Elderly fined if they pay bills 3 days late

ELDERLY homeowners are being hit with fines if they pay gas or telephone bills just three days late.

A Money Mail investigation found the charges were buried in small print of contracts offered by major firms.

These jargon-filled terms and conditions can be as long as 27 pages. Those most at risk are pensioners who pay by cheque or cash, rather than by direct debit. In the worst cases the fees add 50 per cent to monthly telephone and internet costs – and some energy firms demand £25 on top of a typical quarterly gas and electricity bill.

Experts warned the charges could quickly add up for dementia sufferers or those who have an unexpected hospital stay. Martyn James, of complaints service Resolver, said bills are ‘incomprehensible to most people, so slipping charges for late payments under the radar really is unacceptable’.

Edward Molyneux, of switching organisation The Big Deal, said: ‘Energy companies hold on to millions of pounds of their customers’ money while paying zero interest. Yet they charge payday loan style rates on money owed to them.’ Most customers pay by monthly direct debit – typically the cheapest method as it is automatic and more convenient for suppliers.

But four in ten pay by cash or cheque on receipt of a bill. These are often older or vulnerable people who prefer paper statements and are not comfortable letting suppliers dip into their bank account.

If they pay late they face hefty fines. British Gas adds £13 but said it would not typically do so till nearly two months after a bill is sent. Eon charges £10 after two weeks if ‘initial attempts to recover the outstanding balance are unsuccessful’.

Terms and conditions reveal EDF Energy charges interest at 8 per cent over base rate – currently 0.25

‘Payday loan style rates’

per cent; SSE at 4 per cent; and Scottish Power at 2 per cent. On a £300 quarterly bill, 8 per cent plus base rate works out at almost £25. But the three firms claim they do not enforce these charges.

TalkTalk adds £12.50 after three days if customers do not get in contact. BT charges £7.50 if there is no payment within ten days of a reminder, or seven days if paying monthly. The reminder comes ten days after the bill. Virgin Media adds £10 if it has to issue a second bill, about 30 days after the first.

Two in three households have no idea energy firms charge interest if they pay late, CompareTheMarket found. An Ofgem spokesman said treating customers fairly meant ‘being upfront about any charges, and communicating them clearly and simply’. An Ofcom spokesman said the charges must be ‘fair and made clear’.

A spokesman for Energy UK, representing providers, said: ‘If consumers are struggling … they should get in touch with their supplier.’