QUESTION

I have paid off and received the title to my car. Six months after the account was closed, I receive a letter that says an error was made, re: paymt

Asked on Dec 29th, 2011 on Business Law - Massachusetts
More details to this question:
I financed a car through Chase Auto Finance in Feb 2007. In the early part of 2011, I had sent a payment through Western Union to Chase to satisfy a payment. In June 2011, I came into some money, and I was able to pay off the rest of my money owed, which released the lien, and the car became mine. I received a letter stating the car had been paid off, and I had also received the title, which is signed to my name. Earlier this month, I get a letter from Chase saying that Western Union had made a mistake and sent the my payment through them twice. Therefore, the amount I was quoted when I paid off my car was less than was actually owed (although it did not show in their computers at the time). So now they have reopened the account, and demand payment for the amount, which was in error. My question is this: do I owe them the money? They quoted me the price to pay off, told me the car was paid off, and sent the title. The error was on their end. Do I need to pay for their mistake?
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1 ANSWER

Litigation Attorney serving Greenwich, CT
Partner at Hilary B. Miller
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These are always unsatisfying situations. As a general matter, you have a duty to pay the creditor the amount that was properly due and owing, even if one or both of you made a mistake regarding the balance due. The provision by the creditor of a payoff statement or an oral quotation of the amount due -- legally, an "account stated" -- gives you little shield because it contained an error. Most creditors only provide payoff statements that provide, in writing, that they do not preclude the creditor from collecting the correct amount due (a non-"estoppel" term). So, in answer to your question regarding whether you "need to pay them for their mistake," the answer is that both of you were mistaken regarding the balance due, and therefore the original contract terms are controlling.
Answered on Dec 29th, 2011 at 1:58 PM

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