Tuesday, May 06, 2008

Unlawful default fees

I seem to be called on regularly to help friends or neighbours to negotiate problems with their banking and bills. Not, I should add that I am the slightest bit interested in accounting practices, but I have a sort of reputation dealing with call centre agents and understanding some of underlying legal issues.

The simple fact, at least here in Australia, many of the excessive charges on accounts are unlawful. As household budgets become tighter more people are being hit by a raft of default penalties. In this country both court findings and the Trade Practices Act are clear on this issue.

There is a form letter (Choice) I urge people to use which details the legal provisions for a vendor, which asserts: particularly because of my lack of bargaining power relative to you and the fact that the terms imposing these fees are not reasonably necessary for the protection of your legitimate interests.

The bottom line is that the sorts of penalties being challenged are essentially fines. At least in this country fines can only be levied by government agencies regulate to do so and the courts. Private business cannot charge more than the cost of processing any default, unless an extra fee is levied by the court.

What fascinates and annoys me is that people continually fail to take these simple steps to protect their already overstretched financial resources; it seems to be too bloody hard to fill some details on a form letter. In the meantime businesses are raking in money without challenge because it isn’t being challenged.


TomCat said...

Would that it were so easy here i9n the US. Ten years ago there were some excellent safeguards protecting us from predatory financial institutions, but Bush and the GOP let them write their own regulations.

Cart said...

Tom, the right never did manage to dismantle the whole of our protective culture.