BT backs down over exit fee

By SIMON LAMBERT, THIS IS MONEY PUBLISHER
Updated:

 

BT has axed plans to punish customers for leaving its service by charging them a £5 fee.

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The phone giant was considering introducing the 'administration fee' for departing customers but cancelled its plans after discussions with watchdog Ofcom.

BT has also opted not to go ahead with its plan to raise the cost of barring outgoing calls from a home phone from £11.50 to £17.50.

However, it will push ahead with controversial increases in charges for those who prefer to pay on receipt of their bill rather than by direct debit or via a monthly call plan, and a rise in late payment fees.

From 1 May, the company will charge an extra £4.50 per quarter for those who pay bills by cash or cheque and it is increasing the charge for late payment from £5 to £7.50. At the same time, the cost of line rental will be reduced by £1 a month

Karen Darby, of consumer comparison website SimplySwitch, welcomed the move not to charge those leaving BT. She said: 'BT is a very innovative company and is always trying to find ways to make more money. Consumers looking to find a better deal were set to be unfairly punished and in today's competitive market a penalty for switching would be seen as grossly unfair.

'These punitive charges give customers yet another reason to leave and will undoubtedly push many people away. The good news is that there is no penalty for changing suppliers. Switching phone companies is quick and easy and doesn't mean you lose your phone number or need new phone lines installed.'

BT's decision to charge customers paying on receipt of a bill has been calculated to raise an extra £100m a year, and critics claim it will hit those on the lowest incomes including pensioners hardest, as they are more likely to prefer bill payment and not have access to direct debit facilities. The phone giant also came under fire last year for switching billing from per second to per minute.

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The proposed introduction of the new BT charges has also led to a row between BT and comparison service uSwitch, which said the phone company was also planning to lock customers into 12-month contracts. Its assertion was based on information sent out to customers by BT in February, but it subsequently denied uSwitch's claims were accurate.

The BT letter to customers explained that existing customers ending their service early would have to pay the outstanding line rental for the 12 month minimum term of their contract, while those moving home and transferring their BT service would be subject to a new minimum contract term.

But BT said it had told customers online and in the latest edition of its magazine that the leaving fee and outgoing calls charges would not be introduced and that it still offered basic non-contract phone services, with an £18 charge for new lines ended within nine months and charges decreasing from £13 for existing lines cancelled within one month.

Steve Weller, of uSwitch, said: 'If BT has indeed reversed its decision to introduce any of the charges we have highlighted, we welcome this; however it is imperative that they inform their customers in writing of this turnaround as a matter of urgency, as well as making a public announcement.'

BT said most customers were pleased with their service. John Petter, of its consumer division, said: 'Our policy on customer charges is entirely in line with the industry. For this reason we decided proactively to tell our customers in the April edition of the customer magazine that we weren't going to implement some of these charges. 'More customers are coming back to BT than at any time for the last four years.'

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