Have you ever been charged a fee for missing or being late on a payment? If so, you need to read this blog, as we’re going to tell you when a business can – and cannot – issue these kinds of penalties.
When you enter into a credit agreement (also known as a “loan contract”), it’s important to know that, aside from three very specific circumstances, a business (known as the “creditor”) generally cannot charge you extra fees or penalties due to late or missed payments (this can be found in Section 75 of the Business Practices and Consumer Protection Act in Part 5 — Disclosure of the Cost of Consumer Credit).
3 instances when a creditor IS allowed to issue a late payment or default fee (in relation to a credit agreement or loan contract):
- When you’re sued in court. If you’re taken to court for being late or not paying your debt, the court can order you to pay certain costs that were incurred by the creditor who’s collecting or attempting to collect the debt.
- When a bank doesn’t honour your payment. If the cheque or pre-authorized debit isn’t honoured by your bank, you could be on the hook for a “non-sufficient funds” charge (also known as an “NSF fee”). It’s important to know that this NSF fee must be reasonable, and reflect the costs actually incurred by the creditor as a result of the bank not honouring your payment.
- When your credit agreement includes a requirement that interest must be paid on the amount owed. Check to see if your original credit agreement requires you to pay interest on the balance you owe. If it does, the interest rate will be based on the amount that you owe at the interest rate specified in your credit agreement. It’s important to know that the interest you owe can continue to accrue, even if your account has gone into collections.
We hope this information was helpful!
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67 thoughts on “Are late payment or default fees legal?”
What is a person to do if they need to file bankrupsy and have no funds what so ever please help Thank you (:
Hi, Just curious about a situation where we were charged $35.00 by ICBC because we had to stop payment on a direct debit to keep the bank from bouncing the payment. The payment was made shortly after but ICBC says that because we stopped payment there was a $35.00 late charge, and regular payment due. Can you enlighten me as to whether this is legal or not.
Hi Lisa, may I suggest that you start with looking at some information on this website, which is the website of the Office of the Superintendent of Bankruptcy of Canada? http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/home
Hi Les, let me look into this for you. Sorry for the delay in getting back to you!
Hello again Les, in response to your question, I am not sure this issue involves a credit agreement. It sounds like it may be more like a dishonoured cheque or pre-authorized debit (PAD) and a resulting NSF charge. The law that we are responsible for related to the disclosure of the cost of consumer credit (S. 75(c) of the Business Practices & Consumer Protection Act) does permit a NSF fee for dishonoured cheques or PADS.
I hope this information is helpful.
Should the dishonoured cheque or pre-authorized debit (PAD) fee show on the disclosure statement my bank gave me? or because it will only be charged if the payment dishonoured it isn’t disclosed?
Hi Sheena – Great question! Yes, generally speaking credit grantors must disclose this information. That said, we would need a bit more information about your loan in order to refer you an organization that could provide you with further details (for example, was it a car loan? A mortgage? A loan from a credit union?). I hope that helps!
Hi there. I recently had a late payment for my gym membership. On my membership agreement it states that any automatic payment will received an NSF fee, which I did. It also states the following “Amounts not paid in full within ten days of the member’s due date will be subject to a payment charge of 5% of the unpaid amount and $50 collection charge.” In total I paid $48.03 for my monthly dues and then an additional $63.03 for late charges. Is this acceptable? Thank you!!
Good morning Jen — Thanks for your question! If the gym contract you signed clearly states that these kinds of fees will be applied in these kinds of circumstances than yes, they are allowed. Let me explain why this is… Your gym contract is considered, by law, to be a “continuing services contact” and wouldn’t fall under BC’s Disclosure of the Cost of Consumer Credit (as you’re not borrowing money from the gym). Our office regulates continuing services contracts (as it speaks to what information has to be included and consumers’ cancellation rights) — more information can be found on this page on our website: http://www.consumerprotectionbc.ca/consumers-other-businesses-home/how-can-we-help/continuing-service-contracts I hope this information was helpful!
Hi Fed Up! Thanks for your question. While this issue wouldn’t fall BC’s Disclosure of the Cost of Consumer Credit (as you’re not borrowing money from the storage unit), we do oversee certain (specific) types of contracts in BC. In order to assist you further, would you be able to give our Inquiry Centre a call (1-888-564-9963) and we can determine whether or not this falls under the laws we administer (and, if it doesn’t, hopefully provide you with a referral to another organization that could potentially help)? Thank you!
