Vodafone late fee heads higher

TOM PULLAR-STRECKER
Last updated 12:56 22/08/2014

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Vodafone New Zealand is hiking its charge for late payment by 72 per cent.

The rise comes amid reports its sister company in Australia is likely to face legal action over similar fees there.

Vodafone New Zealand would increase its charge for invoices that were paid late from $10 to $17.25 on Monday week, spokeswoman Emma Carter said.

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The company introduced the fee in 2012.

Spark, formerly Telecom, brought in a late payment fee of $18.40 for its customers in May last year, while 2degrees charges late payers $7.50.

The Australian Financial Review reported that Australia's big three telcos, Vodafone Hutchison Australia, Telstra and SingTel-Optus, were facing looming class-action lawsuits over their late-fees that could cost them hundreds of millions of dollars. The AFR reported Sydney law firm ACA Lawyers was coordinating the potential lawsuits.

Vodafone Hutchison's late fee is A$10, while Telstra and Optus charge A$15. Late payment fees have come under attack in Australia after a federal court ruled that some charges imposed by credit card companies for late payment were excessive. ACA partner Steven Lewis told the AFR the true cost of processing late payments was as little as A50 cents.

Consumer New Zealand chief executive Sue Chetwin said she was not aware of complaints from New Zealanders but "$17 does seem quite high if you are just missing your payment by a day".

The charges appeared "petty" but the big telcos were struggling as competition had increased and the charges might represent a bit of claw-back, she said.

Carter said Vodafone New Zealand's fee rise was required because the cost of chasing overdue bills was substantial. $17.25 was "a true reflection of how much it costs us to handle late payments", she said.

Spark spokeswoman Lucy Fullarton said it used a "detailed methodology" which had been independently checked and verified to ensure its late payment fee only covered its costs.

2degrees spokeswoman Charlene White said its $7.50 charge was purely cost recovery.

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