Q: My local pharmacy charged me interest of 10%. Can they do this?

I have an account with my local pharmacy. I went on holiday completely forgetting to settle the account, and so I was about three weeks late in paying. When I got my next statement I was surprised to see that they charged me interest of 10%. Can they do this? It seems a bit excessive.  

A:

This transaction would be viewed as an “incidental credit transaction” in terms of the National Credit Act, and the maximum interest rate that they can charge in terms of this Act is 2% per month, provided there is a written agreement in place. In the interests of clarity, we always suggest that creditors, suppliers and service providers who intend on charging interest should have written terms. These terms should include an interest clause that specifies the interest that will be charged on overdue amounts (no more 2% per month).

You can approach the pharmacy and ask for the interest charge to be reversed on the basis that it’s unlawful. If they refuse, you could report them to the National Consumer Tribunal for charging interest in contravention of the NCA.