We have a storage unit in BC. On the contract we signed, late fees were to be charged at $10 per every 10 days past due. They have now changed them (via email) to $40 per 10 days! Is this legal? We didn’t receive the email regarding the increase, and got 1 month behind. When we paid the full month plus what we believed to be the late fees, we were told that we hadn’t paid enough, still owed $60 in late fees, and now we owe another $40 late fee, ON the late fee! Can they do this?
I was pleased to come across this blog and find people in a similar position. I too like to Fed up am facing late payment fees from a storage company in Langley, BC and by looking back at the charge history found they are charging me 20% for late fees which I find excessive. In my research a rate of 3%-10% appears to be the industry norm. I understand I have not complied with the terms I agreed to by paying on time however 20% is excessive. They have always been polite and worked with me to accept payment arrangements however I have yet to ask regarding the late payment fee rate as of yet which I will be doing tomorrow during business hours. The other matter is their 4 stores were recently bought out by a larger company so apparently collection policy has changed. But I digress. Thank you for allowing me to vent so to speak and any suggestions and/or advice is appreciated but certainly not expected.
Hi James, thank you for your message. As you mentioned, additional fees and charges are typically outlined in the terms and conditions. I believe contacting the business is a good place to start. I’ve spoken to our Inquiry Centre and they suggested contacting the Better Business Bureau if you would like to make a complaint about the excessive late payment fee. Their link is here – http://www.bbb.org/mbc/. I hope this information helps.
If a loan contract specifies for example, 5% interest on the amount owed, due in 6 months, and that is it, what would be the interest rate after 6months if the borrower does not pay? Can there be an automatic extension of the interest rate?
Hi Iven, each loan varies so it would be important to look at the terms and condition of the contract. You may also want to contact the loan provider directly and ask. I hope this helps.
Can my child’s school charge me a late fee monthly on tuition payments? Her tuition is 6500 annual I pay when I have money usually not a monthly payment but larger bimonthly payments. The school has always been paid the full amount before the years end. I can’t understand why they charge me $50 late fee a month for monies I have not borrowed from them? I’m paying on monies owed. I hope that made sense. No contract.
Hi Cait, this blog post pertains to credit agreements or loan contracts so your situation may be slightly different. However, if there was an agreement with the school about your payment schedule and you were late on making payments, the school is allowed to charge late fees.
If you have further questions, we would recommend that you contact the Ministry of Education (for public schools) – http://bit.ly/1OmQwph or PCTIA (for private schools) – http://bit.ly/1Riswta We hope these referrals can further assist you in this case.
A Company that I have a loan with is trying to charge me $450 for an nsf fee? Is that legal? According to what I read on your website it states: NSF fees must be reasonable and reflect the costs actually incurred by the Creditor as a result of the bank not honouring my payment.
Hi Lynne, thank you for your question. We would like to get more details if possible. Please contact us by calling toll free 1-888-564-9963 (Mon to Fri 8:30-4:30) or emailing firstname.lastname@example.org so we can get more information. Thank you Lynne!
i got charged with an 8000 late fee on a 435000 mortgage for being late for two months. is this legal. they said they will calculate the fees and mail it to me. can they get away with this insanity. if so, i will lose my house.
Hi Pat, sorry for the late reply. Whether this practice is legal or not depends on what your contract states. You may want to go back to the original contract and see what it says around late fees.
You may also want to contact the Financial Institutions Commission (FICOM) as they are responsible for administering nine statutes that regulate the pension, financial services and real estate sectors in BC. I hope this information helps!
Hi I have a question, I took out a loan in 2011 and have been 250$ a month since then, I have been charged renewal fees every 6 to 12 months in different amounts plus I had times where paying the renewal fees was so expensive I could not send it in time, I am update on all my payments but another renewal fee is now due and I asked if I could have more time as I can not afford this fee and the loan agent said they will charge me 20$ a day until it is received along with copies of my property tax and insurance, I did not realize at the time when taking the loan it was considered a second mortgage, also my loan was in the amount of 24000 I received 11000 of that amount after broker fees lender fees and admin fees I have been paying this for 5yrs n have have paid over 20000$ and was told In order to buy out my loan it would be 23800, my biggest concern is the 20$ a day is that legal ? My renewal fee is paid n she is still charging me this amount from July 13 to Aug30 the fee was aug 2
Hi Loni, thank you for your question. If your loan was considered a mortgage, you may want to contact either the Financial Institutions Commission (FICOM: http://bit.ly/1qdJae9) for BC credit unions or the Financial Consumer Agency of Canada (FCAC: http://bit.ly/1R95S1M) for banks. I hope one of these organizations will be able to answer your question.
