Old Employer Accidently Overpaid Me Now Demanding Repayment Threatening Collections

by Jami
(Michigan)

My husband recently changed employers and after he left his previous employer we received a letter in the mail from them stating that they had accidentally overpaid him for one month. At that time they were asking for repayment, we did not respond to the letter. Now they have sent an additional letter which states that if we do not repay the "overpayment amount" they will forward it to a collections company!! Are we liable for this? In my mind this was a mistake made by the company and not by us. We were informed of it several months later, after the money had already been spent, and now they are trying to collect it! I do NOT want this to show up on my husband's credit report as he has great credit and we are looking to purchase a vehicle shortly!! What sort of action should we take?

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Feb 24, 2010
 overpayment by employer
by: Gerri

It sounds like you don't dispute the fact that your husband's employer paid him, but you don't have the money available to pay it back. I would be surprised if the employer can't ask for the money back, but you can always check with an employment law attorney to find out if that is the case.

If your husband does owe them the money, they are entitled to turn it over to collections. If you don't want that to happen, I would suggest he talks with the employer and works out a payment plan. They certainly don't want to have to hire a collection agency (that will cost them money upfront, or a commission on the amount they collect), and should be willing to work with you. Just make sure you get the agreement in writing, and make sure they specify that they won't turn it over to collections if you pay it back as agreed.

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