Legal Question in Credit and Debt Law in California

Financial Institution Cashes Checks and Does Not Post Correctly

Can a financial institution cash my checks which are intended for addt'l principle payments and post them to future billings - then charge the full interest for the future months. My contract allows me to pre-pay my loan with no prepayment penalties. I have written several letters requesting correction, I only receive a "telephone" response saying "sorry, that is how our billing is set up". What will happen if I stop paying and where can I go for further assistance?


Asked on 8/20/00, 6:15 pm

1 Answer from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: Financial Institution Cashes Checks and Does Not Post Correctly

The only way to answer your question is to very carefully review the agreement with the financial institution because it will probably specify how payments are to be applied. If they are applying payments in a manner different than the contract specifies in it is to your disadvantage, and then they are in breach of the contract.

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Answered on 11/29/00, 4:44 am


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