Hi. I have a property within a block. Recently our factor was taken over by a new one who have been charging late payment administration fees of £24 on invoices not paid within 14 days of invoice date. (I received my current invoice by email yesterday, 7th Sept, dated 1st Sept with an expected payment within 14 days which is effectively one week). At first this condition was not displayed on the invoice however since I pointed this out, it has been. This however is not my issue.
As this new factor came to be by takeover default, we the owners, never had a chance to agree any new terms and were assured that everything would be business as usual.
Is it legal to have late payment fees after such an unfeasibly short period of time? The statute says ‘after 30 days unless agreed otherwise’ however I have never agreed to 14 days and think that this is far too short a timescale unrealistic and draconian.
I look forward to hearing your thoughts the matter.
Hi Graeme — Are you located in British Columbia, Canada? I only ask because of you use of the pound instead of the dollar. If you’re not, it’s important to know that laws differ from province-to-province and from country to country, and it’d be best to contact your local consumer protection bureau for information about your specific circumstance. I hope that helps!
Hi I would like to know if WCB has a right to make me pay for coverage every 3 months when I have always payed at the end of the year? Also is it legal for them to charge me a late fee?
Hi Dan — I don’t think your situation would fall under these rules, as this blog talks about credit and loan agreements (i.e., you’re not borrowing money from WCB). Whether or not you have to pay every three months probably depends on the agreement you signed with WCB. Have a close read of the terms and conditions for the answer to that one. I hope this helps!
Hello, I wrote a check and it got bounced because I was a few dollars short The bank charged me an NSF fee and I did pay it. The company that I wrote my check to is charging me an NSF fee. Can they do this because when I signed a contract with them it did not state in the terms and conditions about these fees.
Good question, Howie. This blog post speaks to late fees when you get a loan, so I don’t think the law would apply to your specific situation. My suggestion would be to go back to the company and ask them about their policy with regards to NSF fees and how they share information about their policy with their clients. The Financial Consumer Agency of Canada may have more information for you and about NSF fees — here’s a link to their website: http://www.fcac-acfc.gc.ca/Eng/Pages/home-accueil.aspx
Hello, I am a small business owner in Victoria, BC. I am wondering what can I do if client is unable to pay (I hope this is the case), or not paying for the invoice to computer hardware that I have supplied? Can I go to their office to take back the equipment that had not be paid? Or what is the legal procedure(s) that I need to take before I can do so?
Good morning James, I’m sorry to hear this and it sounds like you may need to seek legal advice. The Canadian Bar Association has a relatively low-cost service where you can get a 30-minute consultation with a lawyer for $25 — here’s a link to more information: http://www.cbabc.org/for-the-public/lawyer-referral-service You could also look into filing an order in Small Claims Court — here’s some information on that process: http://www.smallclaimsbc.ca/ I hope that helps, James.
When is the due date allowed to be set? I get an invoice at the first of the month and they warn that if I don’t pay it within two weeks I am subject to late fees. I get paid every other Friday, so if the first day of the week falls on a Monday I am past the due date written on my invoice, does that mean they can charge me, or is the due date supposed to be later?
Hi Michael, what kind of invoice are you referring to? This blog post is about credit agreement (also known as a “loan contract”) and the invoice you are talking about may not fall within what we are talking about here regarding loan contracts. We would like to get more information to be able to help you – please feel free to give us a call, 1-888-564-9963 and we will try our best to point you in the right direction!
In regard to Bank charges, in particular the “NSF” fees and “Exceeding Overdraft” fees, you mention above that these fees are legal. However, they “must be reasonable, and reflect the costs actually incurred by the creditor as a result of the bank not honouring your payment”.
My question is: How do we know what reasonable is and how would we know what reflects the actual cost incurred by the bank ? Are the banks here in Canada not doing exactly what the banks in the UK were doing, which ultimately cost the UK banking industry dearly as they were forced to return these fees back to the consumer ?
I would really appreciate your comments on the above please.
