Bank Made Erroneous Payment Towards Loan. Backdated A Reversal More Than A Year Later And Reported Me Delinquent With No Notification.

Last October 2024 I traded in our toy hauler for a different unit at a dealer out of state. (I live in MI) I had a loan for the unit I traded in through M&T Bank. The dealer agreed to pay my loan in full on trade and I applied for a new loan also through M&T Bank for the new toy hauler. A week or two after the purchase I logged into the banks online portal to make my first payment and to my surprise discovered a balance which was a fraction of the amount financed. I called the bank who confirmed that my original loan had been closed out and paid in full but that another payment had been made towards my new loan. They insisted the error was not on their end. So I called the dealer and reported my findings. The dealer also insisted they saw no issue on their end. At this point I assumed the mistake was made by the dealer so I continued making regular payments and called the dealer 3 or 4 more times and was left with a response “we will look into it and let you know”. For every loan I have or have had I make automatic payments if available by the institution. In this instance I wasn’t sure what to do so I made regular payments for several months, but since my statements said no payments due until 2033 and since I didn’t want to pay off the loan because I knew it would be a bigger mess to unravel I paused making payments while waiting for them to perform an investigation. At some point I made a payment to get the balance down to a whole number and figured I would reach out again this upcoming spring and attempt one more time to correct the issue and inform them of my intention to pay off the loan.

Last week, just over a year after the purchase I received a phone call from M&T Bank collections that I was past due on my loan. I logged into the portal and discovered they reversed and backdated the erroneous payment and also backdated reversals and reapplied all of the legitimate payments I made. I made a payment over the phone to get “current” according to what they had done. Inquired if they would be reversing fees and interest which I saw they had applied, and if my credit would affected due to their mistake. (Turns out it was the banks mistake). I was assured I would not and that their adjustments would be reflected online in the next day or two. Since then, I have not had any corrections to fees or interest applied. They reported negative remarks and delinquency to the credit bureaus and tanked my credit. I filed a dispute with the credit bureaus and the bank declined any false reporting. Previous to this I have never missed a payment in my life. My credit score has dropped more than 100 points and the bank has closed all of the tickets I filed with customer support as “won’t do”. I have tried contacting a handful of lawyers but have come up empty on any in my area which handle disputes like this. I’m annoyed by the fees and interest but devastated by the damage done to my credit. I expected a phone call from the dealership at some point to inform me of their mistake and to discuss next steps. I didn’t think it was the banks error and certainly didn’t expect them to backdate reversals and report me delinquent without notification. Please advise.

Location: MI