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Administration charges

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  • 04-05-2015 1:11pm
    #1
    Amelia09
    Registered Users Posts: 6 ✭


    Hi I was wondering if anyone could give me advice. My husband and I moved into our own home over a year ago. We sourced the majority of our materials in a local hardware store. The store was good in that they let us build up credit and pay money off every month on our bill. To date we've bought and paid for materials costing €40,000. Since May 2013 they have started charging us administration charges each month on our bill. The only administration involved is printing off a single sheet each month. To date the administration charges is €963. I am really annoyed about this. We were never informed by the store this would happen nor did we sign any agreement. My question is,where do I stand legally on this matter? Do I have to pay any or all of this amount. We still have €3000 left to pay which I'm hoping to get paid very soon.Any advice would be greatly appreciated.

    Regards
    Emma


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    #2
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    Amelia09 wrote: »
    Hi I was wondering if anyone could give me advice. My husband and I moved into our own home over a year ago. We sourced the majority of our materials in a local hardware store. The store was good in that they let us build up credit and pay money off every month on our bill. To date we've bought and paid for materials costing €40,000. Since May 2013 they have started charging us administration charges each month on our bill. The only administration involved is printing off a single sheet each month. To date the administration charges is €963. I am really annoyed about this. We were never informed by the store this would happen nor did we sign any agreement. My question is,where do I stand legally on this matter? Do I have to pay any or all of this amount. We still have €3000 left to pay which I'm hoping to get paid very soon.Any advice would be greatly appreciated.

    Regards
    Emma

    What do the terms on the receipts that you signed say? Once these charges started to appear did you contact the business or ignore them?


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    #3
    Spocker
    Moderators Posts: 6,855 ✭✭✭Spocker


    Do you mean you built up a debt (rather than credit) with them? If you were always in their debt, I wouldn't think it unreasonable that they apply some kind of charge (administration aka interest), but they should certainly have informed you beforehand


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    #4
    ytpe2r5bxkn0c1
    Closed Accounts Posts: 32,688 ✭✭✭✭ytpe2r5bxkn0c1


    If you owe for materials for at least 2 years then it sounds reasonable to charge administration for managing the debt.


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    #5
    delahuntv
    Closed Accounts Posts: 1,532 ✭✭✭delahuntv


    2 years credit and no interest payments and you are still paying off after completing the house?

    Wow - that is the most generous store ever.

    My guess is a nominal interest charge is being applied.

    if you took a personal loan out with a bank the charges would bd about €6,000!!!


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    #6
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    They don't just get to charge interest or admin charges however they feel. It must be laid out in the agreement the op signed up to originally.


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    #7
    Amelia09
    Registered Users Posts: 6 ✭Amelia09


    Yes we are in debt to the store. We didn't sign any agreement nor was administration mentioned in the terms of any receipt


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    #8
    clint_silver
    Registered Users Posts: 2,895 ✭✭✭clint_silver


    Amelia09 wrote: »
    Yes we are in debt to the store. We didn't sign any agreement nor was administration mentioned in the terms of any receipt

    have they any "general terms and conditions" on a website where interest charged is specified. Whilst you might not have signed something specific, if their general terms mention it youre liable.
    As per others above, would be very generous of them to give it ex gratia without interest.


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    #9
    Amelia09
    Registered Users Posts: 6 ✭Amelia09


    clint_silver wrote: »
    have they any "general terms and conditions" on a website where interest charged is specified. Whilst you might not have signed something specific, if their general terms mention it youre liable.
    As per others above, would be very generous of them to give it ex gratia without interest.

    No nothing on their website.I agree that you should have to pay something but nothing was mentioned or agreed upon. Does the fact we've paid them in 2 years 40,000 not count for nothing. I don't want to fall out with the shop,we have been very good customers to them and given them a lot of work.I feel we certainly shouldn't have to pay all of it


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    #10
    moleyv
    Registered Users Posts: 1,580 ✭✭✭moleyv


    Ask them what it is for and decide if its reasonable.

    900e fees/interest on 40k is nothing.

    You say you gave them good business and yes 40k is substantial, but for two years they have money tied up in sales to you and maybe they are paying interest on buying the stock in the first place.


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    #11
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    Back of an envelope: total spend over two years is €40k. Debt building up from zero over a period, and now being reduced towards zero again. Assume average indebtedness over the two years is €15k. Assume that the admin charge hits a top of €1k. That's equivalent to an annual interest rate of about 3.3%. Cheap finance.

    The next question is whether they are entitled to it - legally entitled, not just morally entitled. My guess is that they are, that you have overlooked something in your documentation. Pick up the phone or send an email asking them to explain the basis of the charge.


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    #12
    Victor
    Registered Users Posts: 78,321 ✭✭✭✭Victor


    Amelia09 wrote: »
    I agree that you should have to pay something but nothing was mentioned or agreed upon.
    What are the payment terms? For most, it is likely to be cash. For builders, they might get 30-60 days from day of delivery. You seem to have had their money for years.
    Does the fact we've paid them in 2 years 40,000 not count for nothing.
    Well it might. What prices were you paying? List price or trade price? It might be possible to do a deal if you were paying full price.
    I feel we certainly shouldn't have to pay all of it
    Try that the next time with your bar tab.


