BT will charge customers an extra £4.50 per quarter if they pay their bills by cash or cheque from May, according to price comparison service, Simply Switch. These administration costs are far higher than those for direct debit.

 Late payment fees will also be increased from £5 to £7.50. Karen Darby, founder of SimplySwitch.com commented: “Instead of rewarding customers who switch to direct debit, BT has decided to penalise those that don’t. Around a quarter of BT’s customers, about 5.5 million, currently pay by cash or cheque, so unless people switch to direct debit and avoid the charges, BT could make up to £24.75 million per quarter. This is £99 million per year… a figure that will grow even higher when BT’s new late payment charges are taken into account.” She continues: “Switching to direct debit is generally a good idea, but customers who are unwilling or unable to pay this way shouldn’t have to put up with these charges. Switching phone companies is quick and easy and doesn’t involve changing phone number or having new phone lines installed. If customers are unhappy with these new penalties, they should hang up on BT and switch providers.”