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Company using Customer Money

by dmshms, Window Shopper

  • Created: August 5, 2010, 11:02 am
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4 comments

Hey folks,

 

So my employer merged with another company in the Direct Mail industry where we work with the Post Office and handle postage and fun stuff like that.

 

In this industry, customers will normally leave large amounts of money in the hands of the Direct Mailer for future mailings.

 

Well, my employer found out his new partners have been and still are using the customers' postage money for payroll and to pay off bills.

 

Is this legal? And if not, could anyone give me a reference to a federal law stating so?

 

Thanks!

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JimD | Former Moderator | 8/6/2010 - 8:26 am

dmshms, That doesn't sound like something that is legal. I am not a lawyer, so I cannot cite a specific law. Whether or not it is legal, it doesn't sound ethical and in business, being ethical is very important. If you have concerns, I would speak with the other partners. Be honest. JimD

burtondds | Creator | 8/6/2010 - 9:00 pm

Like Jim said, if it is legal it certainly isn't ethical. Let the other partners know what is happening. Maybe this is just an innocent misunderstanding with who's money is for what.

jogjob | Window Shopper | 8/6/2010 - 11:12 pm

I'm certain this isn't legal. At best it's misuse of invested/held funds at worst it's theft or fraud. I'm certain that if this got out it'd cripple the business as noone would knowingly work with someone like that.

jthorf | Contributor | 8/9/2010 - 1:40 am

I am wondering if that is the case. That means that the company is bankrupt ? Since it can't even keep up with payroll the least. But on another angle on looking into this. If the company is not bankrupt or the company is indeed making money and can cover payroll, day to day operation, cover all customer postage money if they choose to cancel or demand a refund and of course make a profit. I think it is just a case of poor financial flow and bookkeeping. This two person (your employer and his partner) need to sit down and talk this things over before it grow out of proportion. Like the other partner don't have the slight idea of their financial status. But true this is very ethical at the least ... If they can't get a proper working operation I think your employer should consider talking to an attorney (of any legal thing need to be done) to save his name for one. As you know in business a person/customer trust is very hard earned and once broken may never be given another chance to redeem. Just a 2 cent worth of opinion