City & Business: BSkyB's the limit

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The Independent Online
Wonderful things, direct debits. For the organisations that are paid with them, anyway. Customers may not be so lucky. They sign away merrily, permitting their bank accounts to be tapped by their electricity supplier, their favourite charity, whomever they authorise. The beneficiary can even change the amount, so long as it gives notice.

Most companies are scrupulous about the way they inform their customers about any change in the amount of the debit. I wish I could say the same about BSkyB. As we report on page 1, its notification of price increases from 1 October has hardly been upfront.

BSkyB, no fools they, have doubtless taken a commercial decision about this. Sure, they may lose a few subscribers, incensed about the price increase, which is as high as 43 per cent for the basic Sky package. A few more may cancel their direct debits if they feel they have not been fully informed. But the vast majority will do nothing. Inertia is a powerful tool in marketing. The price increases will add as much as pounds 97m a year to BSkyB's revenues.

BACS, the organisation jointly owned by the clearing banks which oversees direct debits, seems unconcerned. Its rules are so loosely worded that BSkyB can legally get away with burying the notification of its price increase and even then not telling people the actual amount they will be paying, merely the increase.

Direct debits only work because people trust the organisations using them to behave honourably. BACS must tighten its pathetically lax rules.

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