About a year and a half ago, a check for $1100 arrived in my mail from a well-known mortgage company. This was a few months after closing on a house that I sold in the neighboring county, and referred to a reimbursement for property taxes, so I assumed it was part of the escrow returned after you clear a mortgage. A few more months go by, and I get
a letter from them stating that the payment had been a
mistake and I should return the dough. They referenced somebody else’s name at some other address, but the amount was the same. They emphasized that they recognized that it was not my fault and regretted the inconvenience.
I ignored it until just before christmas. I got a dun from a
collection agency wanting payment in full. I called and told them I
didn’t think I owed anybody anything since it referred to a house that was sold, and any outstanding real estate related bills should have been presented and cleared at closing, and that closing was just that: closing.
A couple more months go by, and I get another insistent letter
requesting payment on a “legal debt”, so I reply with a list of
questions: How did I incur this “debt”? If it’s not my fault, why are you bothering me? Why don’t you go after whose fault it is or that guy in the original letter? What did I buy or fail to pay for, creating this “debt”? Is not the real estate closing final? Why don’t you present your problem to the closing agent? What law or legal authority will you cite in collecting this “debt”? (I added that it has been a matter of considerable inconvenience to me, and that I should be compensated for my trouble.)
No answer to my questions, but now I’ve received a letter with a
prominent “DEMAND FOR PAYMENT” at the top, and I returned it, as requested, saying that I would be home Friday night to discuss it with them. If this money belonged to a friend or any individual, I would have returned it at once, but since it’s a blood sucking impersonal mortgage company, to the likes of which I’ve paid many thousands, I see it as my chance for some retribution. Of note is that the collection agency is in Houston TX. I’m thinking of asking them if they’ve heard of Enron, and do they think Enron is going around asking for all the money they’ve
What do you think, do I have a chance? Should I take it up with the mortgage company or say “Let’s go to court”? Should I record the call? Am I just greedy - no, wait don’t answer that one.
They gave you the money. At the time, you thought that the money was really due to you. What’s more, any reasonable person would have thought the same thing as near as I can tell. A fair amount of time has passed since the money was given to you. IANAL but I think that the money is rightfully yours.
On the negative side, they can and probably will ding your credit rating and it will be a pain in the ass to get that fixed.
But it was not yours. You acknowledge that it was not yours. There was a mistake made, a mistake of fact.
Unless you changed your position in reliance of this mistake, there is no estoppel by the erring party to claim its own money, money that they were suppose to pay someone else. It was not your money and to keep it would be unjust enrichment. Laches may estop them, but “a fair amount of time” would probably be much more than “a few months.”
Thanks, y’all. It looks like I’'m screwed, or at least forced to be somewhat honest. I’ll try to negotiate with them, I sure as hell don’t have the money right now. (this computer is why - if that counts as “changing my position”.)
So… if a company makes a mistake on a bill and overcharges you by a few “Cnotes” , and you find out about it say, 6 months later, and demand the overcharge difference back, they are not obligated to pay you back? Isn’t this usually called umm… stealing?
Cannot for the life of me find a cite for this, as I have completely forgotten where I read it. The details may be a bit arse-about-tit as a result.
This bloke was an accountant, and so took care of his adult son’s personal accounts. He noticed odd payments of $1,000 per month appearing in his son’s account from their insurance co / bank / whatever. So, the dad used this dough to pay an extra grand a month of his son’s mortgage, figuring this was the best use for it.
Cut forward a year or so, and the over-generous insurance co realised their mistake and demanded their money back. Father realised that they were entitled to this, but pointed out that they no longer had the money - and that he hadn’t committed fraud as he genuinely thought that the money belonged to his son. Anyway, to cut a long story short, the insurance co had to agree to accept the money back in installments - ridiculously small ones, if I remember correctly.
I suspect that the money is legally yours as you did nothing to solicit the money, and the company sent it to you through their own error. Which will do nothing to alleviate the harassment you’re receiving.
However – and this is important – I am not a lawyer. And it sounds like you need some proper legal advice. Which may end up costing you more than the original $1100.
I’d recommend trying to find a reasonable human being to talk to and come to some arrangement with them. But again: see the above caveat.
Much depends on the precise laws of your state. But, in general terms, if you received the money in good faith, genuinely beleiving it was yours (and I think you did) and if you altered your position to your detriment in reliance on this then they will have a problem recovering it.
Does spending the money in buying a computer count as altering your position to your detriment? I think quite possibly yes.
Normal process in such cases is to negotiate payment of the received monies in instalments. They have acknowledged the error, but you also recognise that this money was not yours.
A similar situation often occurs in employment, when an employee is overpaid. Normal practice is to repay (out of salary in this case) an agreed amount over a set period of time.
I would guess that being open and honest from the outset might aid your chances of leading the negotiation and settling on a payment plan you prefer?
Incidentally, this happens a fair bit in employment. Many contracts (including mine) state that where errors are made, the employee is obliged to repay. This happened to a colleague recently who astutely put the extra payments (some £150 a month - c. $220?) for 6 months in a savings account. Despite having to pay back the money, he made about £200 in interest.
However to retain the moral high ground, avoid even more expensive possible legal stuff, and avoid being blacklisted in some way by the company (eg screwed up credit reference) I think you would be best to return it.
I do think though that they should be understanding of your need to pay it back in instalments.
Can I be so bold as to make a suggestion, barbitu8? Maybe you could phrase your reply as you would in a letter to a client? Most people don’t know the difference between a mistake of law and mistake of fact. Most people don’t know what unjust enrichment is, or what kind of beast estoppel is. (And even I struggle with laches. ;))
I’d do it myself, but my recollection of the law of unjust enrichment is pretty shoddy. Your own reply looks perfect, in terms of law, and I should hate to ruin it.
Gad, I love all this. I’ll post the outcome of Friday night’s negotiation/interogation, even if I resort to begging. I think I’d rather deal with the mortgage company than the bill collector though. They may not have authority to accept any less.
Once the mortgage company has sent it to collection, they typically don’t care. The collection agency has paid some percentage of the debt to the mortgage company, and can keep what ever they can collect. Tell them you’ll pay them $500. They’ll come out ahead, you’ll come out ahead.
The collection agency hasn’t paid anything to the client (the original creditor); the way collection agencies work is on a commission basis–they get to keep a percentage of the money collected. I recall this from my 13 months working at one many years ago.
UDS stated where estoppel would apply here, as I also stated, but he gave it in more legal terms. Laches is just such a length of time having passed that enforcement of an action is not equitable. A mistake of law would be in the instance where a party is was just mistaken about the law or the interpretation of the law. This is not a factor here. The OP received money that was not due him, but belonged to someone else. That’s unjust enrichment.
I’m sorry that I can’t explain it better or as I would to a client since I don’t practice law and I’ve been out of law school for 40 years.