New Fees From BT!

New charges being introduced in May will hit BT customers who don't pay by direct debit or fail to pay promptly.

With BT's shares at a five-year high and its after-tax profit rising to £465 million in the last quarter of 2006, its shareholders are reaping the benefits of the company's turnaround. On the other hand, customers of Britain's second-biggest telecoms firm (after Vodafone) are in for a shock, as BT plans to introduce a new set of charges in May!

First, BT has announced that its £5 penalty for late payment (originally introduced in December 2004) will rise to £7.50 from May onwards. This fee is charged if full payment is not received within five days of a red reminder letter being sent.

(I would argue that this fine doesn't fairly reflect the work involved in chasing late payments, so it is unlawful under the Unfair Terms in Consumer Contracts legislation, as we've seen with bank and credit-card charges.)

Second, BT is to bring in a new fee which is clearly aimed at forcing its customers to switch to payment by direct debit. From May, customers who pay their bills by methods other than direct debit will be charged a quarterly fee of £4.50.

Eighteen pounds a year for not paying by direct debit? That's daylight robbery, especially when you consider that it will hit people without current accounts hardest -- especially low-paid workers, people living on benefits, pensioners and the elderly. Why not increase the incentive to pay by direct debit, rather than slapping a quarterly charge on those who cannot or will not do so? Shame on you, BT!

This isn't the first time that BT has increased or introduced charges in recent years. In January 2006, BT increased its line rental to £11 a month from £10.50, which put £6 a year on all customers' bills. Last August, BT switched from per-second to per-minute billing, which rounds up the costs of all calls, no matter how short or long. So, leave a five-second voicemail or answerphone message, and BT will charge you for a whole minute. What a swizz!

Even ignoring these new charges, only lunatics would stay loyal to BT, because its rivals charge far less for calls from home telephones (and for broadband, too!). Thanks to fierce competition for communications customers, there are some cracking deals out there -- and switching can be very straightforward.

For the record, the only money that I give to BT is the monthly line rental, a total of £132 a year. All of my calls to UK numbers (beginning '01' or '02') are routed via alternative call provider 1899.com, which charges 5p per call, regardless of how long it lasts or the time of day. Thanks to 1899, I now spend about £3 a month on call charges, which is far better value than switching to one of BT's pricey bundled talk plans (known as Options 2 and 3).

For more information on paying less for calls from your home telephone (and to join the exodus from BT), read Cut The Cost Of Calling, and for advice on cheaper broadband, telephone and digital television, read Go Digital For Less.

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