California State Government Consumer Fraud

You gotta love the government.  In September, the State of California sent me a check for $81 as a tax refund.  I did not file for the refund -- they sent the check out of the blue.  Since no one human being is smart enough to keep up with all the taxes and user fee formulas in California, I just accepted it, cashed the check and forgot about it.  This refund was for my unemployment taxes, and I just assumed my rate had changed slightly leading to a refund. 

Then, in December, the State of California sent me a notice that the $81 was in error, and I needed to send it back.

OK so far, I guess, though they seem a little Keystone Cops with this.  But here is the good part- they claim I owe interest and penalties for holding their $81 since September, despite the fact they sent me the check out of the blue and it was their error.  LOL.  If this was a lot of money and not just $15 in interest and penalties (equaling a 97% implied APR) I would freak out, but at this level its just kind of funny.  I mean, if I as a company was running this scam with consumers, sending them refund checks and then asking for the money back 3 months later with interest and penalties,I would be going to jail, would I not?


  1. jotsheet:

    Government tax scam

    Coyote Blog's nice, little tax scam from the State of California.

  2. Hammer of Truth:

    Beware the State of California Tax Scam

    Coyote Blog posts word of a novel scam the State of California is running these days: sending refund checks, then demanding the money back with usurious penalties and interest charges months later (he estimated at 97% APR). He got a $81 ...

  3. Agammamon:

    It would be interesting to know how often that sort of error occurs - Collocting a few dollars extra from all of the small bussiness owners in C would add up to a fairly significant amount. Especially when the state government is charging interest higher than the payday loan places the AG has been complaining about.

  4. BobH:

    I can understand the interest, I guess, but what are you being penalized for?

  5. bower:

    Just say No. The small amount of the penalty is beside the point. What if it were a substantial amount? You'd have to hire an attorney and suffer in other ways too, including time away from your business.

  6. Homeland Security or Homeland Stupidity:

    Bits of homeland stupidity

    Do you think the government is looking out for your best interests? Dont bet on it. This weeks stupidity shows that government continues to persecute and endanger innocent Americans while ignoring wrongdoing in its own ranks.


  7. Nonsense Nation:

    If a business sends you a check in error, it is yours to keep. I am sure the government has exempted themselves from this law.

  8. !ndigo:

    Many of the things our government does would send a private citizen (or company) to jail if they did the same thing. I probably could have worded that better, but you get the gist.

  9. jotsheet:

    Government tax scam

    Coyote Blog's nice, little tax scam from the State of California.