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Barrister
Barrister, Attorney
Category: Legal
Satisfied Customers: 37007
Experience:  16 yrs practice, Civil, Criminal, Domestic, Realtor, Landlord 26 yrs
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My wife and I took out a dealer financed boat loan from First

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My wife and I took out a dealer financed boat loan from First Merit Bank of Akron Ohio in 2003. We found a buyer for our boat in March 2013 after paying for 10 years on a 20 year note. The bank provided the loan payoff amount and over several iterations the amount changed 3 times. When we finally reached the sale date we found the bank applied a 1% early payoff fee to our balance. This amounted to $890.00. We attempted to dispute the payoff balance but feared loosing the sale in this less than desireable economic market. In addition, we understood we were upside down in the boat and took a personal line of credit to payoff the difference in the balance and sale price. However, we didn't epect the additional $890.00 cost. Under advice from a friend we were told to write a letter to the bank explaining we didn't agree with the early term fee and would dispute it outside the sale--we didn't want to loose the sale opportunity. The bank told us to read our original contract and on the front in smaller print it did say that "Early payoff of this loan may or may not be subject to a prepayment penalty". On the back o the contract it does state this again with the additional information that the fee "could" be the greater of $50 or 1% of the loan balance--but again restating may or may not be assessed. There are no details into what triggers this fee--how or how decides may or may not. When I challenged the bank again they now tell me since the loan is closed there is nothing they can do. Do I have any recourse to get my money back and if so how to I get started.

Best Regards

Roy Jasper
Hello and thank you for using JA! My goal is to provide you with excellent service and help with your legal problem.
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To be very honest with you, if you were to sue the lender under a breach of contract claim, they could likely claim that since you voluntarily agreed to pay the early payoff fee, you would be legally "estopped" from now disputing it. This means that when someone takes a position and acts based on that position, they are prevented from later coming back and changing their position.
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So in order to be able to continue to dispute the fee you would have had to have paid it "under protest" and then convince a judge that you didn't waive any objection by paying it.
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With that said, you could try to file suit against the bank in a small claims action for breach of contract, but to be honest with you, I don't think you would win.
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Thanks.

Barrister

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Barrister and 3 other Legal Specialists are ready to help you
Customer: replied 4 years ago.

Unfortunately, this is pretty much what I thought would be the answer but needed professional confirmation. The bank even today won't answer my questions regarding what criteria triggers the early payment penalty and takes a more defensive posture that "I signed the contract" and they have done nother illegal.


Regards


Roy Jasper


 

Unfortunately, this is the position banks typically take once they have been paid. Since the contract could be intrepreted that it is their option to impose the penalty, it would be tough to beat them in court since you have already paid the fee.
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Thanks
Barrister

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