Car loan company refuses to issue a refund for an overpayment?
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Car loan company refuses to issue a refund for an overpayment?
My girlfriend was in an accident which totalled her car. The other person’s
insurance company issued a check that paid all but $867. The dealership
issued a refund check of $1190 for unused maintenance packages. The finance company applied $867 of that to the unpaid portion of the loan and issued a check of $323 to my girlfriend. About a week later, the insurance company that held the GAP insurance on the car issued a refund check for $781 because it was not used. Now the finance company refuses to refund that money to my girlfriend that is her money. What can we do?
Asked on June 11, 2018 under Accident Law, Rhode Island
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
Your girlfriend can sue them: that is what she can do. When there is overpayment or someone is paid twice (or from two sources) for the same thing, they cannot keep the overpayment--the law is very clear on that. An error--like overpaying--does not let you keep money to which you are not otherwise entitled or to be double paid for something. Legally, they have to return the overpayment; if they won't, as stated, they can be sued. Whether it is worthwhile suing for $781 is a different story, however; unless the insurer is headquartered in the same county in which your girlfriend lives, she'd most likely have to sue in "regular" court, not small claims court (small claims is a court of "limited jurisdiction" and only has power over defendants within its county), and suing in regular court may be more trouble, time, effort, etc. than it is worth.
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