Hi Tony, the word “reasonable” is actually what’s in the Act (section 75 – http://bit.ly/2hOfXan) but generally speaking, it is what is fair in the marketplace. So it really depends on what the consumer was charged on their NSF fee and we may look at these on a case by case basis. I hope this helps – if you have any further questions, please feel free to contact us toll-free at 1-888-564-9963.
Thank you Shoko, it seams that the word “reasonable” in the Act leaves it wide open for the banks to charge what ever they want. It is highly unlikely that the banks would disclose their actual costs for these transactions. To do so would create outrage at how much “mark-up” they are actually receiving for this service. In the “old days” when a consumer went overdrawn, the bank would have an admin person type up a letter, add an envelope and a stamp and actually post the letter. Obviously that would incur a cost, hense the charge. But today they don’t even type up a letter, it’s all done automatically and therefor the costs should be minimal.
And to answer your question above regarding NSF fees, I myself have been charged $48 for each transaction that was not honored by my bank.
these fees need to be a two way street and is unfair to the consumer- your late with yr CC payment or electric bill -u get hit with a late fee- but should a company take more than enough time to re-imburse you for something the consumer cant add a late fee…. its got to be both ways
Hi Melissa, thank you for your question. While this issue wouldn’t fall BC’s Disclosure of the Cost of Consumer Credit (as you’re not borrowing money from the storage centre), we do oversee certain (specific) types of contracts in BC. In order to assist you further, would you be able to give our Inquiry Centre a call (1-888-564-9963 ) and we can determine whether or not this falls under the laws we administer and if not, perhaps find you a referral that can help! Thank you!
Can storage centers charge u overlook fees every month more then once a month plus late fees 3 times in a month plus fees for them mailing a letter out
Hi Mark, thank you for your question. It is my understanding that NSF fees are legitimate fees for a creditor to charge. I don’t actually know about the timing though as our laws don’t cover that aspect (and we don’t regulate banks or mortgage companies). Perhaps this is something that you should have a conversation with your bank about, they may be able to offer some clarity in this situation. I would recommend trying to resolve this with them initially and then deciding what route you want to take from there. I hope this is helpful to you!
I just received a phone call from my mortgage company and they want to collect a $65 NSF fee from April 2012. My mortgage has been renewed at least 6 times (with the same company) since then and this is the first I have ever heard that my April 2012 mortgage payment was not processed on time. I have never received any written communication regarding this $65 NSF fee. It seems unreasonable to even be contacting me about it after so much time has passed. Should I pay this fee or refuse?
I entered into a loan contract for biweekly payments. One payment bounced and I paid both their and my nsf fees. But now they made the loan payments higher from 125 to 150 for the term of the loan which is a lot. Can lenders do this?
Hi Ann, thanks for your question. I might suggest you contact the provider of the loan and find out about the terms and conditions of your loan agreement. There’s a chance that this may exist in your contract, but I would suggest contacting them directly to find out the details of your agreement. If it is not in your contract, then I might suggest you contact our inquiry centre for more information. Our phone number here is 1-888-564-9963. Best of luck!
Just wondering about default payments on child support payments thru FMEP. I am finally in a position to pay the debt in full however the interest charged on the amount in arrears is the same as the amount therefore actually doubling the amount due? Is this legal?
Hi Bruce, thank you for your question. Consumer Protection BC has no authority when it comes to the amount of interest charged. I might suggest you try contacting FMEP for more information or clarification on the terms and conditions of the loan agreement, as this issue falls outside of our regulatory authority.
I live in an area with a community water system, and they are set up similarly to a strata. They call it a “society”. We are having some disagreement in the fees they charge me quarterly. They charge $40/month for a basic charge, and if you have a rental suite, $60/month. Only when I renovated my suite did they start charging me the $60/month whether it was rented or not, and I disagreed with this. My suite is empty and therefore, I refuse to pay the $60. It is not clear in the tarriff about this issue. Anyhow, they bill me $60/month, and I have been paying $40. So, they now tack on $10 per month as a late fee. Can they do this?
Hi Lori, thanks for reaching out to us here. It’s my understanding that stratas are, in a way, self regulating when it comes to fees. That said, I did a bit of digging for you and found this page on the Government of BC website. According to that page, it looks like late fees cannot exceed 10% per annum compounded annually. You may be interested in telling them this. That said, we do not have any authority or oversight when it comes to strata issues, but we have written a blog post about what you can do when you have an issue with your strata. I might suggest trying to resolve the issue with the group directly and then seeing where you can get with it that way (informally), then looking to the other steps outlines in some of the resources from the blog post. I hope this helps and best of luck!
