Fee gouging tactics !

Yesterday,the High Court dealt the banks a massive blow when it found in favour of a class action to recover extortionate fees levied by banking institutions for late payments, breaching credit limits and dishonouring cheques.   The fees charged were way out of line to the actual costs incurred by the banks.

This is fast opening up an interesting can of worms whereby all manner of service providers are now imposing a fee for customers who do not pay their bill by the demand date.   These " fines " are a lot less severe than the arbitrary imposts used by the banks, but they raise the question of whether a service provider has the legal right to impose such a fee.

It all seems to boil down to the presence of a contract.  If at the time of accepting a business arrangement the supplier and the customer agree to a set of conditions - this can then be defined as a " contract " because it will have clearly stated what will happen if certain deadlines are not met.    It seems to be universally understood that this need not be signed by each party, but it must be stated at the time that providing the service is agreed.

On that basis, late payment fees for telephone services and many other commercial activities are probably legal.  It would not be legal to simply add a fee without negotiating a new " contract " with the customer.

We are now moving into new territory in the realm of electricity supply.   Some providers are seeking to attract customers to switch to their source of supply by offering a rebate on the amount charged - and i n some cases an additional discount applies to paying the bill by the date nominated.

This is creating confusion.   The due date and the amount owing appear in bold type on the top of the bill.   Underneath - in smaller type - is a secondary amount owing - if the bill is paid by the due date to attract this secondary discount.

It seems inevitable that some people will make the mistake of paying the full amount, despite qualifying for the discount by paying on time, and that will lead to interesting results.   Theoretically, this missed credit should reappear on the next bill.   That will depend on the company's computer system being adjusted to matching the date paid with the billing requirement - and acting accordingly.

Having optional due amounts will also require those handling EFTPOS payments at agencies such as post offices to change their method of handling payments.    If the customer does not clearly indicate the amount to be paid, does that service employee have a responsibility to pay the correct amount, taking into account the options involved ?

Yesterdays High Court decision will certainly cause the entire spectrum of fees and charges by all sections of commerce to come under the microscope.   The fact that the banks may have to repay $ 220 million to customer accounts is a very good reason for all fines and incentives to get an examination to make sure they fall within the framework of the law.   To ignore that responsibility - could be costly !