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October 23, 2006 7:10 AM   Subscribe

Bank errors in my favour?

On May 18th this year £1000.00 was deposited in my current account by BACs payment from a company IM Other, presumably by mistake (unless I have a secret benefactor). I didn't notice the extra payment for a week or so afterwards and when I did I just waited for it's inevitable withdrawal by the bank. The amount was never removed.

Today, exactly the same thing has happened, a £1000.00 deposit from the same company has been made to my account.

Obviously the right thing to do was to report the initial mistake and return the money. But I didn't and I'll thank you to save the moralising for another time.

Question is do I report the second mistake and end up returning both payments or wait and see if it's reclaimed this time?

Also is there a time limit on these things and are they likely to spot the error at the end of the financial year regardless? I assume they always find out? Or do they?
posted by brautigan to Work & Money (21 answers total) 1 user marked this as a favorite
They always find these things in the end. You will save yourself much hassle if you just tell them now.
posted by caddis at 7:15 AM on October 23, 2006

They will find out and your account will be debited £2000, whether you have spent it or not.
posted by EndsOfInvention at 7:19 AM on October 23, 2006

Since we're speaking in pounds, I'll assume you're in the UK. I live in the US, so I have no real knowledge about your banking laws etc.

I do know that in the past I've called my own bank to confirm the name of a retailer to go along with a debit from or deposit in my checking account. You could also contact your bank (perhaps without giving them your account information, as a 'perspective customer') and ask about their policies on this sort of thing.
posted by youngergirl44 at 7:20 AM on October 23, 2006

EndsOfInvention: Can they just take it out of your account? I thought they had to have permission. Though if they don't get permission they will be able to force the issue legally and brautigan will be both without the cash and on the bank's shit list.
posted by biffa at 7:34 AM on October 23, 2006

This has been discussed before on AMF in context of a mistaken salary deposit, but I don't have time to search it up. Short answer: report it or at very least ignore it, and absolutely don't spend it. At some point the error will be discovered (computers are very good at arithmetic, and never, ever get tired or forget) and your bank has every legal right to pursue you for the money.
posted by mojohand at 7:35 AM on October 23, 2006

Close the account and see what happens.
posted by JohnnyGunn at 7:42 AM on October 23, 2006

Contact your bank about this second payment, and ask them if it's legit (don't immediately say it's an error, just ask them to look into it).

Don't say anything about the first payment, and let them figure it out by themself, but don't spend the money either (make sure you can pay it back in full if you need to).

As usual, IANAL, so this is problably not 'legal' advice you should follow, but it's what I would do.
posted by jayden at 7:44 AM on October 23, 2006

You know, they don't always find the money. It's just that they don't talk about it much when that happens. However, it isn't your money, and ethically you should at the very least keep the funds untouched and in your account.

They can legally remove funds from your account without your permission, and if you have removed the funds there could be issues.
posted by tomble at 7:44 AM on October 23, 2006

This question seems to come up on the newsgroup periodically (so there must be a lot of these errors). When you spend a penny of that money, you will have committed theft (see R v Ngan, [1998] 1 Cr App Rep 331). In order to avoid doing it "accidentally" you should report the error immediately. By not reporting the error, you have legally established your dishonest intent.
posted by grouse at 7:45 AM on October 23, 2006

They will probably find it, and if they do, they'll take it out. If that causes you to go into overdraft, you'll be assessed penalties. Happened to a friend of mine.
posted by Dipsomaniac at 7:51 AM on October 23, 2006

If that causes you to go into overdraft, you'll be assessed penalties and possibly charged with theft.

In addition to the court case reported earlier, you might also see this news report.
posted by grouse at 8:01 AM on October 23, 2006

If it was paid to you under a mistake you not only have to return it, but you will have become a trustee for it - meaning that you owe them for any interest you earn on it. In reality, they would proibably be happy enough to get the original amount back.
posted by Joe in Australia at 8:10 AM on October 23, 2006

One barrister claims that you could, in fact, owe the interest you should have earned on it, which might be more than you actually did earn.
posted by grouse at 8:28 AM on October 23, 2006

once, an employer of mine miscalculated a raise i was due, and paid me too much. i immediately reported it, and was told that it was ok. for the next four months or so, it continued, and i reported it on two additional occasions. finally, after about the 6 month period, they realized their mistake, and started paying me the lower amount they were supposed to. the drop in my paycheck sucked.

but the company did not ask for their money back--because i had documented the overpayment immediately, and had made several efforts to get it corrected.

moral of the story: honesty, in this case, earned me some money. i'd report it asap.
posted by lester's sock puppet at 8:46 AM on October 23, 2006

They always find these things in the end.
No, they don't. Happened to me when I was a kid, and broke. Payments for about £250 a week started coming into my bank. I assumed it was one of my many relatives helping out (I was living away from home) so spent it. No relative would own up to it though, and there was no comeback.
posted by bonaldi at 8:51 AM on October 23, 2006

I've had mystery deposits show up in my checking account twice. Both times I called my bank and asked about them. They did research, couldn't figure out the original source, and I kept the money with the bank's knowledge. I'm in the US.
posted by The corpse in the library at 9:45 AM on October 23, 2006

I lost my job at a bank due to a $1000 error, the source of which was never determined. Please tell your bank about this. You could be saving someone's career.
posted by Rock Steady at 10:13 AM on October 23, 2006

Personally I would open a seperate account for your personal money/checks and leave the money untouched in the orginal account, don't spend it, for a number of years, wait and see.
Most liekly they will spot the money, I don't think there is a period after which they can not take the money back, and the bank does not have to ask your permission to withdraw
posted by edgeways at 12:56 PM on October 23, 2006

IAAL and I work in banking, specifically in this field. Tell the bank. Sooner or later, the person or company who should have received the money will query it with the sender.

Usually when this kind of thing happens, it's because of a couple of digits being transposed when inputting the account details, or someone reading a '3' for an '8'. Sometimes the 'wrong' number doesn't tally with anyone's account, so the first electronic payment bounces back, and the error is picked up at once.

But sometimes, as in this case, the wrong number is that of another customer's account, and they end up with money that was never intended for them. Most people tell the bank at once. Some do not, and think nobody will ever find out. They spend the money in the hope that the bank won't ask for it back. It will, believe me, it will.

The error will be traced back to you. And they will take all the money in one go, if you don't go to the bank now and ask if you can pay it back in two instalments, as you received it.
posted by essexjan at 12:59 PM on October 23, 2006

A friend of my, now sadly dead had the same happen to him, but to a larger extent. £30,000 turned up in his bank account one day. he immediately went and bought Premium Bonds[1] with it.

It took a few weeks before they found out and asked for it back. He didn't win but he thought the chance of a million pounds tax free worth it.

[1] A form of UK national savings, you don't get a return but you get entered for a draw and the winnings are tax free.
posted by hardcode at 7:12 AM on October 24, 2006

Why does this question keep coming up here?
posted by Alt F4 at 2:20 PM on October 25, 2006

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