I’m wondering what are a company providing services (as for example Quickpass / Golden Ears Bridge ) responsibilities in terms of charging interests from years back (7 years in this case) and having a customer building a tremendous pending bill and not notify the customer by any means?
Is it legal to let a customer build daily interests on an account for years and not notify the customer, arguing that the customer has an online access to the account ?
Hi Emilie, thanks for reaching out to us here. In these situations, when a debt is being disputed, Consumer Protection BC is not in a position to offer legal advice. Their interpretation of the law may be accurate, but I can’t say for sure, as these things are typically settled in court. I know Treo has their own charge dispute resolution process, but I’m not sure about the other ones. You may be interested in finding out if there is another process you can go through besides court. It sounds like you’ve already tried to resolve the issue with them directly, however, maybe it’s worth another shot.
If you would like to dispute the debt, you are within your rights to do so. By disputing a debt, you’re telling the creditor that you don’t feel you owe the debt and that you wish for the matter to be taken to court for resolution. If there is no process in place through the business directly, here is a link to a debt dispute form you can use to send to the business: https://www.consumerprotectionbc.ca/wordpress/wp-content/uploads/2017/06/Debt-in-dispute.pdf.
Send your written notification to both parties in a way that gives you proof of delivery, such as registered mail, fax, or email. Keep copies for your records. Give the business three to five to process your request.
I hope this is helpful and best of luck!
I paid a small company for a furniture repair job with a cheque that did not clear. When I realized this, I immediately sent them another cheque. Now they are demanding a $15 NSF fee. There was no contract or agreement or anything that stated there could be such charges, or anything written at all. I simply paid for a repair job. I didn’t even know until the last minute that they do not take credit cards or debit, which is why I had to write a cheque. Can they demand this fee and what happens if I refuse to pay it?
Hi Dennis, thanks for your question! This doesn’t sound like this issue involves a credit agreement. I think you may be interested in getting in touch with Payments Canada as they oversee charges when it comes to payment. They may be able to provide you with a more official answer on the topic. I hope this is helpful and best of luck!
I received a fine from the SPCA while I was away which I think is Usurious.
If you do the math, I am only sking if you think I AM right OR NOT.
My initial fee was $25 for a licensing fee for a dog tag for my dog . Which is a little Jack Russell and she only goes outside when I am home.
I was out of the country for a while and thought it was no big deal as I always sit down and pay all my bills when I get back as I usually do ….. AND I owe absolutely nothing.
The late fee is $200 on top of the initial $25….and is this a usurious rate..or not??
Hi Freddy, unfortunately we are not in a position to comment on whether you are right or not, as we do not regulate or oversee the SPCA. Have you contacted the SPCA? You may want to start there to understand the reasoning behind the $200 penalty fee.
We are a company having trouble paying vendors on time. How much can our vendors charge us for finance charges for late payment without a contract.
Hi Cindy, thanks for your question. Here at Consumer Protection BC we oversee business to consumer transactions and aren’t in a position to offer business or legal advice to businesses that we do not licence or regulate. You may be interested in talking to a lawyer about late payment charges without a contract. The Canadian Bar Association offers a Lawyer Referral Service where you can speak to a lawyer for 30 minutes for approx $25. I hope this is helpful and best of luck!
Hi I am a private and I subscribed for an automatic payment on Credit Card with a parking company. Eventually I moved house and never communicated to the company and all my payments have been rejected since. They never contacted me by email (even if I subscribed for email account correspondence) or by phone untill today (14 months after the first rejection). I never realized that my card wasn’t paying and now they are asking me for rejected payment fee and interests for an amount of almost 1000 CAD plus 900 of the regular monthly fee. Do I have any right to not pay the extra fees?
Hi Erica, thank you for posting your question here! As our blog post states (see under “3 instances when a creditor IS allowed to issue a late payment or default fee”), a creditor is allowed to issue a fee if pre-authorized debit payments are not honoured by your bank. Having said that, we don’t know your full situation so it is certainly hard to determine. If you’d like to speak to someone about this, please feel free to give us a call at 1-888-564-9963. If you’d like to try disputing the debt, then we have more information and the forms you can use on our website here.
