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Electronic payments could close more POs

PUBLISHED: 06:06 17 February 2003 | UPDATED: 16:18 24 February 2010

A UNION official has warned more post offices in the region could go out of business due to the Government's handling of the new electronic payments system.

A UNION official has warned more post offices in the region could go out of business due to the Government's handling of the new electronic payments system.

From April, pensions and benefits books will be replaced by electronic payments – where money either goes directly into a bank account or into a new post office card account.

But it was claimed last night the Government is "arm-twisting" people into opting for the direct bank payments.

Benefits and pensions transactions form an estimated 40% of a post office's business – and sub postmasters fear unless many people opt for the post office account, they could face widespread closures.

Jon Richardson, eastern regional secretary of the National Federation of Sub Postmasters, said: "We would be looking at a tremendous number of closures."

The Government is reforming the system to cut administration costs and clamp down on fraud.

Letters are currently being sent to people asking them which method of payment they want to the choose – and it is the alleged prominence given to the bank system that rankles with sub-postmasters.

Mr Richardson said: "When they wrote to people on child benefit, the letters asked for their bank account details. It was not until the very bottom of an accompanying letter that it said if people wished to keep on at the post office they had to ring a number at the Department of Work and Pensions."

Mr Richardson said in areas where trials had been run the take up of the card account had been very low.

He warned that when the transition to electronic payment of pensions begins the situation could become a lot worse.

He has spoken of his concerns to Ipswich Labour MP Chris Mole in the hope that the Government will make access to post office card accounts easier.

Mr Mole said: "Sub-postmasters believe people are being arm twisted into direct payments in the bank and I just want to make sure people are given a fair chance.

"They are asking for a level playing field to make sure people know that the post office card accounts are available.

"The questions I will be asking ministers will be to ensure that the call centres and letters do equally stress the availability of all the options so people understand the choice they are making."

Bury St Edmunds Tory MP David Ruffley accused the Government of deliberately promoting the bank account route because it was a cheaper option.

"We want post office card accounts to be promoted fully and with maximum advertising," he said.

"It's a disgrace that the Government is deliberately not promoting it. It's the only solution to help save post offices in Suffolk."

A spokeswoman for the Department for Work and Pensions said: "As part of the modernisation of the Department customers are becoming more and more used to direct debit payments via bank accounts or post offices in today's business transactions.

"The Department is bringing its business in line with these current practices.

"The Department does not advocate bank accounts above post office card accounts but has given options to each customer.

"We apologise if these options are not made clear and will review our current practices to serve the needs of customers."

The spokeswoman said the Government was investing heavily in post office services and did not advocate that customers make a preference for bank accounts.

"The customer will need to make an informed choice with the information provided and take into account their own personal needs," she added.

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