Late payment fees

[cscoxk]

Telstra have charged me $15 for being late with a payment.  Will Telstra pay me $15 for being early?  Surely it is unreasonable to charge $15 for being a few days late on an invoice of $100.  I believe the recent case on excessive bank fees on penalties makes this a situation where a class action is likely to succeed against Telstra.  Suggest they fix up their penalty nonsense before they are taken to court.

It would not be so bad if they had warned me before charging. How much does it cost them to send me a reminder by sms by email before imposing the fee.

[jokiin · Accepted solution]

if the bill was $1000 it would still be a $15 fee for late payment

[gerdschenkel · Accepted solution]

If you'd like to take full control of your billing, incl receiving a bill notice email, it's best to sign up for MyAccount here https://www.my.telstra.com.au/myaccount/register This can help you paying on time and avoiding late fees

[jokiin · Accepted solution]

I just set mine up for direct debit, can't forget then

[Ben_F · Accepted solution]

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cscoxk wrote:

It would not be so bad if they had warned me before charging. How much does it cost them to send me a reminder by sms by email before imposing the fee.

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We remind you on every single bill that we have ever sent you.

And the others are right. Direct Debit is the way to go .

B.

[Kalak · Accepted solution]

Every bill includes a reminder on the front page.

http://i43.tinypic.com/6rli81.jpg

Back in 2000 when Telstra introduced a late payment fee (then at $5) it was estimated to cost them in the area of $180 million a year, or around $36 per late paid bill.  This includes costs such as their inability to utilise those funds, potential lost interest, the cost of running credit management teams etc. 

So even if we use a figure that is 12 years old now, the late payment fee is still less than half the 'cost' of you paying your bill late.

As suggested you can use online services to set up bill reminders, and there is always direct debit.  The bill is issued a few weeks before the debit is due, giving you plenty of time to query anything that you don't understand/agree with before the money comes out.

[shell020485]

I Know Telstra has a responsibility to shareholders, but I am sure in their record profits they factor in late payments, and I too receive late payment fees of $15 inconsistently mind you on bills of $100.00, no reminder. The reminder might come on the next bill, but by that time I have already paid my previous bill and am still charged late payment fee. Also, reasons do relate to my address of 44A not 44, and previously have had mail not delivered, and have too previously been registered to receive bills online, but never logged on, too much time is spet on computers these days!!!!!! Then I checked eventually after telstra stuffup overcharging me late payment fees after funds paid were allocated to another telstra account, and when I printed one of these bills, found many more overcharges for calls that were supposed to be free, and spent more money phoning them and waiting for operators to pick up to rectify the problem which I grew tired of trying after multiple attempts, and to this day, I have not received all of the paper bills I requested on multiple occassions. I just gave money away because I was tired of wasting my time. Next time, I will send them a bill with interest and late fees of course, and if i spend time on the phone, will bill them at my hourly rate + overtime for that too. 

[AussieBob]

Having been a Telstra customer for more than 30 years and have never been late in making payments, I was surprised to find on the one occasion that I was a few days late with payment, Telstra slapped on a $15 late payment fee.

Each Telstra bill indeed states, 'To avoid a late payment fee of UP TO $15.00 please pay by the due date.

This would appear to be an incorrect statement, who decides how much the late payment should be?,certainly there is no human involvement in this, it is just a computer generated bill, which cannot decide for itself, but can only do what it is programmed to do and it is programmed to add $15.

The response from Kalak about events back in 2000 is totally irrelevant today, The only cost to Telstra at this point, could be loss of interest on the amount owing, in my case that could be as high as $0.40, no other costs are involved, there has been no communication, no additional postage, so please tell where a $15 charge can be justified for a computer generated bill.

I have no intention of paying the $15, until such time as Telstra can justify in a fully itemised bill on the make up of the $15, if they are not prepared to do this, this, then they are welcome take legal action against me to recover this fee, just remember the current class action against the banks.

What Telstra have achieved however, is to lose my custom and that of my family, we will all be changing our service provider.

  Common Law

Common Law states that late fees cannot be punitive. There is no legal precedent to justify penalizing a person for being late on a payment. Late fees imposed by service providers are unenforceable but most people pay the late fees because it is more convenient to do so than object to paying the fee.Though in the case of a person not paying a debt on time, a business can apply a administration fee but that fee cannot be excessive but must be equivalent to the expense of collecting the unpaid money. It is clear that service providers are using late fees as a way of making money, not just recovering the cost of late payment. 

[Ben_F]

Welcome to CrowdSupport AussieBob.