Thanks for you answer Shoko! I am trying to have a chat with them and see if we can rich an agreement, for the moment.
Two comments with regards to banks. I’ve sabre rattled my way through it now, but this would be helpful for others to read.
Collection agencies are not allowed to charge interest on debts they have purchased to collect. RBC is an outlier in this regard. They created a company called “RBC Visa Collections” at arms length and give them access to lock your account. You will get the exact same VISA statement with interest, overlimit fees, etc., however your account is closed and they are a collection agency, not part of RBC nor VISA. This is totally illegal and this agency should have their collector licenses for BC revoked. I spoke with them every two weeks making significant payments of $200-$400 on a balance of $2800. Towards the end of the year I offered them $1400 to just get the card below limit and they told me to pay $478 but that the $478 would get me out of arrears and I would no longer receive collection calls. A month later, like clockwork, I got another call, and when I explained the situation, the guy told me my account was closed a year prior. When I asked him why the other 50 times I called in earnestly to make payments nobody ever told me that, his answer was “Because we don’t have to”.
Next is something that I feel is totally unjust. I had a customer pay me with a cheque for services provided and he kept delaying when I should clear the cheque. After a month I told him get the money now and I’m clearning the check, I’ll do it late on Friday and that gives you until Monday morning to find the money. The cheque of course bounced. What I found infuriating was that (a) they debited my account for the missing funds, not the issuer of the cheque, and (b) they charged ME an NSF fee (and probably him also) of $45. If someone writes a bad check, they should be putting his account into the negative and persuing action, not me, the poor schmuck saddled with a bad cheque. I didn’t write the check and verified that it was legitimate at the bank.
In the latter instance, telling him I was going to show up with my staff and cut his truck in half with two angle grinders if he didn’t come up with the money was the only way to collect the money.
Hi, Wondering what the update 2020/2021 maximum annual compounded interest rate is for interest charged on outstanding balances for regular business (not CRA).
Also, in BC are you able to compound monthly should the balance remain outstanding or only allowed to charge the percentage on the original outstanding balance?
Hi Tara, thanks for getting in touch. We do not regulate the banking industry so we are not experts in the field. Having said that, if you are talking about a payday loan (which we regulate), the maximum a payday lender can charge for every $100 borrowed is $15 in BC. I’m assuming that you are not talking about a payday loan here so I will provide you a link to the People’s Law School website – they have some useful resources about finances. I hope this is helpful.
I live in a trailer park and the new manager says she can charge what ever she wants for late fees on the storage spots in the park, They are also rat infested. Don’t these units have to be fit for storage purposes and safe to enter before they can legally be rented out?. And Can a person legally refuse to pay until the health problem is dealt with and make them cover damages incurred to property? No action has been taken and they continue to rent them out to the public. Question 2 is what is the maximum in late fees that can actually be charged for storage late fee’s in British Columbia?.
Hi Jay, thank you for getting in contact with us. Our article you read about refers to loan agreements and I believe your situation is a bit different from that. I found some information on rental storage that comes with renting a home on the Residential Tenancies branch website here. Since you live in a trailer park and your concern is about late fees, you may want to directly contact the Residential Tenancy Branch and talk to someone about your issues. I hope they will be able to point you in the right direction.
Hi, I was making my credit card payments online by setting a payment on the due date on the statement only to find I was being charged interest because my financial institution takes 1-3 days to process the transaction. I recall a lawyer on a CBC talk show say that there was a law in Canada (unlike the US) that says that the Credit card company must consider this ‘paid on time’ and cannot deem this late payment.
Hi Steve, thank you for contacting Consumer Protection BC. We do not oversee this area of law and I’m not sure if another organization is responsible for enforcing it. You may want to contact your credit card company directly and see if they are aware of the law you mentioned. If you’re looking to get the interest charges back for the past payments, asking your credit card provider would be the most straightforward way to approach it. I hope you will be able to solve this issue quickly!
On a car loan paid bi weekly at 256. Is a NSF fee for a missed PAD payment of $100. Considered reasonable?
Hi James, thanks for your question. NSF fees can be charged for dishonoured cheques or PADs. Our laws state that a reasonable NSF fee reflects costs incurred by the creditor because of a defaulted payment. I suggest looking at the details of your contract or asking the dealership for an explanation of the fee to determine if it’s reasonable for the situation. I hope this helps!