Problem: My sister and her son were both on a loan account. The sixth payment to be made was called in with a check by phone instead of the setup for automatic withdrawl(different account). Notice of receipt was received in the mail for said check by phone. Also, The statement from the finance company (pulled the same day as payment called in) showed payment received. One month and one payment later, the loan was refinanced with the local credit union. The credit union called in for payoff, sent payoff, and as far as I know have received the title. My sister has received her original loan paperwork stamped paid. The finance company is now saying she owes for the 6th payment. We have investigated and there is no record of where they "attempted" to take the funds. They are saying her bank returned the payment. Mind you, the date requested til the time the payment was supposedly refused was a time period of approximately 6 weeks and also 3 weeks AFTER payoff from credit union was received. The finance company admitted they applied credit at the time of the check by phone BEFORE the funds were actually received. I believe that the finance company dropped the ball by not collecting the funds but showing on their billing statements payment was received. They are unwilling to divulge pertinent information but only demand that she pay not only what she owes but also the backdating of the payment plus interest. They are putting the blame solely on the credit union saying they refused the payment. Meanwhile, they have put bad marks on my sister and her son's credit reports. Her loan officer at the credit union has advised she file the necessary paperwork to the credit reporting agencies and not pay. Would you agree? What other avenues can she take?

If she owes the money - she should pay - end of story. If the phone payment was actually made as agreed - then she shouldn't. Why does everyone always look for a free lunch??

I agree with Raymond, if they took two payments your sister would be demanding the second payment back.

She definitely owes the missing payment.

The only thing in question here is the extra interest and fees. IF the finance company really did drop the ball and didn't TRY to collect the money for six weeks I would argue that she does not owe the extra interest and fees as she would have made the payment good months ago had they notified her.

I suggest that she contact the finance company and offer the missing payment and request credit for the fees. Most likely they will accept the offer.

Yes, there is an ethical obligation to pay as agreed... but lending institutions rely on courts to enforce their written agreements, without admitting oral evidence to contradict the plain terms that appear in writing.

1) Her statement shows the 6th payment was made.
2) A payoff was requested, quoted, and tendered.
3) The loan docs were stamped paid.

The original lender missed 3 opportunities to get it right, and documented their position.

Trust me, if the shoe were on the other foot, the lender would be jumping up and down demanding that contract terms and all written documentation be enforced, and would be livid if a court permitted oral evidence to contradict.

She should pay the money owed, but should condition the payment on the lender acknowldging, in writing, that the error was their's, agreeing to wave the interest and fees added, and agreeing to report the loan paid as agreed to all CRAs.

She has contacted them several times and they are supposedly investigating. However, previous request to remove these fees have been denied. They will not admit fault on their part. I feel that you all have confirmed what I "suggested" she do. I suggest she write a letter, send it certified receipt requested, and possibly pay what she believes she owes-payment plus late charge. My sister is not looking for a free lunch. REMEMBER: IT WAS THE LOAN OFFICER AT THE NEW BANK THAT ADVISED HER NOT TO PAY. That is why I asked this question. I would really appreciate you not jumping to conclusion and making snide comments. If that was the case, my sister would have never even bothered to call them to try to work things out.

Thank you Raymond. She definitely has the evidence of contradiction of payment received - not received. I guess that is (or was) the question. LOL