Questions of Cash: Debt collectors chased bill that arrived four years too late
Friday 25 January 2013
Q. I have just received a bill for over £300 from British Gas, after I was initially contacted by a debt collection agency. The bill was for an eight-month period in 2008, for an address where I was a tenant. This is the first I heard of the bill. I can no longer recall who the energy supplier was, but I remember organising a final payment over the phone after I left the property. My bank account shows that I paid £30.97 to British Gas just after I left the property. The bill was dated November 2012 and based entirely on estimated readings. RC, Glasgow.
A. British Gas accepts that it was wrong to bill you four years after you left the property. Apparently the problem relates to the supply of electricity – you bought both gas and electricity from British Gas's Scottish Gas division. The account for this was not set up properly by British Gas. As a result, British Gas failed to bill you for the electricity that you used while living there.
This error was only recognised by British Gas in November last year, leading to a bill being sent to the address held by the company as your forwarding address. As you have since moved again, you did not receive this bill, nor the subsequent reminders. The outstanding account was then passed to a debt collection agency for recovery.
A spokeswoman for British Gas says: "The bill for £305.36 should not have been generated due to the delay in billing the account. It has therefore been withdrawn in full and we have taken the necessary steps to ensure that [the reader's] credit file has not been affected."
Q. I have been a Scottish Power customer for electricity provision for over 30 years, but recently decided to switch supply following further cost increases. I was aware that the tariff I was on attracted a £30 cancellation fee. However, I had received a letter from the company advising customers that should they choose to switch supplier before 3 December 2012, no cancellation fees would be applied. My transfer of supplier occurred on 22 November 2012.
I was subsequently called by a Scottish Power representative attempting to coax me back and he advised me that I would be charged a cancellation fee. He was unaware of the letter. I emailed Scottish Power and was told there would not be a cancellation fee. A few weeks later I received a final account from Scottish Power, which applied a cancellation charge of £30.64. I then phoned Scottish Power and was assured I would receive a cheque refunding the cancellation charge. I have heard no more since. RM, West Lothian.
A. Scottish Power apologises and says that your difficulties were caused by "an administration error". It has now processed the repayment of the cancellation charge.
Q. I have two private pensions and will soon be getting the state pension. One of the private pensions is quite large and paid monthly. The other is much smaller and paid annually, at a thousand pounds a time. It would suit me if this was turned into a lump sum payment. But when my private pensions were first paid in 2008, I took the maximum I was allowed – £14,353 – as a lump sum. Is there any way that I can now obtain a further lump sum from the annuities I receive from my private pensions? IC, by email.
A. HMRC stipulates that most of a pension must be paid as income, not in cash. Tom McPhail, head of pensions research at the advisers Hargreaves Lansdown, says: "HMRC wouldn't want the money paid as a lump sum as it would breach the 75 per cent as income rule. The only way around this would be to use the flexible drawdown rules allowing surplus pension rights to be paid as a lump sum only after the individual had secured for themselves a guaranteed income of at least £20,000 a year." A detailed explanation of the flexible drawdown rules is published on the HMRC website, at www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09103590.htm.
Q. My daughter has a Bank of Ireland account in the Republic of Ireland, enabling her to make payments easily across the eurozone. She recent issued an instruction for an electronic transfer to be made for €2,000, stipulating a date in advance for the payment to be made. Instead the payment was made by a banker's draft. The recipient's bank treated the payment as if it were made by personal cheque and refused to show it as cleared for several days. This caused my daughter severe difficulties. Can you find out why the transfer was made by banker's draft, when it was instructed for payment electronically? We want to avoid the problem happening again and we don't understand the explanation given by the branch. RS, Northern Ireland.
A. You may have been confused by the different procedures adopted in the Republic of Ireland and the UK, because of what the bank describes as "jurisdictional differences". A spokeswoman for the bank says: "There are a number of different ways to effect such a transfer and we would normally encourage customers to use our online banking facility, which is also available in the branch.
The other method that is used in-branch is the 'interpay', which is used to transfer funds to a third party account of another bank. This is done in the branch, is only available to customers who wish to transfer in excess of €3,000 and is charged at 0.75 per cent of the value per transaction. An interpay transfer can take up to three days to reach a beneficiary account. A [banker's] draft is an unusual method to use as it goes through the same clearing cycle as a cheque and therefore can take several days before the funds are cleared in the third-party account." Your daughter has now opened an internet bank account, which should prevent the problem recurring.
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