CUSTOMER SERVICE? - British Telecom

British Telecom was forced to defend itself after a new policy of charging for late payment caused anger and confusion amongst its customers. BT decided in December 2004 to impose a £5 fine if a customer is more than 26 days late in paying their bill, and the January 2005 bill is the first to carry a warning. But angry customers began contacting the BBC to complain that their bills gave the impression the fine would be imposed within days. BT apologised for the "error" in the wording on the bill which it said it is "urgently correcting", but has defended the fine, saying it is standard practice across other utilities companies.

However, it has said it would look to waive the fine on one occasion for customers with a good reason for paying late, such as a holiday, bereavement or illness. Gavin Patterson, Managing Director of BT's Consumer Division apologised for the confusion, and admitted, "We have made an error. We realise the wording is confusing and we are urgently correcting that message. Anybody who pays their bill within 26 days will not be charged the late payment charge."

But he defended the charging policy, saying, "Late payment charges are standard practice, not just in the telecoms industry but across other utilities, such as water, gas and electricity." He said the company had introduced the policy in response to customer feedback, to make sure "that customers who are good payers, and pay on time, do not subsidise the customers who are late payers". But they still pay more than those who pay by Direct Debit.

BT has been accused of slipping in a "stealth price rise" of up to 110% for its telephone customers. At the moment, BT's more expensive daytime tariff runs between 8am and 6pm. Its cheaper evening rate runs from 6pm to 8am. From February 2005, it is extending its daytime tariff with calls made between 6am and 8am charged at more expensive daytime rates, rather than evening rates. BT insists that the changes will have a "minor impact on a vast majority of customers". But independent tariff comparison outfit uSwitch.com reckons that three million punters will end up paying more for phone calls first thing in the morning.

"Those making local and national calls during the extended 6am-8am period, the cost of their calls will increase by 110%, while customers making mobile calls during 6am-8am will see the cost of their calls increase by 48%," said uSwitch.com in a statement. uSwitch.com's Jon Miller added, "Despite BT's attempts to mask the increase in calling charges by highlighting earlier price reductions, this is effectively a stealth price rise. The fact remains that consumers will still be charged a minimum £31.50 a quarter for line rental before they've even made a call. There are cheaper suppliers in the market, switching is easy and you can make significant savings by shopping around."

A spokesman for BT played down the changes claiming that three quarters of its customers don't make phone calls that early in the morning. He accepted it did amount to a price rise for around 15% of BT's customers, but denied it was done stealthily. (Source: The Register)

The switch to new 118 directory enquiries services has been condemned as an expensive flop that has left consumers out of pocket. The new 118 services that replaced the old 192 number left customers confused and resulted in higher charges, according to the study by the National Audit Office (NAO). The NAO found no evidence the liberalisation of the market had achieved its three main objections: improving the quality of service, increasing price competition and introducing innovative services. Oftel, the former telecoms regulator, decided to open the directory enquiries market up to competition 18 months ago despite research showing 90% of people were happy with the existing system. But the report found two companies, BT's 118500 and The Number's 118118, dominate 80% of the market and both charge more than under the 192 system.

Edward Leigh MP, chairman of the Commons Public Accounts Committee, said, "Ignoring the wisdom of the phrase, 'If it ain't broke, don't fix it', Oftel have made an unpopular and unnecessary change. Just because competition generally brings great benefits does not mean it always works. This is an instance where competition was not needed and is not helpful." BT's 118500 charges 51p for a 45-second call from a landline, 21% more than the 40p it charged under 192. The Number is even higher, charging 56p for the same average call, 40% higher than before. The NAO also highlighted the huge variation between the charges levied by rival operators. The cost of a 45-second directory enquiries call from a landline can range from 27p up to £1.73. The same call from a mobile could be as cheap as 25p or as expensive as £2.50. The report found those who agree to be connected to the number can pay up to £4 for a five-minute call from a landline and up to £12.50 from a mobile.

The introduction of the services beginning with 118 has also led to a drop in the number of calls to directory enquiries, the report says. More than a third of callers say they now use directory enquiries less, although the study found this may be due to switching to alternative sources such as the internet. Despite its criticism, the NAO felt Oftel handled the actual liberalism process well. Sir John Bourn, head of the NAO, said, "The outcome of this market liberalisation for the residential caller has been more choice and innovative services but also an increase in average prices and uncertainty over improved quality." A mystery shopping exercise carried out by Ofcom in November 2004 found 83% of calls to BT's 118500 resulted in the correct number, compared with an average of 86%. The Number's 118118 was 94% accurate but is more expensive than BT, based on a separate survey by the NAO. (Source: Mail on Sunday)

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