The council said it would write letters of apology to all those affected
Derby City Council has apologised after it sent out council tax reminders to 3,000 people who had already settled their bill.
Michael Aubrey, from Derby, said he was angry when he received a letter three weeks after he had paid the tax at the Post Office.
The council said the error occurred as the authority changed over IT services.
A spokesperson said each customer affected would receive a letter of apology from the authority.
Mr Aubrey said his letter stated that if £130 was not paid within a week, he would lose his right to pay by instalments and have to pay £1,327 within seven days.
He said: "I rang all the numbers on the form and all you get through to is an automated payment line, where you can't talk to anybody and say I've already paid.
"I got a phone call from my mother-in-law over in Allestree, who was in tears and said she'd received this letter and didn't know what to do about it.
"She's 70 years old, she felt extremely threatened - what's she supposed to do?"
A council spokesperson said: "Due to the disruption caused while changing IT services over the recent bank holiday weekend, we were unable to access the latest customer payment information for payment made during the weekend.
"We wish to apologise for this error and want to assure people who have received the letter that this will in no way affect their payment record with the council."