The monthly instalment payment rip-off

I’ve used BT as my broadband internet provider for at least 20 years, and I’ve had a BT landline for much longer than that.  I used to pay off my bill in full as soon as it arrived, which was quarterly in the days before on-line billing, and later to monthly billing. My ‘deal’ costs about £60 per month.  Quite expensive, really, especially when compared with my mobile phone bill, but the speed and reliability have improved hugely over time, and changing could cause problems that would offset the savings I might make.

Well, I try out various new things for BT, and in May 2018 they asked if I would try Quarterly Billing with a monthly payment plan and I naïvely agreed. They set up the bill to be issued on the first day of each quarter and for the direct debit to be taken on the first day of each month.  They told me the payment would be £49.50 a month (which didn’t seem right to cover a bill of about £60 a month, but I left it to see what happened), starting from 1st July 2018.

So, with the first bill issued on 2 Jun, I was £177.61 in debit because they charged for 3 months of usage, and no payments had been taken.

By the next bill,  1st September, they told me I was £181 in debt.  How come? I checked and they were taking £89 per month – not the £49.50 they’d originally said – but there were only two direct debits – 2nd July and 1st August.  Of course, the 1st September payment hadn’t been taken because that was a Saturday, but they were charging me for 3 months in advance.  So by the next bill, 1st December, my account was £103.93 in debit.  There were 3 payments of £89, but the payment of 1st December had not been recorded – again a Saturday – so they increased my payments to £99.50 a month (remember that my usage was about £60 a month). By the next bill (March), I was £99.42 in CREDIT, but they kept the payments at £99.50 a month!

The catch is that with quarterly billing, they charge you three months IN ADVANCE and at the same time, they expect you to have built up that 3 months credit BEFORE they calculate your account.  If you don’t have enough to clear the account at that point, they whack up the monthly payments.

But that’s not all: even though my account was already almost £100 in credit, they only reduced the monthly payments to £78 a month even though I’m spending about £60 a month!

So they have built up a credit of over £300 in my account, so that they can pay off a bill of £185 which will itself be charging me for three months in advance!

It should be noted that many other companies are doing the same. Steer clear! Pay your bill in full every month. It will cost you less.

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