I currently have an outstanding primary residence loan taken on my 401K. Prior to leaving my employer, I called Prudential to ask if it was possible for me to continue payments on this loan if I were to leave the company as this was a big part of my decision-making process. Being that the loan is still $19K outstanding, the penalties for me going int default (early withdrawal 10% plus the addition of income) would outweigh the benefits of the new position I wanted to take, I needed to know if this was possible. The agent told me "yes." They would send me a coupon book upon leaving so I could continue to pay on the loan for the life of the loan. After this information, it was made clear to me that I could make my move without any loan penalties. I thanked her and actually indicated to her that she made that decision for me and thank you!
Fast forward to me in my new position with my new employee two three weeks later.
I get a call from Prudential that the last agent I spoke to was incorrect and that I would need to pay the loan off prior to years end if I wanted to avoid the penalties. I explained that I made my decision partly/mainly based on the information the previous agent had told me and that this should not be my burden now being that I was told something completely wrong.
They went back and reviewed the taped phone call and said that I was correct in that the agent made a mistake, but she assumed I was staying with the company, but going over seas and that the 401K plan had this provision set for such a situation. Wait....what???? I never even came close to giving that indication to the initial agent. Now....the new agent tells me that there is nothing they can do. I continued to state that this, in no way, was my fault and Prudential now needed to step up and allow me to make payments to the loan. They said there is nothing they can do and that I need now pay the penalties and the extra taxes.
I am at a loss. What are my options here? They can't just tell you wrong information, allow you to base your decision on that information, then go back and say "oops.....sorry", can they? Do I have any legal recourse?
Any help would be greatly appreciated.