dickytim:Ragnor: Punishing bad customers is good if they reward or can reduce costs for good customers as a result.. but knowing Telstra Clear good customers won't see any benefit.
That is a "legal" way to penalise late payers, I seem to remember our electricity pill had a "prompt payment discount" and it was significant as well.
I think the "prompt payment discount" works far better than adding a flat rate penalty fee. Although the end state is often the same, a "prompt payment discount" just feels nicer.