Interest on late payment (consumer)

Sandtree

lincroft1710 said:

Vizard said:

You can't contract away your statutory rights.

If their T&Cs mention interest on unpaid invoices and the amount is not unreasonable then that is not "contracting away your statutory rights". If there is no mention of interest they cannot arbitrarily charge it

Until it gets to court at which point 8%pa will typically be applied as per previous Gov link

Vizard

I suspect that their T&Cs DO mention interest rates. But given there is a prescribed rate for business debt, I would be surprised if businesses could charge consumers whatever they like.

I stand to be corrected obviously.

Sandtree

Vizard said:

I suspect that their T&Cs DO mention interest rates. But given there is a prescribed rate for business debt, I would be surprised if businesses could charge consumers whatever they like.

I stand to be corrected obviously.

There is a prescribed rate for debts going to court where the contract didnt otherwise contemplate one. As noted by the previously shared link this is 8%pa for anything not a commercial debt and 8%+BoE BR for commercial debt.

Where the contract did consider one that rate will apply unless the defendant can substantiate that it is an unfair contract term which generally means it has to be a punitive clause rather than in any way representing the cost of the breach of contract to the claimant. 

Vizard

Sandtree said:

lincroft1710 said:

Vizard said:

You can't contract away your statutory rights.

If their T&Cs mention interest on unpaid invoices and the amount is not unreasonable then that is not "contracting away your statutory rights". If there is no mention of interest they cannot arbitrarily charge it

Until it gets to court at which point 8%pa will typically be applied as per previous Gov link

This sounds feasible. I would be surprised if the rate that could be charged to consumers by a business would exceed that charged to businesses.

Sandtree

Vizard said:

Sandtree said:

lincroft1710 said:

Vizard said:

You can't contract away your statutory rights.

If their T&Cs mention interest on unpaid invoices and the amount is not unreasonable then that is not "contracting away your statutory rights". If there is no mention of interest they cannot arbitrarily charge it

Until it gets to court at which point 8%pa will typically be applied as per previous Gov link

This sounds feasible. I would be surprised if the rate that could be charged to consumers by a business would exceed that charged to businesses.

business can be charged more too... the statutory rate is only where the contracts don't state otherwise.

Looking at a recent invoice factoring contract the finance company would charge the company 0.5% for every 10 days the end customer is late paying the invoice which equates very closely to your 1.5% per month. Had the company factored the invoice to help with their cashflow it'd not be hard to show their charge to you is proportional to their losses and so not punitive terms.

user1977

Vizard said:

I suspect that their T&Cs DO mention interest rates.

You're the only person here who can read them..

Vizard

user1977 said:

Vizard said:

I suspect that their T&Cs DO mention interest rates.

You're the only person here who can read them..

Just checked and it says "up to 1.5%". They clearly are choosing to threaten the full rate.

As I suspected, however, I have received advice elsewhere that they can put what they want in their contract, it doesn't mean a court will award it. They have to demonstrate that it is a genuine pre estimate of their costs; which I doubt they can do. It must also not be a penalty.

Sandtree

Vizard said:

user1977 said:

Vizard said:

I suspect that their T&Cs DO mention interest rates.

You're the only person here who can read them..

Just checked and it says "up to 1.5%". They clearly are choosing to threaten the full rate.

As I suspected, however, I have received advice elsewhere that they can put what they want in their contract, it doesn't mean a court will award it. They have to demonstrate that it is a genuine pre estimate of their costs; which I doubt they can do. It must also not be a penalty.

And about a number of times here as well.

It must be proportional to the cost to them so if they've had to put things on credit cards or paid late payment fees to factoring companies etc then these could all exceed 1.5%. Cost can be done on an averaging basis too.

Vizard

Sandtree said:

Vizard said:

user1977 said:

Vizard said:

I suspect that their T&Cs DO mention interest rates.

You're the only person here who can read them..

Just checked and it says "up to 1.5%". They clearly are choosing to threaten the full rate.

As I suspected, however, I have received advice elsewhere that they can put what they want in their contract, it doesn't mean a court will award it. They have to demonstrate that it is a genuine pre estimate of their costs; which I doubt they can do. It must also not be a penalty.

And about a number of times here as well.

It must be proportional to the cost to them so if they've had to put things on credit cards or paid late payment fees to factoring companies etc then these could all exceed 1.5%. Cost can be done on an averaging basis too.

I won't go into details, but they won't suffer loss as a result of our withheld payment. Furthermore, they have confirmed in writing that we haven't received everything we paid for. Really it's about the quantum of the reduction.

I suspect most people just pony up the money when threatened.

Aylesbury_Duck

Vizard said:

You can't contract away your statutory rights.

True.  How does that help you, though?  Asking for advice whilst being evasive about the terms of the contract you entered into is an odd approach.