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Topic # 201904 9-Sep-2016 08:29
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I happened to pay my mobile bill late, thanks in advance to all those people who are about to say 'pay it on time and it won't be a problem, cheers got that'.

 

The bill was paid before the next one arrived however obviously not soon enough to escape the dreaded late fee.

 

What I noticed shocked me $18.40 late fee on a $59.95 account, that's 30.6% interest per month, surely this couldn't be considered reasonable cost recovery on such an amount - they make pay day loan companies look like the good guys.

 

If you were a perpetual late payer you'd pay $220.80 just in late fees per year.

 

So I've solved the problem by moving to Skinny Direct and while in a round about way Spark will still get some money they've halved their ARPU so well done Spark.


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  Reply # 1626337 9-Sep-2016 09:32
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Yes its excessive , and something the Commerce Commission should look into. This is just revenue gathering, it costs spark
a few $ (if even that) to auto generate a late payment notice
Perhaps a complaint to the commerce commission is warranted here. 

 

Take note spark, and others , the below is over CC late fees, but the message is very clear
" charging this level of fee were generally generating profit in addition to recovering the actual costs of late payment"

 

http://www.comcom.govt.nz/the-commission/media-centre/media-releases/2010/commerce-commission-advises-industry-on-credit-card-late-payment-fees

 

 


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  Reply # 1626349 9-Sep-2016 09:47
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Whilst it seems excessive to most people (and it is) there are customers of theirs who never pay their bill on time, always in collections and are generally bad customers. This fee is aimed towards them and to pay for the collections officers who have to deal with them who wouldn't have to exist if people would pay their bill by the due date. You'll be surprised with how much this actually costs Spark (from memory, the fees charged only just pay the wages of the people in collections / recoveries).

 

Another concept to this is the "Prompt Payment Discount" most power retailers have. Sometimes the discount is in the margin of 10-30% of your total bill but essentially this is just another late payment fee. It is amazing how much of a stir it can be caused by calling it something else. If Spark + other telcos were to charge the same excessive fee calling it a "Prompt Payment Discount" I am sure they wouldn't get any backlash but being a telco and having to have up-front competitive pricing they're not in any position to call it that.

 

There are many places employing this strategy of billing. Really the thing that angers most people is what Telco's call it.





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  Reply # 1630216 14-Sep-2016 13:24
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michaelmurfy:

 

Another concept to this is the "Prompt Payment Discount" most power retailers have. Sometimes the discount is in the margin of 10-30% of your total bill but essentially this is just another late payment fee. It is amazing how much of a stir it can be caused by calling it something else. If Spark + other telcos were to charge the same excessive fee calling it a "Prompt Payment Discount" I am sure they wouldn't get any backlash but being a telco and having to have up-front competitive pricing they're not in any position to call it that.

 

There are many places employing this strategy of billing. Really the thing that angers most people is what Telco's call it.

 

 

Yes, it's interesting how framing it as a PPD, has a psychologically different effect than calling it a late payment penalty.

 

IMO real estate agents leverage this technique having their fees deducted from the sale prior to depositing the money into your account. I suspect that if we had to write a large $40K cheque to them subsequent to the funds appearing the in account, questions might be raised. Anyhow, a bit OT.

 

 

 

 

 

 


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  Reply # 1630228 14-Sep-2016 13:37
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They may have a debt loading fee, say $15, and the rest in interest? It is very expensive to a company when a customer doesn't pay on time, as it has knock on effects within a company. All the late fees should be stated in the terms you agree to. But usually a company will waive it if it only a few days late.


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  Reply # 1630233 14-Sep-2016 13:42
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Yes its excessive , and something the Commerce Commission should look into. This is just revenue gathering, it costs spark
a few $ (if even that) to auto generate a late payment notice

 

 

 

 

That is an assumption. But they would have infrastructure involved with that, as well as staff to pay who solely deal with late payers. Someone has to pay that, and I would prefer that it was late payers instead of it being shared across all those customers who pay their bill on time. And no I don't work for Spark / Skinny, but I am a customer who pays on time as it gets paid via the Farmlands card.

 

Percentage wise it sounds a lot, but if the overdue bill was say $500, the percentage would likely be far smaller, as I suspect there are fixed costs involved. 


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  Reply # 1630246 14-Sep-2016 13:55
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They charge huge fees and have lame systems about telling you that you have missed a payment. When I was last on plan with spark it was an automated phone call from a blocked number, so therefore blocked on my handset and a letter that took forever to arrive. No SMS, no email.

