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PFD applicants, state, banks struggle to sort out overpayments

Posted: October 17, 2011 - 12:01am

The state folks who usually distribute Permanent Fund Dividends spent much of last week trying to recover 5,500 PFDs they paid in error.

The problem came when the Permanent Fund Dividend Division accidently paid some dividends when some or all of the $1,174 payments should have gone instead to creditors who had won court orders to garnish the dividends.

The recovery effort has involved getting banks to try to take the direct-deposit PFDs from bank accounts and stopping payments on 1,900 paper dividend checks that were sent, said Debbie Bitney, director of the Permanent Fund Dividend Division.

The division is part of the state’s Department of Revenue, and is separate from the Alaska Permanent Fund Corporation, the agency that manages the Alaska Permanent Fund and sends the earnings to the division for distribution.

Bitney said the division’s front-line staff, answering phones and at counters in Anchorage in Juneau are attempting to provide answers to the public as best they can.

“They’re doing their very best, it is a really difficult place to be right now, they just don’t have very much information to be able to share with the public and people are expecting answers,” she said.

Some of the problems come from the recovery effort, said Rochelle Harmon of Juneau.

She said she checked her balance online Friday and found both a negative balance — and an added fee for insufficient funds.

Bitney said the division didn’t expect banks to do that.

“I was under the impression that they wouldn’t overdraw people’s accounts, but I’m hearing that they are,” she said.

Harmon said her bank, First National Bank of Alaska, later in the day reversed that action and removed the insufficient funds penalty.

Harmon said she and her husband still have to figure out how to deal with the overpayment, but at least now the problem isn’t being made worse.

Bitney said the accidental payments came when a computer file that identified garnishments sought by process servers for court judgments wasn’t properly linked to the payment file.

It doesn’t include government billings, child support payments or other types of garnishments.

In some cases the debts are no longer owed, Bitney said, because the PFD applicant made other payment arrangements. That, and other individual circumstances, are complicating the process of solving the problem, she said.

“Every single one of these is on a case-by-case basis, I don’t expect any two of them to be identical,” she said.

The stop-payment process doesn’t allow partial stop-payments, she said, adding another complication.

Those payments that have been recovered, but where a partial dividend is still owned, won’t begin to be paid until Oct. 27, Bitney said.

“That will be the absolute earliest that we will be able to pay anybody, and it won’t be everybody,” she said.

The Dividend Division has published on its website a list of all the check numbers for which stop-payment orders have been issued, and will work to get answers to frequently asked questions posted to the site as well, Bitney said.

• Contact reporter Pat Forgey at 523-2250 or at patrick.forgey@juneauempire.com.

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