Don't pay late payment charges - I don't!

wolftom2001

"You don’t have to pay the “late payment” fee that credit card companies charge."

Not my words, I was told by a barrister (and on reflection, 50 per cent of them are wrong when they come up before the beak).

However, today I tried it, and it’s true: credit card companies know that they can’t make these charges stick.

I got my two credit card bills, where I had one card with a large (recent) sum added on a very small sum (around £60) plus another card with about £50 outstanding. On both there was also a “late payment charge” of £20. Part of the reason I was late in paying was that the Barclaycard site wasn’t working, again. But that wasn’t the justification I was going to use for refusing to pay the late payment.

So I phoned the Barclaycard people. “Hello,” I said. (Calm, polite, in control.) “I’d like to pay my balance, but I’m not going to pay your penalty charges.”

OK, said the man. Let’s go through some security questions… “now, you say that you don’t want to pay the late payment charges. These are applied for being late with a payment.”

So I see, I said, but they’re not enforceable. You, Barclaycard, haven’t incurred the costs you’re levying here; my missing this payment by a day or two does not add up to twenty pounds of costs for you. It’s not enforceable - it’s an unfair contract term.

He said that they had to levy these charges, that they were averaged for everyone, and there was a whole department for dealing with late payments. Well, I haven’t heard from them, I said. You haven’t had to write me a solicitor’s letter. You haven’t had to get bailiffs in. Charge the costs to the people to whom you have to do those things. There’s no reason to levy these costs on me. (I stopped short of saying “It won’t stand up in court” because that might seem like tempting fate.)

We both stayed polite and calm (which is a key thing in dialogues like these: if you get angry, they win and will make your life hell). But, he said, your bank charges you for an overdraft, and they’ll send you a letter and charge you for it. (This was where he was really beginning to stretch it; for a bank, dealing with an overdraft and *writing a letter* counts as exceptional, whereas the credit card companies simply whack a charge on your next bill.) Well, I’ll speak to my bank if it tries that, I replied. But it’ll be between me and the bank.

It was just getting tothe point where I thought we were going to have to go around the buoy again, with me saying “unfair contract terms… not justified by your costs…”, when he abruptly seemed to decide he had better things to do, because he said “I see you’ve been a customer for some time now.. so we’ll forgive [it might have been some other word, like ‘waive’, but I don’t recall exactly] the late payment charges.” A small troop cheered in my heart. And so I paid up the fair balance of my cards, including the ridiculous interest (and there’s another story..).

So, learn from me: you too can do it. Ring them up (don’t bother with letters; too slow, not interactive enough). Be insistent; it’s about the contract being unfair. Let 'em have it!

dchurch24

It's also about punitive charges, which are not enforcable in court for a breach of contract. A late payment is a breach of contract.

I have sued Abbey and Smile on this legal basis, and they have both coughed up charges that I had paid, plus interest (8%APR for each charge).

No_6

I don't pay "late payment fees" either !

All my payments are done by Direct Debit,
either in full or minimum payments.

No hassle, No charges, No phone calls.
No keeping calm. etc etc

No contest !

Regards
No 6

JoseChungsDoomsday

I'm by no means trying to be awkward here, but it baffles me as to why you sign a contract knowing that a company has these practices and enforces them?

It seems strange that since a court of law declares that punitive charges are not enforcable why these companies STILL manage to charge them?

In my opinuion if you miss a payment you should cough up for the fee (unless you couldnt for health reasons). I don't hold anyone else to higher standards than I hold myself. At a time of telephone and internet banking, there really is no reason to miss a payment date.

dchurch24

Oh trust me, there are plenty of reasons outside of your own control. I am an educated and reasonably intelligent person - I earn very good money and have done so for over a decade. At one point I had several streams of income, and yet, Abbey still managed to take nearly £1500 from my account in these punitive charges.

It seems strange that since a court of law declares that punitive charges are not enforcable why these companies STILL manage to charge them?

Not one bank (to my knowledge) has appeared in court to test the legalities. They all pay up, in full, with costs and interest usually before a court date is set.

The key is in the phrase 'not enforcable'. If you pay up, no law has been broken. If you challenge the charge in court, it will not be enforced.

zeddy_2

Can I ask, what happens if you have paid these charges in the past (by paid I mean not had a choice because they appear on your statements and become part of what you owe or part of your current account) becuase you didn't know that these charges were unenforceable? Can you still get them back?

dchurch24

Yes, for up to 6 years after the money has been taken from you.

gkf

I wouldn't fancy taking on this discussion with an indian call centre though!!

zzzLazyDaisy

I went overdrawn by one day (my fault, forgot to shift funds from savings account to cover excessive christmas spending!). Sod's law, that one day was the day the DD for my CC bounced.....

I got hit for £30 by the bank and a massive £83 by the CC. I wrote to them using one of the letters that are floating around the internet, and yesterday got calls from both the bank and the CC company confirming that all charges had been refunded to my account.

Fantastic!

[edit: Should add that before I discovered this site, I would have probably cried for a bit and then accepted my fate. Not any more! Thanks Martin!!!]

dchurch24

I don't think it'll be too long before we see the back of these types of charges.

sylwright

I have just had an argument with Nat West Credit Cards as I had a large purchase in the previous month and paid the full amount online from my bank on the 9th November, the payment date was 10th November but they say the payment didn't reach them until the 11th November so they charged me almost £40 in interest. When I phoned to query this their attitude was one of "tough".

The same thing had happened to me 2 months ago when I missed the payment date by 1 day and the man I spoke to that day said, "I've looked back through your account and notice you almost always pay the full amount so these charges are discretionary and I will refund the charge". This time I asked to speak to a manager who was very rude and patronising who told me because I had the charges refunded to me once, they wouldn't do it again as they only do it once every year.

I was not very happy, I accept that my payment reached them one day late, but in fact it was taken from my Nat West bank account 2 days earlier so they obviously had it anyway.

I have complained to NatWest Bank who were equally unsupportive telling me that they are just obeying the rules.

I have told them that I intend to cancel the card which I couldn't do over the phone as it is in my husbands name and I am an additional cardholder.

I am about to write a letter to cancel the card because of this and wonder if anyone can suggest anything I could do or say.

Thanks