Charging customers £1.50 for a paper version of their phone bill is a commercial decision for Manx Telecom, Tynwald was told.
Office of Fair Trading chairman David Quirk came under fire from MHKs as he defended Manx Telecom’s right to charge customers more if they don’t choose to have electronic bills or pay on-line or by direct debit.
Mr Quirk said many firms use discounts as a means of encouraging customers to use electronic billing and online or automatic payment.
He said: ‘Manx Telecom have chosen to do the same but has expressed it the other way round. Rather than saying “use on-line billing and get a discount” they are giving everyone the discount and saying “if you want a paper bill it is extra”. It is the same outcome.’
Mr Quirk insisted it was not misleading, which he said is the test the OFT would use to decide whether to step in or take enforcement action.
He added: ‘Ultimately, the decision to charge less for electronic bill, on-line payment or direct debit payment is a commercial decision. What the OFT does expect is that firms make it clear to consumers what the charges are. In this case it is clear.’
Douglas North MHK John Houghton pointed out many elderly people still use paper bills and asked the OFT chairman whether he morally supported this £1.50 charge.
Mr Quirk replied the customers had a choice to have a bill in paper form or pay using e-billing. He pointed out BT in the UK charge £1.70 and that both operators in the island operate the same principle.
Lib Van leader Kate Beecroft (Douglas South) said it was very strange that when you’re not charged for something it was classed as a discount. She said: ‘It just seems to me to be a nonsense. It’s wide open to abuse by all sorts of companies to claim they are giving everyone a discount because they are not going to charge them for something.’
Rival telecoms operator Sure charge £1.50 for customers who don’t pay by direct debit but settle bills over the phone, by post, in store or at the post office.
A Manx Telecom spokesman said: ‘Manx Telecom is certified to the international environmental standard ISO 14001:2004 as we are committed to minimising the impact of our operations on the environment.
‘Our policy on paper bill charges has helped increase the number of customers taking an electronic bill and we will continue to make every effort to encourage customers to take the environmentally friendly, and free, e-billing option.
‘E-billing is now the industry’s default billing practice, with a charge levied for delivery of a paper bill and a further premium typically applied for full itemisation.’
From April 1 2016 new customers, or those existing customers wishing to renew any aspect of our services, have been given these choices:
* A free e-bill: Notification by email that their bill is available to view online, with full itemisation available free of charge through our ‘My Account’ service
* Or a paper bill charged at £1.50 (inc VAT) per bill, with full itemisation available free of charge through our ‘My Account’ service
* Or a fully itemised paper bill at £3.60 (inc VAT) per bill.
The spokesman added: ‘The Manx Telecom charge for a paper bill is reasonable when benchmarked with other service providers; for example, BT in the UK charge £1.75 for a paper bill and Sure in the Isle of Man charge £1.50.
‘As with all other operators, Manx Telecom’s charges must reflect the underlying costs of providing any given service. Producing a paper bill involves printing, enveloping and postage costs, over and above those of providing an electronic bill. It would therefore be unfair to pass on the costs of producing paper bills to those customers who are happy to receive an electronic bill.’