TransAct is to double its fee for the late payment of bills to $11 - but that is still cheaper than Telstra or Optus.
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From January 28, late payment fees for TransACT customers will increase from $5.50 to $11.
Telstra charges $15 for any bill $100 or more that is late. Optus also charges $15 on bills between $50 and $100. For late bills more than $100, Optus charges $15 plus ''2per cent above the prime lending rate charged to us by the ANZ''.
TransACT has explained its 100per cent fee hike to customers with a notice on bills saying the increase ''reflects the current costs incurred to us to recover late payments''.
However, TransACT chief executive officer Ivan Slavich would not say how much it cost the company to chase late bills.
He said it was the first time TransACT had increased its late bill fee since the company was established in 2000.
The new fee was ''on par with the late payment fees applied by other telecommunications companies''.
''The original fee of $5.50 was increased because it was insufficient to cover costs associated with late payments,'' Mr Slavich said.
''The increase to $11 reflects TransACT's actual costs of incurring, managing and recovering late payments. These costs include postage and administration costs, system management costs, lost interest and staff costs.''
Mr Slavich said the company had flagged the fee change 90 days before taking effect so customers could get used to it.
''We also offer a direct-debit option for customers concerned about forgetting to pay invoices on time,'' he said.
TransACT would not release figures on how many customers do not pay their bills on time or the amount of late bill fees collected, saying it was ''commercial in confidence''.
Australian Communications Consumer Action Network spokeswoman Elise Davidson said when a telecommunications provider increased fees, its excuse was usually to bring it in line with the rest of the industry.
She said those providers risked a public backlash if the late payment fee bore no relation to the actual cost of chasing the outstanding bills and she warned providers against gouging customers.
Consumer watchdog Choice spokeswoman, Ingrid Just, said it was important any fee increase was ''fair and transparent and reflected the true cost to the business''.
Telstra changed its late bill fees in October this year for the first time since 2005. It now charges customers $15 for any bill $100 or more that is late.
Telstra previously had a tiered system where customers paid a $5, $11 or $15 bill late fee depending on the size of their bill.
A Telstra spokeswoman said the fee now might be a flat $15 per bill but the threshold for late payment fees had also increased from $65 to $100.
''The late payment fee covers the cost of sending reminder notices and text messages, and of call centre staff telephoning customers. We believe these costs should not be borne by customers who pay their bills on time,'' the spokeswoman said.
An Optus spokesman said its last late bill fee increase was in 2007 from $10 to $15.