Hi.
A company I owe $ to (and cannot at the moment pay), advised they will
charge 5% per month service fee on the account.

Is this legal? Can they do this?

Thanks

Tony.

From:	Seppo Renfors
Subject:	Re: 60% PA Interest?
Date:	Sun, 23 Jan 2005 05:54:13 GMT

STEVE wrote:
>
> Hi.
> A company I owe $ to (and cannot at the moment pay), advised they will
> charge 5% per month service fee on the account.
>
> Is this legal? Can they do this?

Most definitely provided it is in their trading terms and conditions
you have been made aware off.

--
SIR - Philosopher unauthorised
-----------------------------------------------------------------
The one who is educated from the wrong books is not educated, he is
misled.
-----------------------------------------------------------------

From:	aussiefireworks at gmail.com
Subject:	Re: 60% PA Interest?
Date:	20 Jan 2005 21:45:24 -0800

Normal 30 day trading account.
They supply product on account, render statement .

From:	Sylvia Else
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 17:11:20 +1100

STEVE wrote:

> Hi.
> A company I owe $ to (and cannot at the moment pay), advised they will
> charge 5% per month service fee on the account.
>
> Is this legal? Can they do this?

Not unless there's something in your contract with them that allows it.

However, they could simply start legal proceedings against you to
recover the amount owed. Having got a judgment against you, and
depending on the amount, they could then seek to have you declared
bankrupt. Of course, that may result in them never getting the money.

Assuming there's nothing contractual to back up their service fee
expectation, I think your best strategy is to ignore what they've said
(ie, don't respond at all), and in due course pay just the amount owed.
They could then try to recover the 'service fee' in court, but I can't
see how they could succeed.

Sylvia.

From:	Peter
Subject:	Re: 60% PA Interest?
Date:	Sun, 23 Jan 2005 04:01:56 GMT

In article <1106284676.8e69fc3f58288d2b05a0ad5f0f892f29@teranews>,
STEVE wrote:

> Hi.
> A company I owe $ to (and cannot at the moment pay), advised they will
> charge 5% per month service fee on the account.
>
> Is this legal? Can they do this?

Depends on if it is classed as a penalty clause or liquidated damages.

From:	Horace Wachope
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 15:58:19 +1030

On Fri, 21 Jan 2005 16:17:36 +1100, STEVE wrote:

>Hi.
>A company I owe $ to (and cannot at the moment pay), advised they will
>charge 5% per month service fee on the account.
>
>Is this legal? Can they do this?

You'll need to give more information on the nature of your
relationship with the company in order to get a worthwhile answer.

From:	Peter
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 06:17:04 GMT

On Fri, 21 Jan 2005 15:58:19 +1030, Horace Wachope
wrote:

>On Fri, 21 Jan 2005 16:17:36 +1100, STEVE wrote:
>
>>Hi.
>>A company I owe $ to (and cannot at the moment pay), advised they will
>>charge 5% per month service fee on the account.
>>
>>Is this legal? Can they do this?
>
>You'll need to give more information on the nature of your
>relationship with the company in order to get a worthwhile answer.
If you signed a contract including that rate, you may be stuck. If
however a monopoly supplier imposed a similar contition it would be
struck out as 'oppressive'. Possibly the same if the supplier tried
to 'infer' conditions of sale by small print on rear of invoices,
newspaper ads, etc.

From:	Me
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 17:35:30 +1100

In article <41f09a49.10520435@news.paradise.net.nz>,
peterwn@parazzdise.net.nz says...
> On Fri, 21 Jan 2005 15:58:19 +1030, Horace Wachope
> wrote:
>
> >On Fri, 21 Jan 2005 16:17:36 +1100, STEVE wrote:
> >
> >>Hi.
> >>A company I owe $ to (and cannot at the moment pay), advised they will
> >>charge 5% per month service fee on the account.
> >>
> >>Is this legal? Can they do this?
> >
> >You'll need to give more information on the nature of your
> >relationship with the company in order to get a worthwhile answer.
> If you signed a contract including that rate, you may be stuck. If
> however a monopoly supplier imposed a similar contition it would be
> struck out as 'oppressive'. Possibly the same if the supplier tried
> to 'infer' conditions of sale by small print on rear of invoices,
> newspaper ads, etc.
>
>
No contract was signed. Nothing on invoices/statements saying they will
impose any late fees etc.
So I would presume to pay the amount owing as best I can and not pay the
% amount to them and see where it goes from there.?

