Debt claim due to overpayment: how to dispute?

[janeatkins]

Hello,

 

I hope I have chose the correct Forum area. My former UK employer claims I owe them money due to overpayments occurred in 2010 and have passed the debt to an international debt collection agency. I have since moved to another country and have corresponded with the collection agency via email. I have so far not received any prove that I am liable for repaying back the alleged overpayments. I have disputed their claim but none of the points I have risen have been addressed. I have now received a "final demand before transfer to our collection partner in your country" with a 7 day deadline. Still no evidence has been provided that my dispute is non is non valid.

 

My questions is: what can I do that is legally valid to force them to address my dispute?

 

Scouring the Forums, I have come across the FCA consumer credit sourcebook, with some paragraphs (as I report below) that might apply to my situation, but I am not sure the FCA consumer credit applies to employment related issues such as this one? If not, where would I find a legal equivalent of this related to employment disputes?

 

 

Please advise.

 

Many thanks, I will be very grateful for any help

 

Jane

 

"A firm must not ignore or disregard a customer's claim that a debt has been settled or is disputed and must not continue to make demands for payment without providing clear justification and/or evidence as to why the customer's claim is not valid." 7.5.3

 

"A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds." 7.14.1

 

"Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner." 7.14.3

[honeybee13]

Hello and welcome to CAG.

 

I'm checking with the rest of the team about which is the best forum for your query, so you may find your thread is moved later on.

 

My best, HB

[steampowered]

The FCA sourcebooks are unlikely to apply as presumably your employer is not a licensed financial services entity, and you wouldn't be treated as a customer even if it is.

 

I would simply reply by letter or email stating that no explanation of the overpayment has been provided whatsoever.

 

The chances of them taking this further are pretty small.What country are you in, may I ask?

[janeatkins]

I am in Switzerland now. I have back to them in simple "non legal" form, reconstructing the timeline of events and disputing the claim that I am liable for repayment of the overpayment (which has occurred during a period of unpaid leave). I have pointed out that no (legal) evidence has been provided to support that claim, or that I have played a role in instigating overpayments, thus the payments should be considered legitimate. I have also asked for a contract that has been issued during my absence, which I have never seen. Their reply was: "Your dispute has not been upheld. We have emailed previously to advise you of this." However, no email has been sent to me to that effect and no further explanation provided whatsoever. I have then re-iterated the request for details. But yesterday I have received (at the address of my current employer in Switzerland) the "final demand before transfer to our collection partner in your country" with threats of "additional collection costs and, as soon as Court Action is initiated, legal costs and interests will also be added to the debt".

 

What I am looking for, is a legally correct way to make my dispute something that has to be looked at before any threats of collection are pushed forward. If the dispute would be proven not valid (in case it is not) is it unreasonable to have reasonable legal arguments before agreeing to the repayment? Can my former employer enforce repayments without proving somehow legally my liability?

 

Jane

[steampowered]

You can refer to https://www.justice.gov.uk/courts/procedure-rules/civil/rules/pd_pre-action_conduct#A. You can explain that following the pre-action protocol is a binding requirement in relation to court action and ask them to comply with points - (3) a clear summary of the facts on which the claim is based and (5) if financial loss is claimed, an explanation of how the amount has been calculated - which they are required to comply with in any letter before claim. You can mention that failure to provide a proper explanation is a clear breach of the Civil Procedure Rules 1998 and would be deemed unreasonable conduct by the court, and that you intend to claim your legal costs on that basis if court action is issued.

 

In reality the pre-action protocol is very difficult to enforce and not that relevant if you are in Switzerland but perhaps worth a go?

 

In reality you can't force the employer to do anything. The mechanism in place for resolving disputes is court. If they want to proceed they will have to issue a claim against you, but that sounds very unlikely given that you are in Switzerland.

[billathome65]

LOL I love that sentence your dispute has not been upheld. Who decided the merits of your disputes? Oh yes that's right, the ones who say you owe them money.

 

I'd be inclined to email them back and ask for proof of a valid claim as they have not yet shown liability I would also advise them that should they persist in harassing you, you will report them for demanding money with menaces :)

 

For a bit of fun why not include an itemized bill that you want them to pay for time spent reading their email from the work put in typing a response and wear and tear on your joints through typing and sending them your reply.

 

If they have not shown full proof of claim tell them to take a jump.

[janeatkins]

Hello again, many thanks for the advice.

