Is this storage company unfairly charging a late fee because they cannot process a check fast enough?

April 1, 2007 4:09 PM

I've been using automated payments through my bank to pay a storage company. Lately, they changed their late fee grace period -- and I was hit with late fees. Not because the payment was late, but because they process bank checks in a special and slow way. . .

The check goes to the location that Manhattan Mini Storage directs me to send the check, in Newark. For some reason, the Jersey office cannot process bank checks because it does not have my signature. The check is then mailed to an office in Manhattan, where it gets processed and the payment is complete. But, according to them, late.

As I see it, I am not liable. I sent the payment for the correct amount to the requested location within the acceptable payment period. It is their process that delays a valid form of payment. Am I liable for these fees? If not, how do I get out of them?

I plan to call and speak to a manager, but I am not certain a manager will accept this argument. What's the best way to escalate this?

(Note that this could be more complex because I racked up a few months of fees -- I didn't check their mail because everything had gone well for so long. I want all late fees waived.)

posted by kingfisher, his musclebound cat to work & money (14 comments total)

You might want to check with your bank, and see what they think. Obviously the best way would be to get the fees waived by talking to the manager.

If that doesn't work, you might simply chose to not pay them. Continue making regular monthly payments, and when you move your stuff out, just don't pay the extra debt. Are they threatening to evict you over this?

I'm not a lawyer, but in general payments are considered made when the check is given, not when it's cashed. That's how I've always understood it anyway. Make sure you collect the canceled checks and file them away somewhere.

So if you just don't pay, what option does the storage company have? They can try to ding your credit, or sue you. I doubt they would bother suing (and I don't think they would win either) so if they try ding your credit, you can show the checks to the credit reporting agency and get the charge removed.

That creates a lot of work on your part, though.

The simplest thing to do, if they don't agree to waive the fees is to take them to small claims court.
posted by delmoi at 4:24 PM on April 1, 2007

Simply refusing to pay would be nice if you didn't sign that NASTY contract- and its NASTY. If you refuse to pay, they'll lock your stuff in there so you can't get at it until you do or they'll auction it off to someone like me.

You need to NICELY work it out with the manager. If you even suspect that it will be a battle then you need to seriously consider getting your stuff out of there.

You should call them and tell the manager that you're pretty sure that the reason they're posting your checks late is because you're sending it to the wrong address. Then when he agrees, remind him that you were told to send it there and that you'd be happy to change the address so they get paid on time but you'd appreciate it if they'd correct their mistake (since they told you to send it there) by crediting you the fees.
posted by Thrillhouse at 4:51 PM on April 1, 2007

This is the same bullshit credit card companies have attempted to do for years by surreptitiously moving due dates a little in combination with wilfully slow processing. They are most likely thieves and I would suggest making other arrangements for storage ASAP if the manager route proves unsuccessful.
posted by basicchannel at 5:09 PM on April 1, 2007

While I wouldn't necessarily pull it out unless you have a few contacts and can't reach a resolution, I will point out that by accepting the checks in Jersey and sending them to NY they're making this a multi-state issue, something they might want to avoid if there's even a hint of fraud. They certainly don't want Spitzer's state aiming a gimlet eye at them, given his history of consumer protection the last few years.

You should also look at consumer protection laws in your state. A quick googling on "new jersey law late fee" turns up mention of the state going after Blockbuster and $10 limits on CC late fees.

In your shoes my first step would be to send a registered letter to them indicating that you have insured that all payments have arrived at the address requested by the due date you were informed. Mention that the several months worth came as a surprise to you since you didn't bother to open your mail - all your dealings with them in the past had been without difficulty and you'd seen no reason to examine what you had no reason to believe were anything but uneventful payment notices.

Conclude with the polite but firm request that they remove all late fees and indicate that you'd like to find a pleasant resolution to this problem so that you can continue to use their services. If they'd like you to alter the address your payments are sent to you'd be happy to alter the mailing address but that you will not be penalized for their processing time.

An organization with any sense will solve the problem since a recurring, consistent customer is worth way more in the long run than a few months of fees. But ultimately you should vote with your dollar and. if necessary, remove your things and sue them for the fees in small claims court.
posted by phearlez at 5:54 PM on April 1, 2007 [1 favorite]

I just had a nice long talk this week with my health insurance company and the special slow way they process my health insurance payments. Basically they bill in the middle of the month, and if they have not processed your check (that's processed, not received, not postmarked by, processed) by the first day of the next month, they cancel your insurance effective immediately. I had sent a check on the 17th which had not arrived by last Tuesday and I was in a bit of a snit about the whole thing since there was no way I could pay my bill except send another check to be processed specially and slowly.

In my case this was the check going to a lock box where it was picked up once per day and processed within 24 hours by bank employees. No bank to call, no office to call, no humans to talk to, no credit card payment to make, etc. I wound up driving my check halfway across the state on Friday to give it to someone who did me a "just this once" favor. Ugh.

Anyhow... my suggestion with this is to do two things

- have a "how can we make this right" discussion with them about your late payments, maybe even first. "Hey I'd like to pay on time but I pay this way through my bank, like normal people. So when do I have to mail a check to you to not get stuck in this Special Slow Way nightmare and accrue late fees?"
- have a concurrent discussion about how now that they have punishing late fees (or whatever, I am assuming that they were lenient in the past for checks appearing a few days alte and now they hit you with a fee right off the bat) and the thing you had always been doing suddenly stopped working much to your chagrin. Indicate what you are going to do to solve your part of the problem (pay earlier, could you do that? or have an auto credit card payment) and what they are going to do for you is vanish the late fees during this Period of Your Misunderstanding.

