Direct debit fee in doubt

It’s not okay to charge tenants a fee for the privilege of paying by direct debit in Victoria – at least according to a recent tribunal decision which may have repercussions for thousands of landlords.

Michael Palmer, a prominent anti-fines campaigner, challenged the $1.65 monthly fee – winning a refund of $13.20 he’d paid Ray White Real Estate over eight months as well as $38.80 in costs in the Victorian Civil and Administration Tribunal.

He was not awarded more than $3300 claimed in damages.

The Tribunal referred the case to Consumer Affairs Victoria (CAV), which encouraged any tenants concerned with being charged such a fee to get in touch.

The Victorian Residential Tenancies Act 1997 says landlords cannot demand a fee relating to the establishment or use of direct debit payments for rent payments.

Lisa Pennell of Ray White Corporate told RentCover Report the company’s legal understanding was that the fee was part of an agreement between the tenant and a third party which ran the IP Payment Gateway used for direct debit.

Tenants could pay rent without a fee by using other methods, she said.

“We are currently in a dialogue with CAV but have yet to receive any further clarification,” she said.

“At this point payment systems like IP Payment Gateway continue to be offered to customers in many Victorian real estate offices as part of a range of choices in how tenants are able to pay their rent, in line with our existing understanding of the legislation.”