Personal Finance

Overpaid salary affects credit history??

  • Last Updated:
  • Oct 11th, 2020 7:45 am
[OP]
Member
Oct 18, 2012
221 posts
26 upvotes
GTA

Overpaid salary affects credit history??

Hello ,

My previous employer ( large enterprise) overpaid me in December of last year and couple of weeks ago, they sent me a letter asking to pay that money back. I advised them that I’m going through some hardships during this covid time and can’t pay back right now.

They sent me to collections and I got a letter from the collection company asking to pay back or it will affect my credit history. I wanna know how it affects credit because it’s not a loan or credit that I took from my employer.

Any idea ??
8 replies
Sr. Member
User avatar
Nov 23, 2014
538 posts
471 upvotes
Toronto, ON
Have you agreed in writing or signed any papers that you will be refunding the extra payment ?
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
windywalks wrote: Hello ,

My previous employer ( large enterprise) overpaid me in December of last year and couple of weeks ago, they sent me a letter asking to pay that money back. I advised them that I’m going through some hardships during this covid time and can’t pay back right now.

They sent me to collections and I got a letter from the collection company asking to pay back or it will affect my credit history. I wanna know how it affects credit because it’s not a loan or credit that I took from my employer.

Any idea ??
A collections tradeline does not necessarily always need to be or have been a credit product. Dead beat fathers showing up from FRO(Family Resp Office Ontario) are common collections tradelines we see all the time.
Collections from 407 tolls, or collections from any business that your have a legitimate debt with.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Sr. Member
User avatar
May 18, 2019
933 posts
510 upvotes
If the collection company sends your account to the credit bureaus it will drastically affect your credit score because collection accounts are considered derogatory accounts and will remain on your credit reports for 6 years. All I can say is that your previous employer is not very nice to say the least.
Deal Fanatic
User avatar
Jan 31, 2006
8003 posts
2339 upvotes
Toronto
windywalks wrote: Hello ,

My previous employer ( large enterprise) overpaid me in December of last year and couple of weeks ago, they sent me a letter asking to pay that money back. I advised them that I’m going through some hardships during this covid time and can’t pay back right now.

They sent me to collections and I got a letter from the collection company asking to pay back or it will affect my credit history. I wanna know how it affects credit because it’s not a loan or credit that I took from my employer.

Any idea ??
I wonder why you did not set the money aside, when you know your employer overpaid you? Another thing is did you pay tax on the overpaid salary?
Deal Fanatic
Apr 16, 2007
8132 posts
3470 upvotes
Financial District B…
NobleFalcon1 wrote: All I can say is that your previous employer is not very nice to say the least.
Probably didnt leave on good terms for an employer to have to contract out a collections procedure.
If it has not been reported yet the OP should settle things now before it gets reported.
----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Deal Addict
Nov 6, 2015
1102 posts
682 upvotes
Guelph, ON
windywalks wrote: I wanna know how it affects credit because it’s not a loan or credit that I took from my employer.
It is actually a credit you took from your employer. If you didn't want to have a credit with them you should have paid it back in December.
Newbie
Feb 15, 2017
3 posts
1 upvote
A large enterprise employer that is likely well known? I'd recommend publicly shaming them. (see: https://www.cbc.ca/news/business/loblaw ... -1.3120116)

It's their mistake made and their reaction seems very heavy-handed. There's not enough info re: timeline of when you stopped being an employee relative to when the overpayment occurred; and I don't know how protections for employees vs former employees differs, but it seems most Cdn jurisdictions won't let an ER be too heavy-handed in collecting overpayments from existing employees. Not sure what the law says about former EEs.

I've done payroll for micro sized orgs and had staff that did payroll for me in larger orgs; one common thing is payroll mistakes happen. Like I said, I don't know the timeline of things (when you left employment relative to when the payment was made), but I've found payroll mistakes when reviewing things months after the fact, and it has never occurred to me to go from letter to collections in the blink of an eye. No idea what the amount in question is, but the overpayment can easily be an honest mistake by OP that wasn't questioned when received.

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