Business Question

Ok got little story first. In the town I live in (Zionsville) there is an oil company called taylor oil. They sell bulk fuels etc. We got an account there to fill our family vechiles at there place. (they give you a card adn an account and send a bill at the end of the month) We joined about 18months ago and have been getting gas for about $2.48 ever since.
yesterday we get a call from the owner saying that our account had been messed up. When the activated our cards somehow it was set to give us the same price and not fluxuate. So now they want us to pay the difference. This happened to us and about 40 other accounts.

Now I understand this is a "family business" and I wouldnt want to screw anybody, but then again why should we have to pay for their mistake. We havent heard how much they want us to pay but its going to be thousands.

Legally I doubt they can make us pay, and morally i would feel wrong not paying, but hopefully we can work out an agreement as to the price (maybe pay half or something). Because afterall its there fault.

Tom

So at the beginning of the contract you knew it would fluxuate, but it was not? If that's the case, then you should pay the difference. If it was supposed to stay the same rate, then it's their fault.

That's a tough decision, since the station operator doesn't have much margin on fuel. If they are a distributor they may have more leeway. Either way they do not have $1 or $1.50 margin to give away so they have been losing money. It's a hardship all around.

I agree with cj3 jeep. You knew you were not paying the full price every month when you got the bill.

They are entitled to the money. It is your conscious whether you pay it or not.

If they overcharged would you expect them to pay you back????

Gary

Sounds like they weren't counting all the legs and dividing properly between the chickens and the pigs? :>)

Allan

I think they can make you pay. A billing error is just that. If the billing error was in their favor, they would have to pay. It isn't a one way street.

Poor accounting on there part that is for sure Allan.

They would have been losing money like crazy on 40 accounts.

I think they need a new bean counter.

Gary

I don't know how the best way to approach this would be, but getting advice on your legal obligation would be prudent. It would be fair to both parties involved that their cost be at least covered ie; you pay the wholesale cost of the fuel you used based on the daily rate on the dates of each of your purchases. After all it was likely apparent to you that you were "getting a heck of a good price" which should have led to you questioning the billing.
I had a similar situation a few years back with the electric service to my fabrication shop. My costs had never been overly high and were getting somewhat less (figure that out). Finally one day the power company called and asked if I was still using power. I stated "well yes, about the same as I have for years". So she sent out a crew and found my meter had stopped running. A few weeks later they contacted me again to see what we could do primarily to cover the cost of power for 2 months that they had no reading for. So I suggested they average the previous 12 months usage and I would pay the 2 months based on what the per month average was. This worked out ok for both of us. Their fault? Yes it was their equipment that failed. Even if your not legally obligated in your state to pay or at least work out a compromise, It's just good business. The fuel company can put a nasty dent in the fender of your credit report. Even if you dispute it and win, it will cost you way more than trying to work a compromise. And someday you'll be glad you at least tried.
As I'm told, at the final judgement your advocate will need more positive material than negative material to work with.

Some questions: Is this operation a marketer and a retailer or just a retailer? As a marketer he should be getting his fuel prices every day from his supplier, even if they change or not and maybe more then once a day. Thats the first thing you watch being in the fuel business. You do not have to be very big in the fuel business and you will have a branded contract and a unbranded contract with same or different suppliers to compare prices. Tanker loads cost to much (today over $33,000.00) to have you head in the sand. Even if a retailer only, their marketer should of given them daily prices. You have two eyes, you keep one on the cost of fuel and the other on the gas pump price. How do you set street price? Easy, every morning go out and stand in the middle of the highway and look both ways at your competions price. As a family business don't know how they would of lasted as long as they did. If older people and can't sell their business you need to work out a deal with them. They had to sink a lot of their retirement money into it. If young people they need to get out of that business anyway if not watching the operation any better then that. You knew things were not right and you are not in the business.

Don't ya think that they are beyond that?

Betcha in 60 days, this company is gonna end up being a far-distant and dim memory. :>(

The letter is a cry for help; they want their customers to throw 'em a life preserver after their many "errors".