 

Perhaps that has changed if they have got out of the 1990s for technology but it was a joke which is why since I was back from overseas, I just changed back to prepay, and since the easiest way with spark to change to prepay is to move telco, that is what I did.





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  Reply # 1631513 16-Sep-2016 08:50
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There's no reason I can see why the fees can't change with frequency of late payment.

 

ie do it once in 12 months - no charge (coz we all forget sometimes/go on holiday/dog eats bill etc)

 

Do it twice and the fee the second time is $x

 

Do it 3 times and the fee is $x + y etc.

 

Can't imagine it would be too hard to make a computer deal with that....






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  Reply # 1631525 16-Sep-2016 08:53
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Not a lawyer....

 

Now if I have this right these late fees are supposed to in law reflect actual loss or expenses so if they had a graduated late fee regime it would be very hard for them to prove actual loss. 





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  Reply # 1636028 19-Sep-2016 18:56
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It doesn't seem too unreasonable.

 

https://www.spark.co.nz/help/billing/paymybill/late-payment-fee/

 

 

 

 

 

 

 

Geektastic:

 

There's no reason I can see why the fees can't change with frequency of late payment.

 

ie do it once in 12 months - no charge (coz we all forget sometimes/go on holiday/dog eats bill etc)

 

Do it twice and the fee the second time is $x

 

Do it 3 times and the fee is $x + y etc.

 

Can't imagine it would be too hard to make a computer deal with that....

 

 

 

 

It would be an administrative headache, and of course people would complain about this being unfair etc. It'd be a headache for everyone involved.

 

 

 

Personally, I set up automatic payments with just a few extra dollars per week so I am always running in credit in case something should go wrong. 

 

 

 

 


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  Reply # 1636044 19-Sep-2016 19:10
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Like any expense in running a business, the LPF is no different. Its the costs of collections as Michael stated. Its one of many many expenses. From the consumer POV, it sits on the bill. The business could hide it, and build it into the product price, but that would not be legal, and it penalises everyone. This way the business spreads the load to the causers of the cost. Its a pity if we missed a payment, as I have done (bugger, damn) but thats life. But you can't really extrapolate out one LPF as if it happened every month and the effective interest rate.


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  Reply # 1636052 19-Sep-2016 19:21
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How many times in reality does a Direct Debit go wrong? There's always an invoice stating the amount before the due date.

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  Reply # 1636053 19-Sep-2016 19:23
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MikeB4:

 

Not a lawyer....

 

Now if I have this right these late fees are supposed to in law reflect actual loss or expenses so if they had a graduated late fee regime it would be very hard for them to prove actual loss. 

 

 

The concept is called Liquidated Damages.

 

Spark *could* get themselves in trouble here if the amount they charge is in excess of the actual and reasonable loss they suffer from the late payment. And you can't just average it against all late paying customers, and you certainly can't use it as a punitive measure to encourage on time payment. If someone is a serial late payer, or collections needs to be involved, the late payment charges can increase accordingly.

 

The problem is proving it's unreasonable. It's not worth taking them to court over sub $20, and even if you did, they would likely be able to come up with some story as to why it costs them this (even if it's heavily inflated, which it almost certainly would be).

 

To the OP - If you have a genuinely good reason why you didn't pay on time, and you're an otherwise good payer - ask them to waive it as a once off and they may oblige. I got a $15 late payment fee from Vodafone AU earlier in the year when my credit card was cancelled by the bank after a fraudulent charge on the same day my automatic payment for my mobile bill was due. I had paid the bill manually a few days later when I got my replacement card, but when I saw the charge on the next bill I rang them and explained the circumstances and they were more than happy to credit me given I had already paid the bill and had an otherwise perfect record.





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  Reply # 1638460 22-Sep-2016 01:08
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They could have done what power companies do: give you discount for paying on time.





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  Reply # 1638462 22-Sep-2016 01:19
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Geektastic: They could have done what power companies do: give you discount for paying on time.

 

or they could just charge you extra for paying late

 

all in all you still pay the same if you pay on time


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  Reply # 1638796 22-Sep-2016 15:13
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Geektastic: They could have done what power companies do: give you discount for paying on time.

 

Indeed they could, but doing so would push up the headline prices for all their services accordingly, and would make them look more expensive vs competitors.

 

 

 

Reminds me of the good old days when Visa/MC prohibited merchants from charging extra to accept credit cards (enforced through merchant agreement not law), and business would get around it by offering a 'discount for cash' which in effect amounted to the same thing.





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