State Says Man Doesn’t Have To Repay $17K, Will Keep Billing Him For It Anyway

They say that some mistakes you make will haunt you the rest of your life (like that ZIMA logo tattoo on the small of my back). They should add that mistakes made by the state of New Jersey will also apparently cling to you like stink on a skunk. Just ask the man who has watched a $17,000 error by the Garden State bloom into a $21,000 problem that now involves South Carolina… and which will never, ever go away.

We first told you about the unlucky fellow in the spring of 2013, when he was being chased by the NJ Dept. of Labor for $17,000 in unemployment benefits it claimed he owed.

A quick recap: Back in 2007, the man lost his job in New Jersey and filed for unemployment. A few months later, he and his family relocated to South Carolina. He contacted the state to ask what should be done about his unemployment and was told to keep filing with New Jersey.

As you probably recall, jobs weren’t exactly easy to come by in 2008 so the man took what he could get, occasional part-time work at Lowe’s, sometimes only 10 hours a week. Again, he checked with the folks in NJ and they said to keep filing there to claim for the hours he wasn’t working every week.

This went on until 2010 when his benefits dried up. Only at that point did someone in NJ mention that he should have filed in South Carolina once he’d crossed a certain income threshold that would have taken him off the NJ unemployment logs and onto the ones in his new state.

Not long after being told this, the state of NJ was demanding he repay $17,000 in unemployment benefits to the state that had given him incorrect information for more than two years.

With some help from the Newark Star-Ledger’s Bamboozled column — penned by Consumerist’s Karin Price Mueller — the state finally admitted that the man had done everything he’d been told to do and it was an “agency error.” Thus, he would not have to repay the $17,000.

End of story, right? Not by a long shot.

In a new Bamboozled story, the man says he had a couple of months of peace before the crud-storm started up again.

Last summer, the state of South Carolina called him in, told him he needed to fill in some paperwork.

“They said New Jersey asked them to have me apply for benefits for the years in question, years later,” he tells Bamboozled. “I felt funny doing this but I didn’t want to rock the boat.”

The folks at the unemployment office didn’t really have an explanation for the paperwork, saying they were just doing what they’d been asked by New Jersey officials to do.

It took about nine months, but the ghost of New Jersey returned angrier than ever this past spring, when South Carolina dropped a $21,000 bill on this unlucky fellow.

The state also sent him a $200 check that he’s never cashed for fear of the unholy ghouls that would be unleashed.

Shortly after the $21,000 notice from South Carolina came yet another payment demand from NJ for the original $17,000.

South Carolina eventually explained to the man that the $21k bill was actually being sent on behalf of NJ, as South Carolina doesn’t bill consumers for overpayment of benefits; it garnishes their wages and benefits to recoup that money.

Then came yet another notice from NJ, this time demanding $15,931 in repayment.

When contacted by Bamboozled, a rep for the NJ Dept. of Labor basically said there is nothing that can be done about these bills, even though the state openly admits it screwed up and the man doesn’t owe the money.

“In such cases, an individual may continue to receive notices of the debt, which does not disappear,” explained the rep, presumably between performances in the Paramus Park Playhouse production of No Exit.

The rep says that the notices are probably the result of newer fraud detection initiatives intended to recoup lost money for states and the federal government. Since the debt isn’t being pursued but hasn’t been wiped off the books, some a-hole computer somewhere sees his $17,000 as low-hanging fruit to be collected.

And it will likely continue to be that way; not just with notices but with his tax returns. It’s possible — but not definite — that any future tax refund could be wiped out by an automated collection of this not-a-debt.

“I can’t understand for the life of me why they can’t turn off the spigot if they decided it’s an agency error,” said the man, who has a new job of rolling the same huge rock up the same huge hill every morning. “It’s an uneasy feeling but I’m going to look at this as a closed chapter.”

Bamboozled: $17,000 unemployment mix-up will haunt man forever, state says []

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.