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  1. #1

    Charging Late Fees/Interest

    My corporate headquarters is in Connecticut, but we also operate out of California. I think I may have the luxury of picking either location's laws, whichever benefit me more.. but I am not sure.

    In the past 10 years, I have never had to charge late fees for clients. Whenever I find one slow to pay, I've had pretty good luck nudging them to pay or I've not cared enough to rush things.

    I am planning on updating my terms to cover my *** a bit better, primarily to include late fees on outstanding debt.

    "The California law states if a balance due is less than $60, you may not charge more than a $10 late fee. If the balance is $60 to $100, you may not charge more than a $15 late fee, and if the balance is greater than $100, you may charge $20 or 15 percent of the balance due, whichever is greater."

    Who here is charging late fees? What rates are you charging?

    I am not looking for tips/thoughts on when to disconnect/suspend customers. I suspend folks on a case-by-case basis and have plenty of policies in place to handle this. I am looking at debt collection only right now.
    Hugh Buchanan
    harveyopolis corporation /

  2. #2
    By the way, some discussion regarding the legal aspects of late fees is available here:

    It's about self storage.. not everything is relevent, but a lot is pretty universal.
    Hugh Buchanan
    harveyopolis corporation /

  3. #3
    Join Date
    Jun 2001
    Denver, CO
    Very interesting read. In web hosting, it may be possible to circumvent the "late fee" not being a penatly thing by charging customers a service reconnection / resetup fee if their account becomes so deliquent that service is suspended.

    FWIW, we simply charge 1.5% of the balance due, which usually works out to be a small pittance of a number, hardly even worth sending out an invoice. However, we do have some customers who are chronically late, and they get charged a late fee based on the principle of the situation.
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  4. #4
    Join Date
    Feb 2004
    Australia (Crikey)
    maybe you should talk to a lawyer

  5. #5
    Join Date
    Jul 2001
    I totally agree with BubHost.
    Talk to your solicitor, he can help you and tell you which rules you fall under - maybe you choose the one while you fall under the other; only your lawyer will know.

    Talk to him, he'll be able to advise you on exactly what you should do, how much to charge, and even help edit your TOS and so on to make sure everything is legal and so everything is in your favour.

    Hope this helps.

  6. #6
    Join Date
    Aug 2002

    I am almost positive that the rules discussed in that article have little to no relevance to the hosting industry. I would check the actual laws to see if they mention applicable industries.

    Alternately, you can do like I do and use a Pre-Paid Legal membership for attorney consultations

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