Suit settled over Hwy. 407 late-payment charges

TORONTO (March 10. 2003) — A class-action lawsuit that claimed the managers of the Hwy. 407 toll route near Toronto charged an excessive rate of interest on late fees has resulted in a proposed settlement that would reimburse millions of dollars to complainants.

The lawsuit stemmed from a complaint by Richard Prendiville of Waterloo, Ont., who was charged a late payment penalty of $30 on an outstanding balance of 12 cents in February 2001. That’s a 300,000 per cent interest rate; the maximum annual “criminal rate” of interest is 60 per cent under Ontario’s Criminal Code.

As part of the settlement, 407 ETR will offer a $6 credit on the accounts of up to 840,000 customers who were charged its $30 late payment fee. The toll operator pledged to improve its fee collection methods and customer service. As well, anyone who has been charged the late payment fee as a result of an administrative or system error will be eligible for a credit of the entire $30 amount.

As of April 7, 407 ETR will replace the $30 fee with fees that are directly tied to the collection costs, the company said in a release. Drivers who haven’t paid their bill in three months will be charged a $12.50 collections fee. If the customer fails to pay that, they face a $12.50 enforcement fee.

A court must approve the settlement. A hearing to consider the settlement is to be held April 23. Once approved, drivers can claim a credit by completing a coupon that will be published in a number of Ontario-based newspapers.


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