Not Bank Charges...But What Do Others Think?

We (as in my company) have a credit account with a large stationery store. When we didn't pay our account quickly enough the company added on £40 for 'Late Payment Charge'. Now I'm fully aware that companies can charge interest at a certain percentage for late payments, there is some kind of law about it. But this is a flat £40, much the same as banks charge £35 or £40 for telling you that you're overdrawn, and not a percentage of the o/s amount. Would this be a similar situation to the bank charges reclaim or is it different because it's a store that is charging us? I did claim back charges on a New Look card, similar situation, but that was administered by Ikano who I think are solely credit providers and not solely stationers. Any thoughts or opinions welcomed.

kessik
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Comments

  • Tozer
    Tozer Posts: 3,518 Forumite
    Is there an interest rate for late payment agreed (either your purchase order or their terms of sale)?
  • Sol00
    Sol00 Posts: 1,230
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    I'm not 100%, but I think that would come under the unfair T&Cs that the banks are currently appealing against.
  • esmerellda
    esmerellda Posts: 2,237 Forumite
    If the charge is dispropotionate to their costs of your breach of contract then its deemed a penalty and thus reclaimable. Its the same arguments as bank charges really but certainly not held up by the waiver. Have you contacted them about it first, in a you dont want to lose us as a customer, waive this fee please type way...if not same process as for anything else.
    LegalBeagles
  • bleepy
    bleepy Posts: 65
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    My advice would be not to pay it. Lots of companies try things like this on EG parcelforce charge you £20 if you are 1mm over their max size, a fee you dont know about until you fall foul to it, however 1 phone call gets this removed. At the end of the day you spend money with this supplier on a regular basis, call them up and explain your disappointment if they don't remove the charge just change supplier, its tough out there and there are loads of people selling stationary, i bet you could even save money if you shop around. In fact even if they do remove the charge id move anyway , who wants to deal with them after this?
  • Tozer
    Tozer Posts: 3,518 Forumite
    Sorry, not correct.

    If there is no separate provision made for the late payment of debt, then statute entitles the creditor to charge 8% above base lending rate of Bank of England and to charge fixed compensation (probably the £40 in this case) depending on the size of the debt.
  • kessik
    kessik Posts: 284 Forumite
    Tozer, thanks for that. We haven't been charged interest at any rate on the outstanding amount, just this £40 arrears fee. Can an organisation charge either one or the other (interest or flat fee) or should it be both? The outstanding (now cleared) was about £90 and was I think about 5 weeks late. However the arrears fee is £40 irrespective of the outstanding amount.
    Thanks for people's thoughts so far.

    kessik
  • Tozer
    Tozer Posts: 3,518 Forumite
    Hi Kessik. Its actually an entitlement to claim both. However, check the contract documents to make sure there is no other late payment provisions.
  • bengal-stripe
    bengal-stripe Posts: 3,349
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    That supplier is under no obligation to continue dealing with you; they can close your account and ask you
    to take your business elsewhere.

    Ask yourself the question, do you need them as suppliers more urgently than they need you as one of their customers?
  • Tozer
    Tozer Posts: 3,518 Forumite
    Any update on the interest point? Its important and may well get you round having to pay the £40.
  • Incisor
    Incisor Posts: 2,271
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    Tozer wrote: »
    Sorry, not correct.

    If there is no separate provision made for the late payment of debt, then statute entitles the creditor to charge 8% above base lending rate of Bank of England and to charge fixed compensation (probably the £40 in this case) depending on the size of the debt.
    Compensation is the key word here. It must be compensation linked to a loss, rather than a penalty for not complying. I think.
    After the uprising of the 17th June The Secretary of the Writers Union
    Had leaflets distributed in the Stalinallee Stating that the people
    Had forfeited the confidence of the government And could win it back only
    By redoubled efforts. Would it not be easier In that case for the government
    To dissolve the people
    And elect another?
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