Eircom should revisit it’s accountancy practices as some of its customers have "probably been penalised," the Consumers' Association of Ireland, CAI, said today.
The consumer group's comments follow an article in today's Irish Timesquoting the Revenue Commissioners as saying the company's method of applying a new VAT rate was incorrect.
CAI Chief Executive, Mr Dermot Jewell said Eircom’s billing methods have "generated an element of distrust" among consumers.
Eircom has strongly rejected criticism of it’s application of an increased VAT rate saying the company had been "consistent and fair".
The standard VAT rate increased from 20 to 21 per cent on March 1st. Eircom charged the new rate on telephone bills issued since March 1st, though telephone call charges were accumulated before the new VAT rate was introduced.
Customers receiving a two-monthly Eircom bill issued on March 7th were charged 21 per cent VAT on calls made from January 6th to March 4th.
The CAI Chief Executive said protections had to be put in place now to make sure that Eircom's method of applying the new VAT rate did not penalise the consumer any further.
Yesterday, Eircom said it had acted correctly, saying that when the VAT rate was reduced by 1 per cent in January 2001, customers benefited by having the lower VAT rate applied to calls made during the period of the higher VAT rate. The company claimed this had "neutralised" any potential losses.
Mr Jewell said while this may have shown consistency in Eircom’s method of billing it did not take into account individual customers levels of usage for the separate periods.
He said it was likely that some Eircom customers had been penalised because of the practise and if their was "any possibility at all" of this happening their billing methods should be reviewed.
Asked if some customers had benefited while others were penalised Eircom spokeswoman, Ms Majella Fitzpatrick, told ireland.comthe company "could not get into individual billing". She said to create "harmony over time you have to be generic."
Ms Fitzpatrick, added that "huge billing systems cannot easily be manipulated" each time there is a VAT increase.
Ms Fitzpatrick confirmed that the 1 per cent difference in the VAT rate would not be returned to customers.
The Office of the Director of Telecommunications Regulation said the application of VAT was a matter between Eircom and the Revenue Commissioners.
A Vodafone spokeswoman said yesterday that the company had a complex billing system and it was not possible to separate charges for calls made between one period and another at that time.
A Digifone spokeswoman said application of VAT on the invoice date and not the call date was the "standard legal method" for dealing with VAT increases and decreases.