Is it legal to charge a monthly late fee on a bill that is only billed quarterly?

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Is it legal to charge a monthly late fee on a bill that is only billed quarterly?

A utility company is charging us a late fee of $10/month on a bill that only bills quarterly. The total quarterly bill is about $60. Is this even legal? I read somewhere that 10% should be some form of maximum amount allowed – but I’m wondering if it’s even legal to charge me a late fee each month when they only bill each quarter?

Asked on April 26, 2011 under Bankruptcy Law, Minnesota

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

If your state doesn't have usury fees, then the late charge may seem exorbitant but may be quite legal. If you wish to challenge the validity of the late fee, put your inquiry in writing and email the company for a full explanation. The company is required to explain all charges to you, including providing the statutes that allow them or the regulations or rules that allow them to charge such fees. If you are still concerned, consider talking to your local prosecutor's office about the validity of your bill, the extent of the late fees and the need to pay this off in a fashion that doesn't accrue such fees when you are only billed quarterly.


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