What's going on here?

[Anonymous]

Hello, I'm having a settlement issue I haven't been able to find much about. Basically I settled a (Barclay's) CC account in late August for $1500, with 3 payments of $500, on 9/15, 10/15 etc. I made the first payment on 9/15, then on 10/05 I called them and told them I wanted to settle the final amount. Before doing so I asked whether this would stop the payments on 10/15 and 11/15, I was told it would. The 1k payment went through fine, but they still charged $500 to my checking on Friday, effectively making the total payment 2k. When I called, I was told they were going to hold the money until their settlement department looked at it, in the first week of November. Even then it "may not be released". I can't imagine this is legal, but they refused to issue a refund. What can I do? Has anyone been in this situation before? Thanks.

[laz98]

i'd get a lawyer asap.

[armywifey85]

I'd dispute it with my bank asap.

[IOBA]

Do you have the settlement terms in writing?

1.  Put a block on the company with your bank.

2.  File a complaint with your bank the company took out more money ($500) than they were authorized to do. 

3.  Copy or write Barclay's about bank action.

Why is it taking until Nov for them to look at your settlement offer??  It normally takes a bank a day or two to review it and make a decision.  They often counter offer. 

[Anonymous]

I do, I've got a letter from them. The withdrawals are all on there, but they claim they can't issue a refund until this department looks at it. It sounds like I need to call my bank tomorrow and start the complaint process, and I've already spoken to the BBB.

If that doesn't work, I am in law school and can escalate it if I need to, although I'd rather not have it come to that. The biggest issue with recourse in the courts is that these CC contracts generally have binding arbitration clauses, which effectively means that you can't sue in the court system proper. The arbitration system is a mess and pretty skewed in the industry's favor, plus the costs are obscene compared to small claims. Hopefully it works out, thanks for the advice everyone. 

[Anonymous]

Your situation is not a black and white one.  If you are in law school, the doctrine you need to study is "OFFER of ACCORD & SATISFACTION"

What is the nature of your settlement agreement?  Did they merely send a letter of offer to settle?  Did you initiate the offer?  Was there any signatory documents with specific terms and agreement of "satisfaction?"

Only a true "offer of accord and satisfaction" truly negates the previous agreement and replace it with a new one for a different amount.  Simple settlements only work if both parties comply voluntarily and privately.  But in court, depending on a variety of circumstances, the simple settlement may not be fully enforceable (meaning may not replace the previous agreement).

However, regardless of the settlement, the CC company may not "debit" unauthorized amounts from your account even if you owe more than debited.  This is probably your strongest position.

However, if you previously authorized "3 payments of $500" which they did as scheduled, and you authorized a single payment "verbally" of $1000 without a documentation or written instructions rescinding the $500 payment schedule, you may have to do just as the CC said and wait for a review and decision on their part.   Seeking adjudication for the $500 may cost more than the amount in dispute, and you may not be able to recover your legal expenses.

It is for this very reason that it is never a good idea to authorize debits from your account.  Always issue checks for the amounts that you intend to pay.  Post dated checks are not legal, but limited endorsements are (endorsing the back of the check to indicate that it is "Not for Deposit prior to <DATE>" and indicating the payment number, to be credited to the account of and also indicating a new debt balance upon deposit.

Message Edited by txjohn on 10-20-2009 05:49 AM