Low earners and elderly to be ‘hit hard’ by cash payment charges

Low-income families and older people are set to be those hit hardest by those companies who look to charge their customers extra for not paying through direct debit, claims an industry expert.

According to associate director of Credit Action Chris Tapp, moves by the likes of Virgin Media and BT to pass on extra costs to those who pay their bills in cash could hit some of the most financially vulnerable.

He said those customers who do not have a bank account may find themselves negatively impacted upon as they do not earn very much money, "they might live in an area where there aren’t any local banks, for example".

Mr Tapp added that older people may find the concept of direct debit complicated as they prefer to make bill payments personally using cash, as they believe the electronic payment method makes them feel out of control with their finances.

Figures released by Abbey last week suggested home insurance consumers are being charged an extra £31 a year, totaling to £290 million, for paying for the service via direct debit.

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