Unexpected loan repayment

moog

Hi All,
I have been trying to get debt free for some time.

But now I just found out that my loan had been payed off by someone.
I have no idea who, and noone I know would (or could) have done it.
My guess is someone at the bank has made a mistake.

I only noticed when my monthly payment never went out and when I gave them a call they only said that it had been payed off.
They are sending me a letter to confirm this.

What should I do to check this out?
And are there any legalities I should be aware off?
Cheers,
Moog

Stonk

What should I do to check this out?

If the institution says it's paid off, and you told them there must be a mistake, and they said, no, really, it's paid off - then I think that's an entirely reasonable amount of checking.

And are there any legalities I should be aware off?

If it turns out to be a mistake, you will still owe the money. So don't spend it (although I think they would cut you some slack rather than demanding immediate repayment, given it's their error).

They have 6 years (I think) to discover the mistake during which time the debt will be enforceable.

Realistically, it could easily be that the settlement of someone else's loan has been allocated wrongly to yours. You should expect this to be noticed within a couple of months, because some poor person has just paid off their loan and is going to start making enquiries when the payments continue to be taken.

Then again, someone paid a chunk of money into my credit card account once and although I phoned up six consecutive months telling them there had been an error, it was never corrected.

inmypocketnottheirs

Years ago, I had a personal loan with the National and Provincial Building society who were subsequently taken over by Abbey National, then converted to Abbey PLC. I made about 10 repayments off of a 36 month agreement, cancelled my direct debit as I moved bank, expecting them to write to me saying my payment was missed, and then set up a new direct debit. Never heard a thing, not a dicky bird!!

So banks DO make mistakes, I'd keep shtum (you have already put your hand up) and let them come after you. If and when they do just offer to resume payments. Thats my advice!!

Stonk

It's a fine line, determining how many times you should tell them. You know you probably do owe the money, but you cannot reasonably be expected to chase them about it for ever. But if you have only phoned them and sort of tangentially asked why your payment wasn't taken, without mentioning that you think there has been an error, then that's not enough. I don't know what you said to them.

For me, it took 6 calls, one per month, until my conscience allowed me to let it go and keep the money. Personally, I would write a letter stating clearly that I think there has been an error. If nothing changes, (fairly) clear conscience.

moog

Thanks for the reply

Stonk wrote:

They have 6 years (I think) to discover the mistake during which time the debt will be enforceable.

Would they charge interest in this period do you think?

Stonk wrote:

Realistically, it could easily be that the settlement of someone else's loan has been allocated wrongly to yours. You should expect this to be noticed within a couple of months, because some poor person has just paid off their loan and is going to start making enquiries when the payments continue to be taken.

This does seem to be likely.
I will query it again when they get the letter to me.
Cheers,
Tim

moog

Stonk wrote:

It's a fine line, determining how many times you should tell them. You know you probably do owe the money, but you cannot reasonably be expected to chase them about it for ever. But if you have only phoned them and sort of tangentially asked why your payment wasn't taken, without mentioning that you think there has been an error, then that's not enough. I don't know what you said to them.

For me, it took 6 calls, one per month, until my conscience allowed me to let it go and keep the money. Personally, I would write a letter stating clearly that I think there has been an error. If nothing changes, (fairly) clear conscience.

Yes, it's unfortunate that I'm honest
I certainly wouldn't want some poor chap who thinks he's paid off his loan getting stung.

moog

Hi All,
Well I contacted the bank who phoned back today.
It seems it was paid into the wrong account by a guy who was trying to pay off his own loan.
My bank seemed rather efficient and apologetic for them so I am assuming someone there has made a major boo boo here.

The short story is my debt-near-freeness is coming to an end and I will be getting a new loan to cover what was unpaid out of my old one and the other poor sod gets his loan paid off finally.
A good oportunity to negotiate a better loan for me this time I think.
That pesky PPI can go for a start, (wish I had never taken it).
Cheers,
Tim

:xmassmile