BEND, Ore. -

Tyler Smith has a job, recently graduated school, and was recently receiving unemployment benefits from the State of Oregon -- all was well, until he got a phone call saying they made a mistake, and he owes them a sizable chunk of money.

Smith was participating in the Trade Act, an Oregon Employment Department program typically used by people whose  jobs are moved overseas.

"I was enrolled through a program that let me go through school," Smith said Monday. "I never missed a day of school. I had a 4.0 GPA, and when I was done with school I had a job in under a week."

Smith says he did everything right. He qualified for unemployment, and at the end of the year in December, he applied for an extension. He says he was approved and his benefits continued.

"The agreement I had with them was that I would go to school every day, I would pass my classes and I would get a job," Smith said. "I (upheld) every part of that."

So he said he was shocked when he got a call from the unemployment office, saying they had overpaid him around $5,000.
 
"They made a mistake on the first of January, and they're wanting five months of unemployment returned to them," Smith said.

He's not the only one. About 3.5 million people received payments in 2013. State officials said that mistakes like the one with Smith happen sometimes.

"Unfortunately, with that kind of volume, there can be a mistake that is made," Employment Department spokesman Craig Spivey.

But the state representative said that's just the way it is.

"It's still money that person was not entitled to," Spivey said. "So it needs to be repaid by law."

What happened in this situation was Smith applied for an extension. At that point, a checkbox was ticked that shouldn't have, or needed following up on. It eventually was, but it was too late for Smith. Now, $5,000 in the hole, someone has to be accountable.

The Oregon Employment Department answers to the U.S. Department of Labor and the state Legislature.

"So when an improper payment occurs, no matter whose fault it was, we are required by law to recover those funds," Spivey said.

The fault, in this case, does not lie with Smith. NewsChannel 21 confirmed that this mistake was made by the state agency.

"Any time one of these situations occurs, it's unfortunate," Spivey said.

That's one sentiment Smith agrees with.

"Well, it's unfortunate for them -- that it's their mistake," Smith said.