From:	Peter
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 07:39:45 GMT

On Fri, 21 Jan 2005 17:35:30 +1100, Me wrote:

>No contract was signed. Nothing on invoices/statements saying they will
>impose any late fees etc.
>So I would presume to pay the amount owing as best I can and not pay the
>% amount to them and see where it goes from there.?
But be very proactive if you receive any dunning letters.

However keep in dialogue with the creditor about your progress in
paying it off.

From:	Vaughan Williams
Subject:	Re: 60% PA Interest?
Date:	Fri, 21 Jan 2005 20:46:31 +1100

"Me" wrote in message
news:MPG.1c5b4dba16b9b650989689@news.internode.on.net...

> No contract was signed. Nothing on invoices/statements saying they will
> impose any late fees etc.
> So I would presume to pay the amount owing as best I can and not pay the
> % amount to them and see where it goes from there.?

Thats right. There's a penalty interest rate they can charge if they
actually issue proceedings against you. I'd probably put your position in
writing that you're willing to pay X amount per month but not any interest
and see what happens.

Were the goods/services for business or personal use? They might have a
problem under the CCC if they're charging that rate.

From:	Seppo Renfors
Subject:	Re: 60% PA Interest?
Date:	Sun, 23 Jan 2005 06:03:02 GMT

Vaughan Williams wrote:
>
> "Me" wrote in message
> news:MPG.1c5b4dba16b9b650989689@news.internode.on.net...
>
> > No contract was signed. Nothing on invoices/statements saying they will
> > impose any late fees etc.
> > So I would presume to pay the amount owing as best I can and not pay the
> > % amount to them and see where it goes from there.?
>
> Thats right. There's a penalty interest rate they can charge if they
> actually issue proceedings against you.

That's utter nonsense - there is no such thing as a "penalty interest
rate" in this case. Interest CAN be awarded by the magistrate if it
goes to Court and is asked for - however it is not a "penalty" at all
- it is compensating a loss to the creditor.

> I'd probably put your position in
> writing that you're willing to pay X amount per month but not any interest
> and see what happens.

Why not wave a red flag to a bull while he's at it. I suggest not to
mention anything at all about the account keeping fee (which is NOT
"interest" even though expressed in % terms)
>
> Were the goods/services for business or personal use? They might have a
> problem under the CCC if they're charging that rate.

No problems at all with anyone, *provided* the fee is in the trading
terms and conditions he has been made aware off. Nor is the
"goods/services for business or personal use" relevant in any way at
all.

--
SIR - Philosopher unauthorised
-----------------------------------------------------------------
The one who is educated from the wrong books is not educated, he is
misled.
-----------------------------------------------------------------

From:	Fred Ferd
Subject:	Re: 60% PA Interest?
Date:	Sun, 23 Jan 2005 08:26:33 GMT

"STEVE" wrote in message
news:1106284676.8e69fc3f58288d2b05a0ad5f0f892f29@teranews...
> Hi.
> A company I owe $ to (and cannot at the moment pay), advised they will
> charge 5% per month service fee on the account.
>
> Is this legal? Can they do this?

that depends if its contractual between you and them or not.

If its contractual, then you have to pay .

If not, then you only have to pay the standard commercial interest rate...

From:	Seppo Renfors
Subject:	Re: 60% PA Interest?
Date:	Sun, 23 Jan 2005 23:19:38 GMT

Fred Ferd wrote:
>
> "STEVE" wrote in message
> news:1106284676.8e69fc3f58288d2b05a0ad5f0f892f29@teranews...
> > Hi.
> > A company I owe $ to (and cannot at the moment pay), advised they will
> > charge 5% per month service fee on the account.
> >
> > Is this legal? Can they do this?
>
> that depends if its contractual between you and them or not.
>
> If its contractual, then you have to pay .
>
> If not, then you only have to pay the standard commercial interest rate...

If it isn't a contractual obligation, then NO, unless the creditor is
a registered lending institution. Also note it is NOT "interest", but
a "service FEE" irrespective of the fact it is expressed in % terms.

--
SIR - Philosopher unauthorised
-----------------------------------------------------------------
The one who is educated from the wrong books is not educated, he is
misled.
-----------------------------------------------------------------