 

The link to the pre-action conduct has provided some insights into the shortcomings of the notification of the claim, both from the original claimer and from the collection agency. I have replied clearly with a for 4 bullet points question going to the point of their shortcomings in addressing my dispute and asking for precise statements.

 

I also don't expect that the pre-action conduct has a strict legal relevance at this stage. Since they have put their claim forward some years about the alleged issue and after I had left the country, there could not be a UK court order in absence to be obtained by them. Correct me if I understand this wrong. Either way, it shows that simple gorilla tactics aren't enough and a legal proof has to be provided. Then a Swiss court would have to be brought in if the claim is not settled in a satisfactory way. I am seeking legal advice here as well, but I will have to understand to what extent UK and/or Swiss courts are competent in the issue. Any advice here?

 

While this is ongoing, I would be keen to put forward a complaint to the relevant regulating authority in the UK. Unless I am advised this is a bad idea, where should this be addressed to? I might probably delay this until some significant developments are evident at this stage. I did already advise them in the past to stop the treats and to engage in a constructive exchange to establish liabilities in the case. All ignored from their side so far.

[Ganymede]

It's highly unlikely that this will go any further whilst you are living abroad. How much roughly are we talking about?

 

As for the merits of the claim itself, you knew that you were on unpaid leave and took the money incorrectly sent to you from your former employer. Had you still been in the UK I wouldn't have fancied your chances fighting this claim in Court.

[steampowered]

I also don't expect that the pre-action conduct has a strict legal relevance at this stage. Since they have put their claim forward some years about the alleged issue and after I had left the country, there could not be a UK court order in absence to be obtained by them. Correct me if I understand this wrong.

Your employment contract would usually contain a clause saying that any disputes will be submitted to the English courts. If it has this clause they are entitled to issue a claim against you through the English courts, and would get a CCJ if you didn't defend it.

 

They would have to go through the Swiss courts to enforce the CCJ though given that you are living in Switzerland, which is another story, and the cost of doing that would usually be prohibitive for small-ish claims.

 

While this is ongoing, I would be keen to put forward a complaint to the relevant regulating authority in the UK. Unless I am advised this is a bad idea, where should this be addressed to?

I doubt any authority will be particularly interested in your complaint. The regulatory authority for dealing with disputes is the courts, but no one has issued a court claim.

[janeatkins]

Your employment contract would usually contain a clause saying that any disputes will be submitted to the English courts. If it has this clause they are entitled to issue a claim against you through the English courts, and would get a CCJ if you didn't defend it.

 

The issue with the contract in question, is the following:

Following an e-mail agreement between me and the group leader (also grant holder) at the institute I had worked, a contract without pay was requested by him to HR. This was Oct 2011 and I was already living and working in Switzerland since 15 months (being on unpaid leave from the UK employer. My current contract with them was about to expire). I have never seen this contract. I ham not even sure it was issued to start with. I was only notified of the (over)payments in March 2012, which is when I actually became aware of them. I have requested now several times to see a copy of this contract. So far unsuccessfully. I find it a bit not fair (to put it mildly) that someone has the right to possibly obtain a court claim against me over an issue regulated by a contract that is kept hidden from me. I suppose if I could see this contract than I could get a better idea about if and how to possibly defend against the claim if needed. I would just like to point out that I am seeking advice on here not to simply avoid paying up, but to understand to what extent the claim is valid legally and how to find out if it is.

 

They would have to go through the Swiss courts to enforce the CCJ though given that you are living in Switzerland, which is another story, and the cost of doing that would usually be prohibitive for small-ish claims.

 

The net amount in question is about £16500. Probably a reasonable amount to go through courts for, although I have no idea about court costs at all.

 

I doubt any authority will be particularly interested in your complaint. The regulatory authority for dealing with disputes is the courts, but no one has issued a court claim.

 

Point taken. I was only referring to the business of debt recovery agencies gorilla tactics. But now I understand it is the case they don't care about justifying their bullying requests (and probably even cannot) and probably do not even have an obligation to do so, since ultimately only the courts are the place where one can have their rights put forward.

 

Anyway, at least, after my last message to them (based to some advice I got on here for which I am grateful), they have just communicated to me that their have referred the matter back to their client who should look finally at all my correspondence on 24th Feb. I will then get a response.

