I think the notion of having a steep penalty isn't necessarily bad. My problem is how he implements it. It's totally unreasonable to charge someone %10 if they're 15 minutes late. It's even more unreasonable to implement the same penalties for someone who is 15 minutes late and someone who is 7 days late. If he is going to be that strict, he should charge per day and not per week.

Think about it. If I forget to pay and he charges me %10, I'm probably going to wait the whole week to pay him just to make life harder for him as payback. This system over-punishes people who have just made mistakes and encourages and enables his customers to antagonize him.