Excessive Account Cancellation Charge

supastar42

A company provides me with online card payment processing and they charge, nominally, 5p per transaction. But you pay a minimum monthly charge of £20 plus VAT.

I wish to close the account and they want 3 months payment according to their terms and conditions etc. etc.

This cost must cover the cost of closing the account so it must be excessive and therefore illegal.

Is this a fair approach?

Bossyboots

This is not the same as the bank charges scenario which involves the issue of being penalised for breach of contract. In that situation the penalty can only reflect the costs to the bank of the breach.

In your situation, you are being asked to pay a contractual sum which you have agreed to at the outset. Unless it specifically says in your contract that the exit cost will only reflect the cost of closing the account, then they are within their rights to seek to enforce the contractual amount of three months payment.