What is a Late Fee?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 22 August 2019
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A late fee is a fee which can be charged when a duty is not completed in a timely fashion. Late fees can take a number of forms, but in all cases, in order to be legal, late fees must be disclosed at the time that the contract for the service is written. For example, if a rental agreement includes a note that a late fee will be charged when the rent is more than five days late, the landlord can legally levy that fee, but if the contract does not include a discussion of late fees, the landlord may not collect them.

One of the most common types of late fee is the fee related to billing. Rent, credit card payments, utility payments, and other types of bills can all be subject to late fees if they are not paid by the date they are due. The late fee can be a flat fee, or a percentage of the total due, and it is typically based on a per-day basis, causing the fee to rise for each day that the payment is not made.


Another type of late fee is a fee which is charged when rented or borrowed materials are not returned when they are expected. Equipment rental companies, car rental companies, libraries, and video rental stores all utilize late fees to penalize customers for failing to make returns in a timely fashion. In fact, in some cases, late fees can make up a substantial percentage of company profits, an issue which is sometimes criticized.

Late fees can also be levied in other types of situations. For example, most registrations which require a fee can incur late fees if the registration is not filed in time, as a method of encouraging people to register early. Late fees are often built right into the registration fees, with people who register by a certain date being charged one amount, while people who register after that date are forced to pay a higher amount.

When signing any kind of contract, from a credit card agreement to a plumber's bill, it is a good idea to review the contract for disclosures about late fees. If no late fees are disclosed, it doesn't hurt to ask about them. If there are late fees, information about them should be requested in written form so that that disputes can be resolved in a timely fashion. People should also know that they can fight late fees which are unfairly levied, such as fees which were not disclosed at the time that a contract was signed, or fees which are charged despite the fact that the service was completed in a timely fashion.


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Post 1

I have a question. About a year ago I got a month behind on my house payment. When I made the next payment they did not apply is as the past due payment but the current due payment. This has been going on for a few months now and they are still charging late fees on that missed payment. How can I stop these fees. I am just getting further and further in debt due to these charges.

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