Allan

Did you sign a contract to buy bulk fuel at a set price? Did the supplier's agreement say he would supply fuel at a set price? Was there any agreement at all? I hate to say it but the 'handshake agreement' ended with Harry and Henry.
No doubt it's going to cost someone a lot of un-budgeted funds.
I'd brush up my barginning skills and try to work a deal for money or time. Perhaps a no interest time payment plan and let the company (or the bookkeeper) eat their share of their 'mistake.'

I believe (and I may be wrong) the legal term is "unjust enrichment" which means you got more than you were entitled to and you have to pay up. I do think you will have to pay the difference, but you should be able to work out a payment plan.

times are tough everywhere and for most everyone, but how much is your integrity worth?
Just a thought.... hope you come up with a good agreement.


Dave

Tom-B-IN You already know what the right thing to do is. Pay the difference you owe them. Anything less than that and you are stealing. Honest mistakes are made by everyone. We don't have to always place blame. Had they been over charging you, you would expect a "FULL" refund. Let your conscience be your guide. bob farrell

Tom;
Business really should be built on relationships, so the question is- how much is this relationship worth to you? And- if you found you were OVERCHARGED, would you want your money?
The right thing to do is see what kind of $$ he's talking- he should be able to document each price change and your purchases at each price point; if he can't, he's just jacking you around. If he can document it and it seems reasonable, you should be entitled to terms on the backpayment equal to the period of time in question- if the errors occurred over 3 months, he should give you a 3 month payment plan for the difference.
Always try to maintain these business relationships- you never know when the shoe will be on the other foot!

They haven't caught this for 18 months ?

You took advantage of this "too good to be true deal" for about that long ?


WHAT A MESS !!!!!! Glad I'm not involved.
Hope you can work it out.

Nice tie in... LOL

You had to know something was wrong, on the other hand 18 months is a long time for them to let it go.I'd go and talk to them and offer to split the difference.

Nancy, You're NOT wrong, "Unjust Enrichment" is precisely a legal doctrine that might be evoked in these type cases. I'm an Attorney here in Southern Indiana where these type cases could go before a Judge and in his/her discretionary powers a fair and equitable decision would most likely be achieved. These cases are usually "fact sensitive" and all sorts of things might be taken into account such as fault and timing and any written contract terms (could be a MAJOR determining factor), responsibilities of each party and expectations and other equitable considerations in arriving at a fair decision. The law is not clear cut and dried, it depends on the circumstances in these type situations.

If I were the victim I would try to negotiate a settlement which makes the business owner bear at least some portion of liabilty since it was, after all, HIS mistake and persons should be held accountable for their actions in my (as a Conservative) opinion at least........

John T Country Lawyer

Tom B...IN, Hey you knew the price of fuel has been going up almost weekly. It's the talk of the nation. Try to work out a payment plan. You do owe the difference. Yes, poor business practices on their part. (I'd be interviewing bookeepers)if I was Mr. Taylor.
I'm also proud to know that all who've answered so far are as good of people as I had figured ya'll were. Everybody have a nice weekend.
Don

We had a similar "problem" a few years ago with our office lease - we were moving to a larger spot and the old lease company discovered a mistake in the monthly amount due - we had underpaid for 3 years because of their error - we could have not paid but a friend in the commercial real estate business said "pay, your reputation is worth a lot more then the money involved" John Eberly

Best definition of "character" that I ever saw was "Its how you act when you know nobody's looking".

I would work out a plan to reimburse the balance of their wholesale price, over time. I would not put the reimbursement agreement in writing- and believe me, they'll do this however you want to do it. Reason is that if they end up in bankruptcy, it will be much more difficult for the bankruptcy trustee to enforce an oral agreement than a written one.

I had a similar situation with a rental water softener a few years ago. He billed me for rent every 3 months. After a while I noticed the bills weren"t coming, but I figured it wasn"t my job to keep his books. When he figured it out he called and wanted all the rent or sell me a new softener for a big price-made me wonder if it was a mistake or on purpose. I offered to split the difference on the back rent he said no I had to pay all of it I said no come get your softener he said ok half would be fine. Lee

I can't imagine how someone in his organization would have not caught that sooner unless this operation is so profitable that they always had the cash to cover the tankwagon. If I were the owner I would fire whoever was in charge of watching the money. Chances are in a small business it's a family member.

