Consumers fleeced over bill payment methods

Many people these days are keen to try and reduce their outgoings, and in the current financial climate with so many people struggling financially making cutbacks has become vital for some people. One of the ways in which many people try and cut back is through reducing their bills by doing thing such as switching providers, which can help to make significant savings.

However, one way in which many consumers are wasting millions of pounds a year between them on their bills is via their payment methods. Many people fail to realise that companies these days often charge a small fortune based on how the consumer pays their bills, and that by making a simple change to their bill payment methods they could make a significant saving.

Companies such as energy suppliers, home phone providers, and broadband providers often make additional charges to those that do not pay by direct debit. Most consumers have a number of choices when it comes to making payments on bills, such as direct debit, standing order, cheque, or in person at banks and post offices.

For those that do not pay by standing orders some companies such as broadband and utility providers apply an addition monthly or quarterly charge, which can really bump up the cost of services for the customer. For example, Virgin Media, which provides phone, television, and broadband services, will charge consumers an extra five pounds a month for failing to pay by direct debit, which equates to £60 a year. In addition to this the company charges extra when customers ask for paper bills to be sent to them.

In order to save more money on their bills consumers should set up direct debits wherever possible, as otherwise they can end up being charged a small fortune on the cost of their bills. There is also another benefit to setting up a direct debit for a bill payment, and this is because it can reduce the chance s of making a missed or late payment, which can also incur charges when the payment is on something such as a credit card or loan. These missed or late payments can also result in the consumer’s credit rating being affected, which can make it more difficult to get finance in the future and makes it more expensive to get credit due to higher interest rates charged.

Tags: debit, loan, Standing order, payment, Payment systems, Direct debit, finance, way

Tips to make 2010 a money saving year

If you are one of the many people that have decided that their New Year’s resolution involves cutting back on costs and saving money then you may still be thinking of ways in which you can achieve your goal. Saving money and cutting back on your outgoings isn’t always easy, and you may have to think carefully about the different areas in which you can make cutbacks. However, there are actually a number of ways in which you can save money, and some of these are outlined below. Read more

Tags: interest, Credit card, finance, insurance policies, insurance market, debt consolidation

Avoid late payment fees on credit cards with direct debits

As most people know the fees and charges that credit card firms impose for late and missed repayments can quickly add up, costing a small fortune. Whilst credit card companies have had to cap these fees at a maximum £12 for the last few years they fees can amount to a tidy sum over time.

Given that many people make late repayments from time to time or even miss repayments altogether credit card companies are able to make a fortune from these fees.

Industry officials are now advising consumers to try and avoid paying these fees by ensuring that their payment is made every month and in time.

Whilst this is not always easy given the fast pace of life that many of us have to cope with there are ways to ensure that your payment is never missed or late, thus avoiding the hefty fees that can otherwise be applied to your account.

Consumers who set up a standing order or direct debit to have their credit card repayments made each month do not run the risk of missing repayments or making late payments, and therefore do not have to worry about being charged because of this.

Customers are advised to set up a payment for at least the minimum amount to come out, although those that pay in full each month can make arrangements for the full bill to be paid each month.

One consumer stated: “I used to miss credit card repayments on a regular basis, and because of this I used to spend a fortune in charges alone, which was a complete waste of money. However, not that I have made arrangements with my bank I know the money will go our automatically and in time, so I have no need to worry now.”

Tags: credit card late payments, fees, Direct debit, late payment fees, industry officials, credit card charges, standing

Claims that energy firms are ripping off consumers

Further claims have been made recently that the UK’s energy giants are continuing to rip off consumers, and as many households struggle to keep up with bills and payments on their homes, he energy giants are said to be sitting on billions of pounds worth of consumers many. The claims come amidst controversy that British Gas, one of the UK’s major suppliers, has been increasing the direct debits of customers by 50% or more over the winter, even in cases where the customer’s account is in credit. Read more

Tags: something, lib, cash, energy firms, Direct debit, government official, Utilities, consumer

Current accounts help poor save money, union says

Current accounts are the safest way for those on low incomes to save money, credit unions said today.

ABCUL, the main trade association for the unions, said that these accounts also give lower-income customers access to direct debit, allowing utility bills to be paid more cheaply.

Spokesperson Lucia Webster said that they offered “a safe and accessible option for many people in the UK.

“It offers much more than a basic bank account from a high street bank.”

Ms Webster added that unions “offer a wide range of services to all sectors of the community, including people who may have difficulty accessing high street banking services.”

The Family Resources Survey from 2005/06 shows that 97 per cent of British households have some form of saving account, with fully 90 per cent of the population hold a current account.

Tags: Direct debit, savings account, high street banking, utility, Transactional account, Financial institutions, offer

Direct debit costing insurance customers millions

Millions of people are paying too much for their contents insurance because they are being charged for paying by direct debit.

New research from Abbey shows that 9.3 million of us are being forced to pay a combined total of £290 million in direct debit charges.

The firm found that of the 215 policies which are on the market, 44 per cent charge interest to customers who use direct debit.

It has been calculated that the average person is paying £31 a year more for the privilege, with some being forced to pay £55 a year.

Of greatest concern for Abbey is that many people may be completely unaware of the interest being charged, leading to a false sense of satisfaction with a provider.

“Using direct debit to buy home insurance is not a service you should be paying for,” said Prasad Shastri, head of insurance marketing at Abbey.

“There is no point using a competitively priced insurer if they then go and add to your annual bill using back-door methods.

“Customers should carefully look to avoid insurers that levy an additional fee for paying premiums over the course of the year,” he added.

If you are considering taking out any type of insurance check to see if a charge is levied for paying by direct debit and calculate if it is worth your while switching provider.

Tags: Debit card, finance, Direct debit, Business Finance, Direct debit costing insurance customers millions, Types of insurance, insurance customers