3/6/2008 10:34:00 AM
£180m bill from Ofcom to networks
Ofcom’s plans to curb ‘unfair additional charges’ against customers who do not pay their monthly bills by direct debit could cost the industry £180m per year.
Ofcom has reacted to customers’ concerns that the charges hit those who can afford them least, with O2, T-Mobile and 3 all charging £3 for non-direct debit payments while Orange and Vodafone add an extra £3.50 to bills.
Figures from Ofcom reveal that 21% of contract customers do not pay by direct debit, and with over 23 million contract customers in the UK, that means at least £15m per month is raised in charges.
Operator advertisements only show the direct debit cost, with the proviso that the bill is paid by direct debit buried in the small print.
Now the regulator wants to introduce what it terms ‘fair’ costs, and to make sure that customers’ attention is drawn to the potential full cost when they take out their contract.
Operators who are unwilling to publicise the charges may have to remove them altogether.
Ofcom chief executive Ed Richards (pictured) said: ‘While the amount that consumers pay for communications services is falling year-on-year, the full picture is not always so apparent.
‘Communications providers need to do more to ensure that consumers are properly informed up front about any charges which may be incurred.
‘They will also need to change some terms and conditions to ensure these charges are set fairly.’
A spokeswoman for O2 said the network is trying to move away from the charges, with no new customers charged for not paying by direct debit. She also claimed that ‘0.1% of O2’s customers currently pay the £3 charge’.
A spokeswoman for Orange added: ‘The charge reflects the costs incurred in processing payments.’
Ofcom’s consultation of consumers and industry figures will close on 8 May.