Before I answer your post, I need to clarify that the statements made above were made whilst I was an employee of Telstra, but none of my statements represent Telstra. I'm also no longer an employee, hence the change in language

The Late Payment Fee used to be split into 3 tiers:

a) $5.00 if the amount outstanding on your bill after the due date is $65.00 or more but less than $130.00;
b) $11.00 if the amount outstanding on your bill is $130.00 or more but less than $200.00; or
c) $15.00 if the amount outstanding on your bill is $200.00 or more.

Currently, to simplify the process, the Late Payment fee is $15.00 if the amount outstanding on your bill is $100.00 or more.

Telstra invests a fair bit of money in its Credit Management Teams and Departments. These include:

- Cost for Maintaining both a Domestic and Offshore Call Centre for the purpose of Collections Action - This includes inbound communication and outbound communication. Without setting a limit, I know a 200 seat Australian Call centre costs about $1-2 million a month to operate.

- Cost of Providing notices to customers, either via Email, Phone, or Letter

- Cost of Maintaining Credit Management Systems

- Cost of Maintaining a Complaints team for customers who dispute their Credit Management Status

- Cost to Telstra of being unable to utilise the funds that are late

- Cost to Telstra in the sale of those debts, and cost to Telstra in the writeoff of those debts

To Compare Telstra with some other Service Providers:

- Synergy (WA Power Company) - $4.75 per overdue notice

- Optus - $15.00 for any amount between $50-$100, add 2% of the amount if its above $100

- Vodafone - $10.00 per month that the amount remains overdue

I'm sure that Telstra considers the late payment fee to be enforceable, and should you refuse to pay it, they do reserve the right to disconnect your services, which may incur Termination Fees, and to default list you with a Credit Reporting Agency. That being said, Telstra has been known to waive them if you have had an account for a long time and its an oversight.

I wish you luck in finding a service provider that:

a) Doesn't charge a similar fee or;

b) Doesn't insist on Direct Debit as a form of payment

B.

[Molsa190]

When did the new structuring for charges come in?  Last August I paid my account, however as an oversight I only paid $133 instead of the $133.16 (being the actual bill).  I still got charged $15 in late fees for not paying the full amount by 16 cents.  When I rung up to complain they told me they would reverse it this once.  I'm just interested why I would have been charged $15 as surely using the tiered structure it should have been less.

[userNT]

I totally agree with this comment a $15 late fee which was in excess of 10% per month is unjust. I cancelled my direct billing as for 6 months Telstra incorrectly overcharged on direct debit every month I had to argue a credit I was never copensated for over paying or tthe time & frustration it took. Its very musch a one way street with Telstra.

[userNT]

PS: all direct debit users please note that credit card payments are also considered cash advances, surely Telstra makes enough to accept visa card without penaly.

[pnut]

Hi,

I have noticed lately that a few businesses not just telstra have been having a grab for extra cash through late fees.

I personally was of the understanding that the fee would have to be inlign with inflation and a fair rate of the outstanding money. This would be a fee of 3% per annum or 30 cents per $100 bill upto 7% per annum or 70 cents per $100 bill on every $100 dollars. The cost of office staff and call centre would be assumed as the cost to do business. Considering that the outstanding amounts would be placed ontop of next bill issue there is no real need to notify the customers especially when only about 2.5 weeks has been given to pay the bill. A resonable fee could be incurred through a disconnection of service but that would be the extent of it to my knowledge.

Personally I dont like wasting my time complaining so I'll try to keep it short. If you guys can show me where you legally are allowed by Australian State and or Federal Law to charge a rate or 150% on  per anum on $100per bill late fees, I will promise to reside to the fact and not take legal action.

However if you cant supply a legal reference to support your fees, I will be putting together new website where a class action will be started and forthwith serving you with a notice to show cause. Being the good sport that I am I will wait for 2.5 weeks for a reply to this thread the same amount of time as your billing date.

Any assistance appreciated.

Raef Mackay

[NEWALDICUSTOMER]

Frankly I am over this late fee penalty and have voted with my feet . I moved to another povder who has no tie in contracts or any other fees.  You need to pay up front, but then the cost is a third of what I am currently paying for the same service.

I have move my three business mobile accounts. In fact the late service fee is almost  half the cost of the moths service for a mobile.

If you are out of contract the change over in easy and only takes about 15 min to complete the online application.

Telstra also unlocked my mobiles so I could use them on a different network free of charge all that was need was a call ask the automated service to unlock your mobile.

There is also no surcharge for paying with your credit card.

Both of these practices which can only be discribed as outrageous and a total rip  off, because you are tied into a contract you have to suck it up. The other issue is that all these large institutes have the same mentality.

I have my own business and if I imposed any of these practices on my customers, my customers would go else where.

I would encourage any body  who is unhappy with these practices to vote with their feet too.

In addition I have moved my foxtel back top foxtel and managed to negoiate a better deal than the current deal I had with Telstra. (Although I did need to upgrade my Foxel box which did cost me $75)