Balance owed but Company state otherwise

Cow_Dung

I am looking to find out some information for a good friend of mine :- He owes quite a bit of money to several Company's and is currently paying them off directly.

He got a cheque back from one of the Company's for a small amount of money and a letter saying that it was refund due to an overpayment on the account and looking back over what he owed to them this is a mistake.

I said he needs ring and ask for a letter stating that the account has been cleared in full and closed - My question here is if this Company does the above and then a few months down the line they write again and realise there mistake would the letter and cheque back be enough to have the balance owed written off in full or would he have to pay back any remaining balance owed ?

I think it is written off if a letter states the account is closed but cannot find clarification anywhere online.

Thanks in advance.

FireWyrm

Ooo...grey area to say the least.

If he owes them money, then they do have a right to ask for it to be repaid regardless of who made the mistake. We can see this principle in action with the likes of HMRC who routinely demand overpayments to be returned even though there is no way the claimant could have known it was wrong.

My advice, is to write to the company and ask for a last statement of account. I would ask that this shows the account has been closed and all previous obligations met. This might force them to acknowledge any mistakes before this potentially gets out of hand and comes back to bite him later.

In the meantime, put the money into a savings account and ensure that it isnt touched until after you have had firm written confirmation that all is well.

fermi

If there has been a genuine mistake then if push came to shove it's likely that a court would acknowledge that and regard the debt as still valid.

Much more complicated, but http://www.alway-associates.co.uk/legal-update/article.asp?id=53

Cow_Dung

FireWyrm wrote: »

Ooo...grey area to say the least.

If he owes them money, then they do have a right to ask for it to be repaid regardless of who made the mistake. We can see this principle in action with the likes of HMRC who routinely demand overpayments to be returned even though there is no way the claimant could have known it was wrong.

My advice, is to write to the company and ask for a last statement of account. I would ask that this shows the account has been closed and all previous obligations met. This might force them to acknowledge any mistakes before this potentially gets out of hand and comes back to bite him later.

In the meantime, put the money into a savings account and ensure that it isnt touched until after you have had firm written confirmation that all is well.

FireWyrm that was my thoughts as well and said that he needs a written confirmation from them stating it is cleared and then closed - The balance due is nearer side of £1000.00 and if they notice this which I would imagine they would do at some stage then if paperwork is sent saying otherwise they should by rights have to quash an amount owed.

I know his financhial position at the moment is not good and a £1000.00 written off would help him out - I also see the other side of this but concluded that the mistake is not his so why worry to much.

FireWyrm

I really think you need to force them to re-assess the situation. Tempting as it is to hope this 'all goes away', it may not be the correct course of action as they can legally come back and slap your friend with the debt and all that goes with it. However, if he queries it, forces them to recalculate and receives a letter stating categorically that he doesnt owe the money, he's in a much better position. At that point, he will have done everything reasonable to help the lender. After that, it's their own fault - I agree. But it could go either way in a court. Best course of action is to go above and beyond to get their attention.

Cow_Dung

FireWyrm wrote: »

I really think you need to force them to re-assess the situation. Tempting as it is to hope this 'all goes away', it may not be the correct course of action as they can legally come back and slap your friend with the debt and all that goes with it. However, if he queries it, forces them to recalculate and receives a letter stating categorically that he doesnt owe the money, he's in a much better position. At that point, he will have done everything reasonable to help the lender. After that, it's their own fault - I agree. But it could go either way in a court. Best course of action is to go above and beyond to get their attention.

I have told him to email them and ask for a full statement and a letter stating that no balance is owed against this account - If they then post this out with a statement showing a zero balance then he has done all that is possible to check the figures.