Proper Statement Disclosure of Late Fee

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Question:

On our VISA statements we show "Late Fee Due" then reflect a running total of all debited late fees. i.e. if late fee is $16.00 and customer has three due we show $48.00. Our internal auditor claims we need to show the late fee in the transaction history if a total is used. Oue vendor states that Section 226.7 allows the total of like charges is acceptable. What is the proper way to disclose?

Answer:

Official Staff Commentary Section 226.7(h);

4. Itemization — types of other charges. Each type of other charge (such as late payment charges, over-the-credit-limit charges, ATM fees that are not finance charges, and membership fees) imposed during the cycle must be separately itemized; for example, disclosure of only a total of other charges attributable to both an over-the-credit-limit charge and a late payment charge would not be permissible. Other charges of the same type may be disclosed, however, individually or as a total. For example, three ATM fees of $1 may be listed separately or as $3.

I agree with your internal auditor. In my opinion the only way you can lump them is if they were all charged in the same billing period. I do think you could itemize the late charge assessed for the current billing period and then have another box that showed total late charges due.

First published on BankersOnline.com 10/03/05