Late fee 60% of the actual due what the?

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gzt

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#311547 25-Jan-2024 23:14

I recently appointed myself minister of finance. Then I missed a bill payment. To a well known telco. It's going to be three days late. Anyway I found the invoice I missed and it states approximately:

Paying on time means you avoid late fees of $19.99
Payment due $29.99

It will be next billing cycle when I find out. You might need to read that twice like I did. Is it over the top?

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#3186605 26-Jan-2024 03:03

I would ask what actual cost the late fee is covering.

Claims for damages need to be real and actual, not a made up number. It smells like a conveniently made up number.

nztim

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#3186611 26-Jan-2024 06:40

Telcos are a cut throat market so thats fair IMHO

$19.99 is probably the cost of the manual labour to chase people.

Just looked mobile bill T&C and the late fee is the same regardless of the bill amount so just pay on time :)

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Handle9

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#3186614 26-Jan-2024 07:04

nztim: Telcos are a cut throat market so thats fair IMHO

What does a cut throat market have to do with claiming for damages?

Private companies can’t issue fines, they can only claim for actual losses.

mudguard

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#3186702 26-Jan-2024 09:29

I suspect it's a standard fee
It doesn't sound like an unreasonable amount. It's just unreasonable in that the OP's invoice is quite low. My brother has some extraordinary monthly bill as he has all of his family on one bill, plus phones being paid off etc. So $20 as portion of his bill is probably minimal.

jonb

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#3186708 26-Jan-2024 09:48

Three days late probably they won't charge a late fee, find it is often not picked up by companies if paid before the next invoice is created.

Example I often forget to pay my credit card bill until a few days after due date, seems like has 3-5 days overdue before charges interest etc.

richms

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#3186738 26-Jan-2024 10:29

I have had the same from one and missed by a few days often and never had the fee charged. I suspect it would get added if you get to the next invoice and have not paid it.

Started paying manually since they charge a card fee so they can get stuffed with that.

Richard rich.ms

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#3186742 26-Jan-2024 11:16

The cost of recovery of $20 and $200 are likely the same. I imagine there would be a minimum cost to start a recovery and $20 doesn't fall outside of reasonable in that regard. That's around 40 minutes time of a reasonably paid qualified person.

I agree it looks fairly confronting on a small invoice though.

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bagheera

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#3186744 26-Jan-2024 11:23

gzt: I recently appointed myself minister of finance. Then I missed a bill payment. To a well known telco. It's going to be three days late. Anyway I found the invoice I missed and it states approximately:

Paying on time means you avoid late fees of $19.99
Payment due $29.99

It will be next billing cycle when I find out. You might need to read that twice like I did. Is it over the top?

so seek say a payroll officer which would be the skill set mostly of the person dealing with overdue invoices is 70 - 85k - so at 70k we are looking at 33.65 per hour - take of 1.70 for postage, we looking at about 1/2 hour labour cost - sounds about right.

KiwiSurfer

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#3186750 26-Jan-2024 12:00

jonb:

Three days late probably they won't charge a late fee, find it is often not picked up by companies if paid before the next invoice is created.

Example I often forget to pay my credit card bill until a few days after due date, seems like has 3-5 days overdue before charges interest etc.

I suspect part of the reason for that is they realise some people may pay from Bank A on the due date but the payment isn't processed (for whatever reason) by Bank B until say 1-3 days after the due date (e.g. due to overnight processing, public holidays, etc). Having a soft deadline about 3 days after the due date I guess reduces the hassle of having to reverse late payment fees for customers who dispute the fees due to it being paid on time on their side.

Generally if I see I've forgotten a payment I just pay straight away and usually if it's only a few days late it's all good.

eracode

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#3186751 26-Jan-2024 12:01

bagheera:

so seek say a payroll officer which would be the skill set mostly of the person dealing with overdue invoices is 70 - 85k - so at 70k we are looking at 33.65 per hour - take of 1.70 for postage, we looking at about 1/2 hour labour cost - sounds about right.

I doubt that would be covered by the role of Payroll Officer - more likely a Credit Collections Clerk. The numbers would probably be a bit lower but the logic is the same.

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l43a2

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#3186760 26-Jan-2024 12:24

gzt: I recently appointed myself minister of finance. Then I missed a bill payment. To a well known telco. It's going to be three days late. Anyway I found the invoice I missed and it states approximately:

Paying on time means you avoid late fees of $19.99
Payment due $29.99

It will be next billing cycle when I find out. You might need to read that twice like I did. Is it over the top?

It wouldn't hurt to ask them to remove it if you have a known good payment history with this company.

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#3186763 26-Jan-2024 12:37

eracode:

I doubt that would be covered by the role of Payroll Officer - more likely a Credit Collections Clerk. The numbers would probably be a bit lower but the logic is the same.

If it's being looked at by a human while less than a week overdue says more about the cashflow of the company than the customer.

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#3186784 26-Jan-2024 13:15

I worked for a medium-size outsource service provider in the late 90s which did a lot of on-site IT support for several hours a month or week for small-medium businesses. The admin person would typically spend 2-3 days on the phone each month chasing overdue debts. That's a significant cost.

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Handle9

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#3186922 26-Jan-2024 15:38

bagheera:
gzt: I recently appointed myself minister of finance. Then I missed a bill payment. To a well known telco. It's going to be three days late. Anyway I found the invoice I missed and it states approximately:

Paying on time means you avoid late fees of $19.99
Payment due $29.99

It will be next billing cycle when I find out. You might need to read that twice like I did. Is it over the top?

so seek say a payroll officer which would be the skill set mostly of the person dealing with overdue invoices is 70 - 85k - so at 70k we are looking at 33.65 per hour - take of 1.70 for postage, we looking at about 1/2 hour labour cost - sounds about right.

In a company with any size the reporting and follow-up will be entirely automated until it is extremely late. If there’s 30 minutes of labour involved the company is incompetent.

gzt

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#3187045 26-Jan-2024 19:53

Likewise in this case I'm guessing the full extent is an automated database update and a text message.

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