In short, I think the right approach is "Hey, we have had a miscommunication" not "I am not paying these fees, you chisler" and certainly not "Your process is stupid" but I do think you can hook into the "Your process takes longer than other processes I have to deal wtih so my normal techniques for being responsible have failed me and I am eager to correct this" angle and get someone who is sympathetic to kick down or remove the late fees.

If they decide to really be a pain, you will want to have nice cheerful answers to questions like

"Why didn't you open your mail and read about this?"
"Have you been paying late this entire time and just now got Promptness Religion since we started charging you?"
"Why is it in our best interests to help you with this?" and
"How can we be sure we are not going to have this same argument with you every month?"

I was victorious, albeit in a stupid way, with my health care company. I wish you luck with your storage people.
posted by jessamyn at 7:29 PM on April 1, 2007 [1 favorite]

I recently had health insurance canceled because of alleged non-payment. Turns out that the check processing company uses the same playbook as your storage company: an check goes from my bank to their bank, where it is refused because it doesn't come with a payment stub whereupon it goes into a "this is special box" and gets shipped to an understaffed office via two other stops which can take from 3 to 8 weeks apparently.

After being repeatedly accused of paying late, I asserted that I was, in fact, not paying late - my bank and their records assert that I've paid on time. They told me, "but we get everything late because of the electronic payments." "Not my problem" I replied, "and my bank will back me on this. I can't be held responsible for your inefficient payment system."

So get out your records and put your bank to work. If you have the proof of when they went out/arrived, it's not your problem: it's theirs. Politely and firmly refuse to pay the late fees and provide proof that you did, in fact, pay on time and find out what they will do to make sure they don't levy any more.
posted by plinth at 8:15 PM on April 1, 2007

Also, a tip that's probably always true of any phone interaction you have with companies: get the name of the person you talk to. When I had issues with my storage company, I kept getting different answers to the same question from different people I talked to on the phone. I don't know how Manhattan Mini Storage works, but there were fairly large differences of opinion between my local storage office and the main branch.
posted by one_bean at 8:19 PM on April 1, 2007 [1 favorite]

I agree with Jessamyn--short term, ask them if they'll waive the fees, but long term you need to find a better way. Presumably you pay them the same amount every month for this rental. Set that automatic payment up to go earlier. Or send them an extra cheque now so you're always running one payment period worth of credit on your account.
posted by jacquilynne at 8:21 PM on April 1, 2007 [1 favorite]

Thanks for the responses. They are all useful and fascinating. It is comforting to hear of other battles against these corporate monkeyshines. They rile me. Bureaucracies are old-school software, where, unfortunately, people end up as interfaces as well as users. Which is why, despite my frustration I always end up kind.

But I wish I weren't. Companies have engineered a wicked incompetence into their methods to ensure the profit of floats, late fees, errors, and cancellations, expecting us to be too befuddled and worn down to correct their calculated bumbling.

Your stories, jessamyn and plinth, convince that insurance companies are the worst. How clever to get richer the worse you do.

Oh well, as much as I would like to contest this situation with a curt verb-this-body-part, I am just wise enough to realize that it may be counterproductive and may negotiate: drop all the late fees and I will pay you some other way you can handle with more ease and so on. That is, I am right, but am happy to do you a favor.

Thanks for the stories and thoughts. I like the hypothetical challenging questions, and now I have answers for each. Nothing perfect, but striking a nice balance between reason and sarcasm. And if all this fails, I have plenty of transitive verbs and body parts to fall back on.
posted by kingfisher, his musclebound cat at 9:33 PM on April 1, 2007

Late processing is just one technique of nickel and diming clients and customers by vendors and financial institutions. Another technique is for banks to process debits before credits in the hopes of you having an overcharge fee or start kicking in the overdraft fees and supplements. Quite frankly, I am not sure how all my efficiency of electronic payments and prompt payments benefits me.

I would suggest to you to check with your local state attorney general's office about how this widespread abuse of processing times and payments is a consumer rip off. Try both states, of New York and New Jersey. You are definitely not alone in this boat.
posted by jadepearl at 2:40 AM on April 2, 2007

There was a program on NPR, last week, exploring just these sorts of shenanigans on the part of credit companies. It's terribly wide-spread (practically industry-standard) and perfectly legal.

It seems that, following a Supreme Court ruling sometime ago covering usury laws, states across the country went on an orgy of amending (or outright eliminating) state usury laws in an attempt to attract the business of large national financial companies. The upshot, of course, is that any company in those states can play the "nickel-and-dime-them-with-fees" game.

I hope you can work it out with the storage company.
posted by Thorzdad at 4:35 AM on April 2, 2007

I had a similar problem with a credit card company a few years ago: I paid electronically on time, but by the time they processed it, they said I was late.

I called the bank and got all the information about the transaction. Most importantly, I got the exact time my payment was transferred from my account to the merchant.

I called up the CC company and said, "Here are the bank records. The money was in your hands on this date, before your deadline. What you did with it internally after that point is your business." They grumbled about me needing to pay earlier in the future, but refunded the late fee.
posted by Gamblor at 7:38 AM on April 2, 2007

If you're happy with the place, see if they'll let you pay 6 months at a time... if they'll waive those pesky late fees, that is.
Can you drop off a check every month in person? Have it charged to a credit card?

Electronic e-pay stuff seems to be more of a pain in the ass than it's worth.. for reasons like the ones you're seeing.
posted by drstein at 1:11 PM on April 2, 2007

I called. I talked with someone, explained the situation and all fees were waived. A bit of a procedural mess, but not the conflict I expected.
I'll need some other way to relieve my generalized angst. . .
posted by kingfisher, his musclebound cat at 10:26 AM on April 3, 2007