditions."

    -Agree entirely. You sign a contract. If the terms change, the previous contract should become null and void.

    >@Tim Spence - "I'm not sure I agree with being able to pay myself out of a contract for less than the rest of the contract would have cost. Surely that's the point of a contract? As in, you are contracted to pay x number of payments at £x per month? If I was a business dealing with contracts with consumers, I'd be a bit pissed if that became the case."

    - Agreed. As above, a contract involves mutual obligations.

    >@ Bruce - "What about all the other scamming charges from BT? E.g. £70 to "connect" a phone line unless you take out a 12 month contract with BT and then it's magically zero."

    - Indeed. Transparency please.

    >@ James Bassett - "if you simply offer a "discount" of, say, £5 to Direct Debit customers to reflect the savings to the Telco then I can't see the argument (though people will. That's the nature of people!)"

    - Exactly. The charges will be applied via pricing somehow. I don't want to be paying for difficulties arising from other folks non-payments.

    >@ DR - "I absolutely refuse to believe that in BT's case the cost to them to end a contract early will be all of the remaining contracts fee's + £70... that's utter bull... having said that I'm currently signed up with Virgin, their contract exit fees are just finish paying your contract, since I sign a contract and essentially promised in that contract to stick with them for a year I don't see this as being too bad."

    - As per Tim Spence's point. You commit to 12 months subscription. You pay for 12 months subscription. If you don't like those reasonable terms, don't sign.

    ...so OfCom should stop faffing around debating a £2.50 charge that applies to a demographic that causes proportionately more havoc for the comms companies. Then it can pick up a dictionary and open it at the page containing the entry for "Unlimited" and get cracking with court proceedings in order to draft a definition for "Fair Use".

  13. Neil

    @ Tim Spence

    When it comes to breaking contracts, there's a concept called mitigation of damages. Before a company can collect money from the contract breaker (the customer), it must attempt to recoup that money by selling its services to another customer. Any money recouped is money not owed by the first customer for breaking the contract. I don't know about the UK, but in Canada, a company MUST attempt to mitigate its damages.

    If the customer pays the remaining amount on the contract and the company then resells those same services, it just made double income.. and that's a no-no in the eyes of regulators.

    Fees for breaking a contract make sense, but they should be reasonable in so far as they relate to the expense of reselling the services and not as a profit generating arm of the business. IMHO, anyway.

  14. RW
    IT Angle

    Law? Greed? Regulation?

    In the United States, every dollar bill carries the statement "legal tender for all debts, public and private." Here in Canada it's "this note is legal tender."

    IANAL, but I'm pretty sure that the effect of such statements is that cash MUST be accepted for payment of debts.

    I'm not 100% sure of my facts, but United Parcel Service drivers used to refuse to accept cash for COD charges, but now they do. I suspect someone got after them and pointed out that they were required by law to accept cash if offered. [Their justification was that it made the drivers subject to robbery.] [I may be wrong in saying they now accept cash.]

    The conclusion seems inescapable that British telcos are doing this kind of thing merely to charge more money, whatever way they can. They have captive customers so they see no problem with sucking blood out of them at every opportunity. They can -- and do -- get away with it because the government is too supine to bother with legal fundamentals like "the law governing the payment of debts."

    There remains the simple fact that certain types of business are public utilities: water, sewer, electricity, and, yes, internet connections, and whether they are monopolies or not it is simply damned Thatcherite foolishness not to regulate their rates and charges: dictate what they can charge under what circumstances, and that only after public hearings: just like any of the gazillions of "Public Utility Commissions" in the US and Canada.

  15. Harry
    Alert

    Still NOT enough

    They should come out and BAN rolling 12 month contracts altogether.

    There's (possibly) some justification in having a minimum contract term when a person first signs up -- though only if hardware or work on the customer's site is needed, and even then the penalty should be no more than actual cost minus half existing payments.

    However, there's absolutely NOTHING that happens to cost the telco an unexpected lump sum on every 12th anniversary of the user first joining, and therefore absolutely no justification in having any penalty beyond the 12th month of service.

  16. Luther Blissett
    Gates Horns

    @fuckingwankBT

    Apparenty my credit card company and my bank also have a lot of customers with very rude online names not dissimilar to theirs, I discovered. In fact they seemed to have customers with similar names for every rude word I could think of, no matter how it was composed.

