Unfair University Fines?

wizz_darlo

Hi,

I am a recent graduate from Loughborough University.

The University charged me a £50 "administration fee" a few months ago because I got my dates mixed up and a direct debit for accommodation didn't go out of my bank due to insufficient funds.
The bank charged me £39 as a result but later refunded the money as a "gesture of goodwill".

The money was paid to the University in full only a couple of days later. So I don't think it is fair to charge a skint student £50 for something which can hardly have cost the Uni very much at all.

In my mind this goes along the same lines as bank charges.
Does anyone think I have a case for claiming the money back from the University?

melancholly

i guess the uni could argue that it's a different thing to bank charges - they expected the money from you to be able to pay someone else, so they needed to get the money from somewhere else..... i think £50 is pretty expensive and unecessary though - but i'm just not sure the bank charges logic applies.

Broke_Student

In my opinion it is not unfair for the University to fine you for a bounced direct debit. The bounced direct debit will have incurred extra administration for the University if you had not made prior arrangements with them. These costs should rightfully be passed on to you. The policy on handling of non-payment was probably given to you before you signed your tennancy agreement and you may well have signed a contract agreeing to this.

The level of the fine is however subjective and I do think that a £50 fine is unfair.

To make a comparison, the policy at my Uni is:
- £15 admin fee on bounced cheques, missed standing orders and card transactions which are not authorised. They do not do direct debits.
- Further interest charges of 2% above base rate charged daily unitl payment is made.
- I do not believe you get hit with the initial £15 admin fee if you usually pay by credit card, debit card, cash or direct bank transfer. Just the interest.
- No charges or interest if you make prior arrangements.

My policy seems very fair to me and based on it I would say that you have reason to claim some of the £50 'admin fee' back.

I would totally agree that same logic behind claiming back bank charges applies - £50 is not a true reflection of their admin fee on the typical missed payment. Banks are by law not allowed to charge you an extra 'penalty'. The University may be able to do this but what they have said they have charged you is an 'admin fee' with no mention of 'penalty' so you should put this to them.

melancholly wrote: »

they expected the money from you to be able to pay someone else, so they needed to get the money from somewhere else.....

Must say I disagree with you here. What is this money that they 'needed to give to someone else' as soon as they recieve the OPs rent? They do have a pool of money and a large cashflow.
And did they really need to get the money from somewhere else? What if the OP decided to pay by cheque last minute. Would they have got a loan for a week whilst the cheque cleared?

melancholly

Broke_Student wrote: »

Must say I disagree with you here. What is this money that they 'needed to give to someone else' as soon as they recieve the OPs rent? They do have a pool of money and a large cashflow.
And did they really need to get the money from somewhere else? What if the OP decided to pay by cheque last minute. Would they have got a loan for a week whilst the cheque cleared?

i'm just putting across what their viewpoint will be! most unis actually have a very small separate pots of money for different things and they have a lot less money rolling around doing nothing than you'd atually think! the bank provides you with a service for your money, whereas for university accommodation you are paying them for living there. it does seem to be a different type of thing to bank charges, but that's just my opinion!

EDIT: with the banks, the issue is that an automated process of sending you a letter when something goes wrong costs very little. if universities require more time to be spent on that, and individuals to check, then they could argue that a much higher administration fee is appropriate.

i'm not saying it's fair or defending the university btw - where i am at the moment, if you register late you pay graded fines. that's nothing to do with admin charges at all as it clearly takes the same amount of time whenever you register, but they like it all to be done at once so the fines go out. register a day late and pay £50 seems excessive, but if they made it a lower fine, people wouldn't care!

Stubert

Have you actually graduated yet? i.e. got the certificates and what not? Surely if you have got all that you needn't pay it back technically as you've got your degree from them as they've got nothing to hold against you. Unless they passed it onto a debt collection agency or something.

wizz_darlo

Stubert wrote: »

Have you actually graduated yet? i.e. got the certificates and what not? Surely if you have got all that you needn't pay it back technically as you've got your degree from them as they've got nothing to hold against you. Unless they passed it onto a debt collection agency or something.

Yeah, that's a good point. I have paid the fine already however. The reason being, that the University's regulations state that I would not have been able to graduate if I had outstanding debt.

Voyager2002

Broke_Student wrote: »

Must say I disagree with you here. What is this money that they 'needed to give to someone else' as soon as they recieve the OPs rent? They do have a pool of money and a large cashflow.

Unlike banks, universities run at a near-loss and in fact are in the process of "going bankrupt slowly". This kind of late payment will have disrupted cashflow and may have meant that the university incurred bank charges.

devils_nose

Voyager2002 wrote: »

Unlike banks, universities run at a near-loss and in fact are in the process of "going bankrupt slowly". This kind of late payment will have disrupted cashflow and may have meant that the university incurred bank charges.

I have to agree with this, a lot of local authorities run their accounts as close to zero as they can to take advantage of the borrowing and lending markets - I see no reason why universities wouldn't do this aswell (albeit on a smaller scale) to make the most interest they can out of every penny they receive. If lots of students default (and I would assume they do) then it can end up costing the university lots of money.

melancholly

devils_nose wrote: »

I have to agree with this, a lot of local authorities run their accounts as close to zero as they can to take advantage of the borrowing and lending markets - I see no reason why universities wouldn't do this aswell (albeit on a smaller scale) to make the most interest they can out of every penny they receive. If lots of students default (and I would assume they do) then it can end up costing the university lots of money.

i don't think universities do it intentionally (at least where i am i know there is a finanical crisis on the very near horizon)!!! often most of their wealth is in land and buildings so there isn't much money in the bank.