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Cash too expensive for you?

In the news today, a story about a woman taking BT to court for charging her a handling fee for cash. In a way I can see her point – most businesses will actually offer you a discount for paying in cash, while BT will charge you more. Also for paying by credit card, debit card, cheque etc.

Thing is – and I hate to say this as I’m not BT’s biggest fan – for once I think they’re right. You set up a direct debit and BT then has to do pretty much bugger all to get your cash each month. If you pay by cheque, credit card, cash in an envelope, babies’ fingers or whatever then they have to process it.

Should her case come through with her victorious then – after lengthy appeals, I’m sure – BT may be forced to drop the charges. Along with every other company that has a similar fee structure in place. This includes most utilities companies, insurance brokers, finance / loan agencies…

So great. Savings all around, yes? Erm. No. All that will happen is that the fee will be removed and everyone’s basic bill increased to cover the cost of getting money from people who don’t use DD.

The poverty argument used in the article is completely moot. “Many people, especially those on the margins of society and who are on low incomes find it very difficult to find any increase for any bill” it says. Simple solution – organise a direct debit so it’s paid from your bank account. Don’t have a bank account? Well get one. The UK is one of the few countries I know of where banking is – if you don’t go overdrawn etc – essentially free.

Her argument that “On a 10 pound note it says ‘I promise to pay the bearer on demand the sum of ten pounds’, not ten pounds plus a £1.50 handling fee” is bollocks. It’s true – it doesn’t say there’s a handing fee. But she’s not paying a handling fee, she’s paying for the time spent by BT on sorting out her payment which they’d not incur if she used DD.

Buy a book from Amazon and they charge you delivery if you spend less than £15. Is that fair on people who don’t want to spend that much? Why should a person who only wants to buy one paperback help reduce costs for someone who wants to buy three? Because it’s cheaper for the company to ship three than ship one. Likewise for BT, it’s cheaper to collect fees by DD than any other method. Rather than the DD users being charged for everyone else, the ones who create the charge pay for it.

Given that any person in the country can get a bank account (illegal immigrants aside) and set a DD up, she hasn’t got a leg to stand on as far as I can tell. The option is there for her to avoid these charges. It’s an option she can take and has the facility to do so.

Unless I’m mistaken? Are there grounds where someone could be refused a bank account / direct debit? And if this is the case – perhaps based on a poor credit rating – wouldn’t they likely be refused a phone connection anyway?

In fairness, my argument falls apart if the charge levied for non-DD payment is out of proportion to the amount it costs the company to retrieve the cash. Then again, BT could always put this down to the fact that it "costs more to chase people who do not pay". A kind of insurance for itself.

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