I have small collections agency here in California. Recently, we collected 5K from a suspended corporation, which is obviously still transacting business. We took the payment by phone and now they're claiming foul play; citing that they only authorized a payment $500. Unfortunately, I discovered it was a processing error on our part. They still owe my client 12k and if I don't refund the money what legal recourse might they have?
2 Answers from Attorneys
Good news. Bad news.
For the suspended corporation to bring a legal action against your agency, it will need to be revived.Generally, that means filing missing tax returns and paying taxes. So, if the corporation is unable to revive itself, it would be unlikely that it would bring a lawsuit against your agency.
On the other hand, collection agencies are regulated by abundant government legislation. If, indeed, the debtor authorized a $500 payment and your agency collected $5000, the agency may be subject to penalties from governmental agencies, even if the debtor cannot bring a lawsuit.
I agree with Mr. Saltazman's response.
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