Termination fees

[DOC]

Specifically, if an electricity contract has an early termination fee of $95, what happens if it is not paid? I'm thinking it may affect a credit rating or be taken to the small claims court?

[Zelezny Chucks]

It will be sent to a debt collector and may affect your credit rating.

[Mythical Creature]

I was going to refuse to pay one with Australian Energy about six years ago, cause when I rang up for a disconnection and a re-connection at a new place they said it would be 2-4 weeks before either. It didn't bother me so much about the dis-connection but I needed power hooked up to my new place within the week, so I went with AGL and broke my contract with Australian Energy.

Anyway, I ignored the notices until the final notice which had a threat that if I didn't pay by 7 days they would refer my account to a collection agency and that it will affect my future credit rating. I ended up paying it cause I didn't wanna take the chance of affecting my credit and I figured that for the sake of about $100 it wasn't worth the hassle. Not sure if they would've come good with their threats or not.

Not sure if that entirely answers your question though!

[DOC]

Thanks for both replies. Sounds right.

[Hondo]

Because you can't control whether they will put a note on your credit rating I'd recommend trying to negotiate out of it rather than ignoring it. But, if contractually you are stuck then I think you are stuck.

You don't want the note on your credit rating. It's virtually impossible to get it removed and every time you apply for a loan it will come up.

If they end up taking you to court you then have to pay their court and collection costs and you might end up paying $1,095 instead of $95.