Disputing fees or interest on a debt
If fees or interest look unfair or unexpected, you can ask for the contract terms and dispute the charges.
This guide helps you
- Recognise when fees or interest may be unfair or unexpected
- Know how to ask for the contract terms behind a charge
- Learn how to dispute specific fees in writing
- Understand the difference between contracted and added charges
- Find free help to assess and escalate
7 min
What's happening
A debt's balance can grow because of fees and interest. Some of these are agreed in your contract; others may have been added in a way you didn't expect or that seems unfair — like high default fees, repeated late charges, or interest that keeps compounding. You can ask for the basis of each charge and dispute the ones that don't stack up. This is general information, not legal advice.
Your first steps
- Separate the charges from the original amount you borrowed or owed.
- Ask for the contract terms that allow each fee and the interest rate.
- List the charges you think are wrong or excessive.
- Don't pay disputed charges blindly to make it stop.
Step by step
- Request a full breakdown of fees and interest with dates.
- Ask which contract term authorises each charge.
- Dispute specific charges in writing, explaining why each is unfair or unexpected.
- Ask for the balance to be adjusted and confirmed.
- Escalate to a free external dispute resolution scheme if they can't justify the charges.
What evidence helps
Helpful evidence includes the original credit contract showing the agreed rate and fees, statements tracking how charges were applied, and any letters about fee changes. If you're in hardship, that may also be relevant to whether continuing to add charges is fair. Look up terms like "default interest" and "comparison rate" at directory.merion.com.au/glossary.
Where to get free help
A financial counsellor can help you read a fee-laden statement — call the National Debt Helpline on 1800 007 007 (free). For credit products, you can usually escalate fee and interest disputes to AFCA once you've complained to the firm. Free legal help can advise whether charges may be unfair.
Key takeaways
- Separate added fees and interest from the original amount owed
- Ask which contract term authorises each charge
- Dispute specific charges in writing with reasons
- Free help can assess fairness and escalate to AFCA
Frequently asked questions
Can a creditor add any fees they like?
No — fees and interest generally have to be allowed by your contract and the law. Ask for the term relied on and get free advice if a charge looks unfair.
What if interest keeps growing on a debt I'm disputing?
Raise this when you dispute, and ask the creditor to hold charges while they investigate. A financial counsellor on 1800 007 007 can help.
Who decides if a fee is unfair?
If you can't resolve it with the firm, a free external dispute resolution scheme such as AFCA can consider whether a charge was fair.
This is general information, not legal or financial advice. Your situation is unique and rules can vary by state and over time — for advice on your circumstances, speak to a free financial counsellor (National Debt Helpline 1800 007 007) or get legal help.
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