Whatare a borrower’s rights regarding mistaken late fees?

I have a car loan which has been a source of frustration since the very first payment with payments mis-credited payments; sometimes took many months of repeated letters and faxes with proof of payment to be credited. There were payments credited, debited and re-credited repeatedly and now I am trying to pay the loan off but am being charged over $500 in late fees. I am also fairly certain that the actual payoff amount is not even correct but I am willing to pay it because I cannot afford an attorney to challenge this. Can I offer to pay off the loan minus the late fees to end this fiasco?

Asked on August 25, 2011 Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

The short answer is, you are only liable for the correct fees--i.e. for principal, interest, and late charges which are factually correct and which are called for under the terms of the agreement. You do not have to pay for anything not in the agreement or based on misfiling, misapplication, or other errors. But if the lender will not voluntarily resolve this with you, you will have to sue to force them to stop charging the wrong fees, provide the correct accounting, possibly recover any compensation or damages to which you may be entitled, etc. So you can try to negotiate with them, as you suggest, but if they won't move, you'll need to bring a legal action. You should consult with an attorney--if they have been acting in a fraudulent or grossly negligent way, it may be possible to get additional damages or money from them, making it worthwhile to retain a lawyer. (Many lawyers will provide a free initial consultation to evaluate a case.) You could also represent yourself in court. Good luck.


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