    Perhaps El Reg might offer a little prize for copies of the look-up dictionary that these cloven-hoofed racketeers are using to spare their management blushes? And a special award to the racketeer with the biggest blush.

    Were it that they took such care over their customers interests.

  17. Andy J

    Contracts

    to Oliver Jones and others, contract law already protects you to the extent that if one party to a contract wants to change the terms, this must be agreed to by the other party, ie effectively what happens now when a teleco (and others) informs you of a change to the t&cs that is your opportunity to disagree. If you don't, you are deemed to have agreed by default. Unfortunately by disagreeing to the changes you are effectively ending the contract. For those locked into a 12 or 18month contract this is a Godsend as it allows you out without penalty. In theory you could take the teleco to court to try and enforce the original contract, ie keep your contract on the original t&cs but although it wouldn't necessarily cost you as you can represent yourself rather than get Michael Mansfield in, the teleco would probably win a). because it can hire a high priced legal team, and b). because it could argue that if every customer had their own individual contract with the company, it would be impossible for the teleco to operate its business (do I hear sobbing in the background?)

    So yes Oliver, in practice you are right, but the same principles apply to any contract between David and Goliath.

  18. Chad H.
    Thumb Down

    @rw

    ianal either, but I know here in the uk, retailers are legally allowed to levy additional charges for certain payment types. Check out the pages on wikipedia for visa and mastercard for some references (wiki isnt my reference, its where my references are).

  19. Mike Bronze badge

    legal tender

    they do in fact have to accept legal tender to settle a debt, however they are under no obligation to provide a service for legal tender - you can walk in to a shop and they can refuse to sell you anything (there is no debt so legal tender is irrelevant), however if you have a meal in a restaurant and get the bill at the end then they have to accept legal tender (interesting bit of information: in scotland this means coins, there is no legal tender bank note of any kind and they can damand the payment in coin form)

    you'll notice that with most telcos they send the bill out in advance (a bill received at the end of janurary is for febuarys service) - if you fail to pay then they generally don't cut you off until after

    however if you do fail to pay what happens is they just terminate service, and then will refuse to sell you service again until the original debt is payed (i've never heard of someone being taken to court), therefore legal tender still does not apply as legally they are merely stating for the second connection that they are adding £<outstanding debt> to the charge for connection, if you don't want to pay it then they won't provide service

    the legal tender argument then only works for something like paying off a credit card bill etc if you can find a card issuer that doesn't accept cash (if they refuse the cash payment then they can not legally collect the debt, however they can revoke your card and refuse to provide further service etc - not sure about being allowed to pass the non-payment on to collection agencies though)

    regarding unlimited, this is in fact illegal (under the Unfair Terms in Consumer Contract Regulations 1999 mentioned in the article) - this is also the same regulation that makes bank charges illegal (at their current levels) and unenforceable, however they still make the charges because they know that the ignorant masses just pay them and don't argue (example: Lee Saxton above who it sounds like has made many payments and done nothing about it)

    the same is true of the "unlimited" claims, if the ignorant masses just accept it they carry on doing it - although with the "unlimited" claims as far as i know this is even worse as nobody has ever actually taken their ISP to court for it (they are being allowed to get away with it) unlike the banks who just consider that acceptable losses (the less than 1% who have taken them to court cost much less than what they made from the other 99%, so they break the law knowing the end result after punishment is a net profit - another example of the courts letting us down)

    but regarding the original article, all i can say is: are they fucking kidding? of all the things they could use our tax money for they chose that! we'll ignore rogue premium rate operators, we'll ignore outright lying and failure to provide the unlimited service sold to customers, but giving people an option of paying different amounts for different payment methods - what a major problem! i wouldn't be surprised if the person who decided ofcoms priorities was the same person who told the police that they should stop concentrating on those little murders and start tackling that major problem of people doing 35mph in a 30 limit

  20. technos
    Alert

    Rude names? Oh my.

    -- Apparenty my credit card company and my bank also have a lot of customers with very rude online names not dissimilar to theirs, I discovered. In fact they seemed to have customers with similar names for every rude word I could think of, no matter how it was composed.

    Those user accounts are the ones administrators use for internal testing. Who hates an online bill payment system more than the ones that designed and implemented it, after all?

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