[steampowered]

I find it a bit not fair (to put it mildly) that someone has the right to possibly obtain a court claim against me over an issue regulated by a contract that is kept hidden from me

Yes, thats true. They would struggle to rely on a jurisdiction clause if you have never seen the contract. The employer may have some other basis for trying to claim that the UK courts have jurisdiction but it would a bit get more complicated for them. In any event they would have to port the claim over to Switzerland at some point to be able to enforce it.

I am seeking advice on here not to simply avoid paying up, but to understand to what extent the claim is valid legally and how to find out if it is.

The basic legal position is that you are liable to repay overpayments. However, you will not have to pay back the money if there is an 'estoppel'. Estoppel would apply where you received the money in good faith without knowing it was an overpayment, have since spent the money, and having to pay it back now would be unfair as it would cause hardship.

The net amount in question is about £16500. Probably a reasonable amount to go through courts for, although I have no idea about court costs at all.

.

That is a huge amount of money to have been overpaid. I had assumed it was something much smaller. Surely you must have realised if you were overpaid that much?

[ericsbrother]

There are other aspects to make clear about with regard to the amount of the claim, tax, NI and pension contributions were presumably taken from the sum, do they expect you to reclaim these or are they going to adjust their statement of claim to reflect this?

When you ask for their evidence of the overpayment you should make it clear that they are responsible for any PAYE reclaims as they used the automated syatem to place you in the current position. They wont like it because that means more work for them but why should you pay tax on money you havent received.

The lack of paperwork so far does indicate that they arent ready to do battle yet.

[Ganymede]

There are other aspects to make clear about with regard to the amount of the claim, tax, NI and pension contributions were presumably taken from the sum, do they expect you to reclaim these or are they going to adjust their statement of claim to reflect this?

When you ask for their evidence of the overpayment you should make it clear that they are responsible for any PAYE reclaims as they used the automated syatem to place you in the current position. They wont like it because that means more work for them but why should you pay tax on money you havent received.

The lack of paperwork so far does indicate that they arent ready to do battle yet.

 

None of that is relevant to the OP. The OP was overpaid net of tax and NI so that is all the OP needs to give back to his employer.

[ericsbrother]

I agree the net amount is stated but it doesnt state what amount the claim is for. It may be that the employer expects the OP to make the necessary calculatuons.

I got overpaid for one month when my employer confused someone else with me after a promotion. They expected me to repay the gross amount and claim the tax and NI back on my tax return. Fat chance of that but it shows that there is lazy approach by some employers

[janeatkins]

I agree the net amount is stated but it doesnt state what amount the claim is for. It may be that the employer expects the OP to make the necessary calculatuons.

I got overpaid for one month when my employer confused someone else with me after a promotion. They expected me to repay the gross amount and claim the tax and NI back on my tax return. Fat chance of that but it shows that there is lazy approach by some employers

 

Finally, the other party has provided more details. I do now have the figure for the gross amount and all payslips. The net amount they claim back has tax and NI contributions subtracted. It is essentially the amount paid to my bank account. In that Tax year, my financial administrator at the time did submit a Tax Return, which took into account this income and the tax paid through the PAYE. Any additional income for that Tax Year would fall below the personal allowance, so essentially, all tax paid by me as a result of the Tax Return (about £ 1.500) would need to be claimed back by me I suppose (in a scenario in which I will have to re-pay). However, I don't see a way to emend a Tax Return older than two years. Is this the correct procedure?

 

I am still checking the few documents they have provided, but in a scenario in which I would have to repay, the above is very relevant.

[janeatkins]

There has been a long gap for me in getting back here, as I have awaited for communication from my former UK employer. I had requested a P45 showing the emended numbers (i.e. no pay for the tax year in question (actually, they had never sent me a P45 to start with), so that I could Amend my 2011-2012 Tax Return and make a claim for older payment relief on the schedule 1AB TMA 1970. They say they cannot send a copy of the P45. Two questions:

 

a) is it OK (legally) for an employer not to issue a P60/P45 at end of employment? It seems very odd to me.

b) is my former UK employer in the position to obtain a CCJ given I live in Switzerland since 08/2012? Or would they need to transfer their case to Switzerland and try to obtain an order here? (to refresh memory, the amount claimed by them as overpayment is of about £16500 net)

 

Thanks, Jane

[ericsbrother]

they have to issue P45/60 but not a duplicate so if they claim to have sent them then it will be difficult to say otherwise.

they could be sneaky and go after you at your old address but this will backfire if you find out and challenge it. There are methods of getting a claim heard in Switzerland