I like to think that I operate with integrity in my life. I try to go out of my way to help people in business because I feel it's the right thing to do. It's always tempting to walk out of a store when you know that the cashier missed an item or entered the wrong price. I just don't feel good doing it so I don't.

The guy has his hat in his hand after he made a mistake. Up to you how you want to deal with it but if you work with him and cover the guy you may make a friend for life. If not you walk away and keep looking over your shoulder.

Negotiate the best deal you can from them. Your reputation and honesty is worth more than the cost. I had a similar situation with an employee years ago ver uniform rental costs. I offered to settle for half the amount. He wouldn't do it. I took him to samll claims and got the whole thing--even went back another six months. Good luck,
Paul

Somewhat related in the ethics department; about 10 years ago, while running a project, I discovered a huge mistake on an excavation contractors payment requisition, more or less a mathmatical error in our favor for something like $28,000.00, I forget the circumstances but it was one of those errors that concealed itself, was not easily noticed. This was a $1.8 million dollar contract. The contractor did excellent work, always submitted RFI's ( request for information) to solve problems, hustled to make the schedule, did some extras to the contract, pleasure to work with them, figured he'd have caught this mistake, I waited until the end to make mention of it, I wanted to see if they were going to catch it, never happened. So when getting close to the completion of that contract, I showed him the mistake, it was due to them and it was corrected and paid in full.

Now, there was no question as what was right to do here, and it was appreciated. Later on, as this building was nearing completion, city of new york d.o.t. came by and rescinded my on the street material storage permit temporarily, for a marathon or parade, all lanes of the route had to be clear, and they can do this with no notice. So another contractor had 40 cu.yds. of sand left over after doing a finish level coat on the precast concrete plank floors, they were not too good in the estimating dept I assume. 40 cu. yds. had to go immediately, called the excavation contractor, before I got off the phone, a backhoe and a truck was already on the way from another site and they removed all of it, no charge and I told him to bill me. Anytime I needed a truck or a favor, even today, I could call this guy up, years later I needed a truck for 1 day to shift expensive crates of glass on a job site to the other side of the job, dump body was perfect for crane to set them into, truck showed up, was not looking for a freebie either, no problem, just needed a truck, but our money was no good. Getting that sand out was a huge relief, d.o.t. would have had a field day with us over it, I dunno, mistakes happen, sometimes in your favor, always good to do the right thing.

Seems to me that this is more a "moral" question than a "business" question. You know very well that the right thing to do is pay the full amount. This is the equivalent of a typographical error and if the error had not been in your favor you would expect it to be corrected. If you pay promptly and willing you should feel better about yourself, than you will if you try to rub their nose in it. I remember two brothers that put the screws to a local business more than fifty years ago. People remember.

There is no question, rather how fast you can repay. You will be rewarded for your honesty with self pride. Not a price tag on that.

Do you think the golden rule applies here? If you town is a small town what is your reputation worth? HTH Mark

I would tell him that you will front up 1/2 of what you supposedly own him, all in a cash lump sum--just like you say. And see if this is okay. If he hasnt noticed in 2 years or so then what the *ell is going on at his company. He may out of business due to poor management anyway. Now if you are friends with the guy and his family then I would try to be real nice and work out a better deal then I described.
What state are you in?

Didn't a little voice inside you say "Why am I getting gas this cheap-it is $4.00 everywhere else"? Every day on TV we hear how fast gas prices are going up-going to be tough pleading ignorance on this one. On a related note, my parents (age70) just finished adding on a large addition to their house to make it more handicapped accessable. The project came in under budget, they payed the bill and were very happy. Two weeks later the contractor came by to say there was an error in the bill, and handed my parents a check for $3,500 they had overpaid. When checking his books he realized he had double-billed my parents for some materials. He could easily have kept the money, but he is an honest man. How do you want to be viewed?