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    #13
    clint_silver
    Registered Users Posts: 2,895 ✭✭✭clint_silver


    Heres a credit agreement application from omahonys.

    http://www.tjomahony.ie/downloads/application_form.pdf

    Down the bottom. 2% above bank rate once overdue date hit.

    I find it hard to believe any business worth their salt wouldnt have something similar somewhere, either online or in their shop somewhere. It protects them and you. especially with a builders providors due to the nature of the that business and the frequent application for credit.

    As above, ring them. be amazed if there isnt something there along same lines as that agreement pdf.


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    #14
    antoinolachtnai
    Registered Users Posts: 9,776 ✭✭✭antoinolachtnai


    963 euros is really cheap for two years of finance. It would cost you a lot more at the bank.

    A reason they might be charging the admin fee is that you aren't actually buying anything in the store, just paying off the overhang. This is not really what credit in a builders' providers is intended for. I'm sure they have a term somewhere in relation to keeping open accounts that are basically inactive.

    The store could easily say that they never agreed to finance your project for free. If it went to court (which obviously it shouldn't) the onus would be on you to prove that they had agreed to these terms, because they are extraordinary.

    The other side of it is that if you decide you are unhappy now with the terms that are applied, or even if you find you really never signed up to these terms and that you are in the right legally, your supplier could require you to pay in full, immediately.


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    #15
    Mr. Incognito
    Registered Users Posts: 9,798 ✭✭✭Mr. Incognito


    Thats unbelievably cheap

    Try a loan for 40k and see what the interest would be ffs.


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    #16
    delahuntv
    Closed Accounts Posts: 1,532 ✭✭✭delahuntv


    Have you thought of asking them???

    Sorry to be blunt, but it seems you haven;t even asked them, yet come on here looking for a way out of extremely good terms.

    If you try and argu with them that can veary easily apply interest from the date payment was due as per their standard terms and also back date it.

    So choice is ask them and argue and get an exceptionaly generous supplier to start charging a proper interest rate of about 6%-8%, or ask them and accept that they are being exceptionally generous.


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    #17
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    How "generous" the terms has absolutely no bearing on their legality. If the ops didn't sign anything that declares these admin charges then they are simply not liable for them.

    However, it would be extremely unlikely that there were not terms about repayment periods and penalties for missing them.

    OP should have contacted the business as soon as these charges appeared needs to speak to the business asap.


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    #18
    Melendez
    Closed Accounts Posts: 1,645 ✭✭✭Melendez


    This post has been deleted.


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    #19
    antoinolachtnai
    Registered Users Posts: 9,776 ✭✭✭antoinolachtnai


    runawaybishop wrote: »
    How "generous" the terms has absolutely no bearing on their legality. If the ops didn't sign anything that declares these admin charges then they are simply not liable for them.

    That may well be true, but on the other hand, the supplier is entitled to call in the unpaid debt without notice if a repayment schedule was not agreed.


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    #20
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    antoinolachtnai wrote: »
    That may well be true, but on the other hand, the supplier is entitled to call in the unpaid debt without notice if a repayment schedule was not agreed.

    Absolutely, but they have not and they cant just arbitrarily stick 1k onto the debt.


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    #21
    antoinolachtnai
    Registered Users Posts: 9,776 ✭✭✭antoinolachtnai


    The problem is that the OP is not in a position to repay the whole debt now. By getting into dispute the OP could be opening up needless trouble.

    In practice, I'd imagine that in the terms on the reverse of the invoice there will be some provision for late payment on old balances, so it won't be completely arbitrary. They might not have this, but I'd be surprised. I wouldn't think there is any builders providers who won't have a fairly onerous set of terms and conditions in relation to credit. It's the nature of the business.


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    #22
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    antoinolachtnai wrote: »
    The problem is that the OP is not in a position to repay the whole debt now. By getting into dispute the OP could be opening up needless trouble.

    In practice, I'd imagine that in the terms on the reverse of the invoice there will be some provision for late payment on old balances, so it won't be completely arbitrary. They might not have this, but I'd be surprised. I wouldn't think there is any builders providers who won't have a fairly onerous set of terms and conditions in relation to credit. It's the nature of the business.

    Yes, agreed. The OP hasn't really come back with much info. They also should have engaged properly with the providers.


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    #23
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    runawaybishop wrote: »
    ... If the ops didn't sign anything that declares these admin charges then they are simply not liable for them....
    Not quite. If notice was given of the terms on which credit was allowed - for example, printed on statements of account - then the action of buying on credit and running a continuing large balance can be contractual acceptance of the terms.


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    #24
    runawaybishop
    Registered Users Posts: 9,504 ✭✭✭runawaybishop


    P. Breathnach wrote: »
    Not quite. If notice was given of the terms on which credit was allowed - for example, printed on statements of account - then the action of buying on credit and running a continuing large balance can be contractual acceptance of the terms.

    Op said there was no notice of these charges on any statements. Typically all purchases are signed for and in the event of late payment an interest rate or flat fee is charged, not an admin fee. But this is all easily investigated by the op speaking to the provider.


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