Why is the poor cheque payer penalised so much?
Our latest investigation found you could be paying more than £100 extra for your gas and electricity if you pay by cheque or bank transfer rather than direct debit. That’s £100 to process four cheques!
On average you could expect to pay about £20 to £50 to pay by cheque, in 2004. It’s now around £100. That’s up to five times as much as it was eight years ago, (depending on your supplier).
While I accept processing a cheque requires a little more administration than receiving a direct debit, you’d comfortably assume it doesn’t cost £100 to handle four cheques a year. So what’s going on?
£100 to process four cheques
We asked the major energy suppliers how they justify these charges. They said they have to protect themselves against debt in addition to the processing costs. And some said that our current state of financial affairs means the risk is greater, hence the rise. The thin silver lining was that some said they offer a prompt payment discount.
But this seems cold comfort to the cheque payer – particularly the punctual ones.
Lower energy bills for direct debit payers
In our research in July we found 56% of energy customers paying by direct debit are in credit – by £161 on average. So it’s perhaps not surprising that people aren’t rushing to hand over their bank details for their energy company to automatically deduct their payments.
As it costs companies less to process customers’ payments when they pay by direct debit, we think it’s sensible that some of these savings are passed back in the form of lower bills.
However, the extra costs for those who don’t pay by direct debit should be proportional to the cost.
How do you pay your energy bill and how would you like to see energy companies looking after for customers who don’t pay by direct debit?
It costs £100 extra to pay energy bills by cheque than by direct debit - is that fair?
No - £100 is far too much extra to pay by cheque (76%, 181 Votes)
I'm not sure - cheques cost more to process, but £100 may be too much (18%, 42 Votes)
Yes - £100 is a fair price to pay by cheque (6%, 11 Votes)
Total Voters: 238
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