Debt collector adding 27% to debt as 'fees'

[anonuk]

I wasn't really sure where to post this, so apologies if it's in the wrong place.

Our previous commercial landlord has decided after 12 months that we owe them for 'unpaid rent' which I am disputing. However, they have contacted us through a debt collection company who have then added their costs on top. The original balance they say we owe is £960, and the debt collection company is claiming the balance is £1180 which they have admitted includes their fees.

Now, I've worked out the interest at 8.5% and that would come to about £60. I've also looked up what the landlord is allowed to charge for 'debt collection' and that's £40 for debts up to £999.99 but are then allowed to charge additional 'Reasonable Costs', however they are adding 27% to the balance which I would not have thought would be 'reasonable'.

Is there any guidance as to what might be considered 'reasonable'?

Any help would be appreciated.

 

[LawHound]

You need to refer back to the terms of your lease, in many cases there is a clause in there which outlines what charges you can expect to pay (well above the court rates or late payment regs) in the event of a debt issue.

 

[anonuk]

It's the debt collection company that have added the fees, not the landlord. £220 fees on a £960 debt just seems excessive.

 

[GRDCredit]

Taking what you say as face value then the debt was £960 plus interest £60 and late payment fee £40 - total £1060

Debt Collector have therefore added £120 to the debt - say £100 plus VAT

Seems reasonable to me - about 10%

 

[The Sheriffs Office]

That doesn't sound right to me. Who is the debt collection agency (DCA)?

I would suggest they are breaching regulations. For info there is a firm doing similar for unpaid private parking fines at the moment and I understand they are being hauled over the coals by their regulator, the FCA.

I would suggest you demand details of their lawful authority to charge such fees and potentially complain to the FCA or the Financial Ombudsman if they are breaching regulation.

 

[anonuk]

I have received a breakdown of the fee from the DCA, and they have charged 18.2926829268293% plus vat, plus £40 late payment compensation.

Does this sound right?

 

[Paul Kelly ICHYB]

If you do prove that you do not owe the money, you will not have to pay anything!

 

[Solicitor]

Hi,

As per previous replies - the DCA fees sound reasonable. I would suggest however you look more closely at the unpaid rent issue before paying anything.

Law Hound is correct also in respect of fees. A Lease will generally have a clause whereby you are responsible for any reasonable fees incurred by the Landlord of his agents to rectify a breach of the Lease.

 

[nelioneil]

Rent should be easy to see if you have paid on not. Is it just normal rent as per the lease, or is there backrent (i.e. uncharge increase in rent as per the terms of lease).

In commercial leases, there is little to no movement about not paying rent (unlike to an extent, service charges).Establish if you have paid or not first, then worry about the debt collector.