Legal Question in Consumer Law in California
The broker who sold me my current vehicle made a mistake and had me sign a contract which states that if I am more than 10 days late on my payment I will be charged 5% of the amount of the payment that is past due, which is less than $13. The finance company, however, is charging me $30 per late fee. I informed them of their error and they stated that the broker should not have included that clause in my contract because their late payment policy is $30 per late payment. I've already read and re-read my contract and nowhere is there a mention of a $30 fee per late payment. Can the finance company do this? If not, what are my options?
1 Answer from Attorneys
If you never agreed to a $30 late fee, it is unenforceable. Even if you had agreed, it probably is an unenforceable penalty, since late fees in excess of 10% are virtually never upheld. Your options are basically to convince them to charge the agreed amount, take them to court on a declaratory relief cause of action to have the excess charge declared unenforceable by a court, or pay on time every month and eliminate the issue.
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