You can’t trust anyone or anything…
Except for my landscaper and my computer guru, this is my motto.
The front page article in last Sunday’s Press Democrat, System stymies mortgage fix simply reinforces my world view when it comes to banks and other financial institutions and their recent mortgage practices.
But for those who may not have mortgage woes, take no comfort. You, too, may soon be subjected to the whims of financial institutions and insurance companies in other aspects of your life.
Consider this story from somewhere in Northern California as it may apply to you or someone you know…
You are retired.
You’re collecting your pension….perhaps for many years.
Then, one day you get a letter from the institution paying your pension saying: “Oops! So sorry, we miscalculated and have been overpaying you. Please forward $42,814.42 within 10 days.”
Impossible, you think. Unfortunately, such tactics are becoming a common practice.
In a current local case, a 76 year old pensioner had been receiving a pension for 11 years until presented with an overnight letter on September 17, 2010, advising that she had been overpaid and she had 10 days to accept the repayment terms outlined in the letter. What really adds spice to the story is that the pensioner is an advanced Alzheimer’s patient in an assisted living facility. There are a lot of other very “interesting” facts associated with the story. I am holding them back until it matures further…also in the hope that the bank comes to its senses and I can drop it.
The Wall Street Journal recently published an excellent article detailing this new phenomenon of recalculating pensions and how some people are fighting back. I recommend it to you. In fact, if you are currently receiving a pension, it is essential that you read it. Click on ‘Overpaid’ Pensions Being Seized.
There are ways of resisting such claims for repayment. However, one needs to hire a lawyer familiar with ERISA (The Employee Retirement Income Security Act) and benefits law to negotiate and litigate. In many instances, the pensioner can rightly claim equitable estoppel if they can prove that it was reasonable for them to rely upon the original representation of their pension amount.
There are no guarantees, and frankly, I suspect many people will not realize that they need legal assistance, much less have the resources to hire a lawyer. Notwithstanding, I think that lawyers may stand in line to take this one on…