Forgot to pay an invoice for $160 in tuition fees which was due yesterday (14 day terms).
This morning, 10 hours after payment was due, I received an updated invoice with a $20 late fee added in.
I thought in legal terms late fees were supposed to reflect an actual and genuine loss occurred by the business. Is this true? If so, is $20 a reasonable charge?
I don't mind paying late fees but this seems more like a penalty to me.
Forgot to pay an invoice for $160 in tuition fees
Doesn't have to be actual losses incurred. What does your agreed contract or terms & conditions say?
this seems more like a penalty to me
That's the point of a late fee, no? As a penalty to encourage you to pay your tuition on time.
The bird
the worm
Pay the original amount of fees right away. Then follow up with a call to the school and explain you forgot to pay by yesterday but you are now fully paid. Ask for forgiveness and they "may" remove the fees. If they don't agree, then pay them another $20 and try to remember to pay on time next time.
I don't mind paying late fees
then pay it.
If so, is $20 a reasonable charge?
It is, when you agreed by signing up.
this seems more like a penalty to me.
It is exactly this….
Well if it is it may well be illegal under Australian Law and unenforceable.
And what do the terms and conditions say in regards to late fees? A laywer would have read the terms and conditions before signing up or arguing that it's illegal.
https://legalvision.com.au/late-payment-fees-legal-australia…
If you have not included details of the late fee in the contract, then you cannot choose to add this on at a later date.
To ensure that the penalty rate is enforceable, you must be able to prove that it was a genuine pre-estimate of loss and not just a punishment. Examples of loss due to late payments may include:
* additional time taken to chase up the payment; or
* the cost of paying outside help such as lawyers or debt recovery agents.Example 1
A business running a monthly food delivery subscription bills their clients after they have made the delivery. If a customer does not pay by the date stated on the invoice, then they will incur a $5 per week penalty fee. This fee is to cover the cost of the additional administration required to follow up on the late payment. This example is likely to be determined as fair and reasonable.Example 2
A separate food delivery business works under the same model as example one, except they charge $50 for every day that the payment is overdue. This example is likely to be determined to be a punishment and, therefore, would not be enforceable in court.
IANAL, but I think are SOL on this one.
Yep, penalty is the same as a punishment. No way $20 is a genuine cost to them.
@tranter: Minimum wage is $20.33 per hour…
EDIT: Have you even tried talking to the tuition center? Most places are reasonable… YMMV.
$20 is not unreasonable. It may take a staff member half an hour of time looking at your account and contacting you to chase the money up. Factor in their salary, on costs etc and $20 appears very reasonable.
Check bank account, send email would take less than 5 minutes.
Why bother arguing with the person giving you a possible reason then contact the tuition place?
You asked for our opinion but argue against it what's the point
Came for validation of confirmation bias, got cognitive dissonance.
And you can say this because you've personally worked for an educational institution?
I can say that it definitely does not take less than five minutes … as I work for an educational institution.
Why is it so time consuming?
@tranter: I don't know how your educational institution's financial department works, but it takes time to match the reference number of your payment to your account. Otherwise, your fees could end up paying someone else's account if they're not diligent.
@kerfuffle: Fair enough, I'll take your feedback on that. I still find it difficult to understand with all the streamlined technology commonly used in business today.
If that's a genuine, actual cost estimate for a relatively simple process I think the business may have bigger problems than overdue accounts.
@tranter: What will allow us to make a fair assessment on whether the late fee is reasonable or not is if you post the terms and conditions regarding late fees. Is there a reason why you've yet to do so?
@kerfuffle: I'll try to find the terms but it's really not relevant in regards to my points on genuine costs incurred. If terms and conditions contain unreasonable or illegal points they are not valid or enforceable.
@tranter: They are relevant. You agreed to those terms and conditions. If you found them unreasonable or illegal, you shouldn’t have signed up to your course.
@tranter: As I said, if you found them illegal, you shouldn't have signed up. Or lawyer up if you seriously find them illegal and take your educational institution to court.
@kerfuffle: Everybody has the right to agree to any terms and conditions presented to them, whether they are in fact illegal, unreasonable, or not — or whatever. The simple act of agreeing to them doesn't necessarily make them valid or enforceable.
@tranter: Then take your educational institution to court or your state's consumer affairs tribunal if you don't find them valid or enforceable.
When OP gets asked twice what the contract or terms and conditions says, yet doesn't provide said terms and conditions …
Can see OP comments above, the Karen-isms are being showcased…
$20 sounds like a cheap life lesson to me.
If you have a record of paying on time. Or just a new customer. Ask for a gesture of goodwill to waive the extra late fee. I find that works.
But obviously can't keep using that line.
Try giving them a call and see if they are willing to waive the fee this time. If you are nice enough on the phone they might be willing to waive the late fee. If not, just consider it a $20 life lesson.
Did you try to argue that ‘…it’s the vibe of it. It's the Constitution. It's Mabo. It's justice. It's law. It's the vibe and ah, no that's it.’
give it a rest
Thanks for comments everyone. No one has demonstrated how it costs anywhere near $20 to check for payment and send an auto-text email for overdue payment. Most software used in business makes this a simple task.
As someone referenced above, in regards to the law the amount should be a genuine estimate of loss. I'm not convinced that a less-than-half-a-day overdue invoice suddenly cost the business $20.
Anyway, I'll move on now. Won't be monitoring the thread any longer.
With credit cards, you can call up and ask for it to be waived - saying something went wrong with your payment, seems to work. Worth a shot