"Business day" and "due date" for bills

Question

I've come across this situation a couple of times and I'm a bit confused. Say I have a wireless bill which shows a due date of July 24 2016 (a Sunday). I submit an online payment from my bank on the 21st. These payments always arrive in two days, and in this case the payment does clear on the 23rd (a Saturday) as far as I can tell.

Yet the company says it didn't arrive until the next business day (Monday the 25th), which triggers a late fee. So it seems the true due date isn't the 24th but the 22nd which is the last business day before the due date. How is this logical? Why would the payee use a due date which isn't a business day?

To make this worse, they say that I could have gone to their web site and made a CC payment on the 24th (the not-a-business-day due date) which would have been accepted. Which sure makes it look like the 23rd and 24th were business days for them. Naturally they don't see the issue -- I'm a deadbeat and that's that.

Do I have an argument for forgiving the late fee, or not?

Answer 1

I don't believe Saturday is a business day either. When I deposit a check at a bank's drive-in after 4pm Friday, the receipt tells me it will credit as if I deposited on Monday.

If a business' computer doesn't adjust their billing to have a weekday due date, they are supposed to accept the payment on the next business day, else, as you discovered, a Sunday due date is really the prior Friday. In which case they may be running afoul of the rules that require X number of days from the time they mail a bill to the time it's due.

The flip side to all of this, is to pick and choose your battles in life. Just pay the bill 2 days early. The interest on a few hundred dollars is a few cents per week. You save that by not using a stamp, just charge it on their site on the Friday. Keep in mind, you can be right, but their computer still dings you. So you call and spend your valuable time when ever the due date is over a weekend, getting an agent to reverse the late fee. The cost of 'right' is wasting ten minutes, which is worth far more than just avoiding the issue altogether.

But - if you are in the US (you didn't give your country), we have regulations for everything. HR 627, aka The CARD act of 2009, offers -

‘‘(2) WEEKEND OR HOLIDAY DUE DATES.—If the payment due date for a credit card account under an open end consumer credit plan is a day on which the creditor does not receive or accept payments by mail (including weekends and holidays), the creditor may not treat a payment received on the next business day as late for any purpose.’’.

So, if you really want to pursue this, you have the power of our illustrious congress on your side.

Answer 2

You definitely have an argument for getting them to reverse the late fee, especially if it hasn't happened very often. (If you are late every month they may be less likely to forgive.)

As for why this happens, it's not actually about business days, but instead it's based on when they know that you paid. In general, there are 2 ways for a company to mark a bill as paid:

1. They receive a payment by paper check, or by electronic bank transfer. In both of these cases the date your account is credited is the date they receive the money. That probably means the date the paper check is touched by an employee, or the date at which funds electronically end up in their bank account. Until they receive the paper check or see money in their own account, they have no way of knowing that your bill was paid.
2. You initiate an electronic payment (bank account/debit/credit card) through the company's online payment system. When you do this, your account is credited on the date you initiate the payment (which could be a future date if the system allows for that). Now the company knows you have intended to pay, even though they may not actually receive the funds for another few days. (And if your payment doesn't clear they may retroactively charge a late fee.)

Late Fees: Some systems automatically assign late fees at the start of the day after the due date if money has not been received. In your case, if your bill was due on the 24th, the late fee was probably assessed at midnight of the 25th, and the payment arrived after that during the day of the 25th. You may have been able to initiate the payment on the company's website at 11:59pm on the 24th and not have received a late fee (or whatever their cutoff time is).

Suggestion: as a rule of thumb, for utility bills whose due date and amount can vary slightly from month to month, you're usually better off setting up your payments on the company website to pull from your bank account, instead of setting up your bank account to push the payment to the company. This will ensure that you always get the bill paid on time and for the correct amount. If you still would rather push the payment from your bank account, then consider setting up the payment to arrive about 5 days early, to account for holidays and weekends.

Answer 3

It's likely that your bill always shows the 24th as the due date. Their system is programmed to maintain that consistency regardless of the day of the week that falls on. When the 24th isn't a business day it is good to error on the side of caution and use the business day prior.

It would have accepted using their system with a CC payment on the 24th because that goes through their automated system. I would hazard a guess that because your payment was submitted through your bank and arrived on the 23rd it wasn't credited because a live person would have needed to be there to do it and their live people probably don't work weekends.

I do much of my bill paying online and have found it easiest to just build a couple days of fluff into the schedule to avoid problems like this. That said, if you call them and explain the situation it is likely that they will credit the late charge back to you.