Help: Law & Recalled BAC payments

lilgreenfairy

Hi, I really need some help on this one.

I was due to receive my last paycheque from my previous employer on the 31st January. There was a mistake in the payroll department which lead to me being overpaid by 1 week. They realised this and recalled the payment, according to them on the 29th, according to my bank on the 30th. Either way, the money should never have reached my account. However, it did.

I was unaware of any of this and went to the bank on the 31st to find my balance at £806, with £250 available to withdraw. Later that day, the money had disappeared from my account without my knowledge or authorisation.

Contractually, my employers are obliged to request the outstanding balance back from me personally in the event of an overpayment reaching my account, not just yank it out of my account. They believed that they had dealt with the overpayment in time to prevent it being transfered to my account. The fact is it was transfered to my account as cleared funds and then removed without my knowledge or permission. The bank are saying my employer is at fault, my former employer is saying that it's the bank's fault. I've taken a lot of advice on this and apparently it is illegal but I was just wondering if any of you guys had any advice on the legality of this/angle I should approach from.

Sorry if I'v posted in the wrong place

jonesMUFCforever

I do not believe it to be illegal as long as the 'withdrawal' was made on the day it was paid in or not later than 12 midday the next day.
They are allowed to recall payments without your authority if it can be shown to be done as a result of an error.
When were you aware of the error? Before or after it went in/out of your account?
If you checked your balance and it showed available balance which you withdrew and this caused you to go overdrawn and charges applied I would be asking for them to reimburse you for this.
I take it that the right amount of wages did not go in on the same day as the original amount. (If not how have they paid you since)

Sorry to ask all these questions but I really don't think you will get far going down the legal route.
Pop back with some answers please to get fuller advice.

MarkyMarkD

There's nothing wrong in them recalling the incorrect payment, but only if they made the correct payment to put you in funds on the same date. I doubt they could do this, so most employers would ask you to repay the money at your convenience or (more likely) deduct it from your next salary payment.

Assuming that you only spent money which could reasonably have been assumed to be yours, they shouldn't have recalled the money leaving you overdrawn and they should bear any bank charges for doing so.

Astaroth

lilgreenfairy wrote:

I was unaware of any of this and went to the bank on the 31st to find my balance at £806, with £250 available to withdraw. Later that day, the money had disappeared from my account without my knowledge or authorisation.

If you can only withdraw £250 from your bank then it isnt cleared funds (unless by "bank" you mean ATM and this is your daily limit) plus some banks will allow you to draw off funds before they clear anyway.

It certainly is possible to recover monies that are still going through the clearing process. Unfortunately it is not possible to do a partial recovery - you have to cancel the whole thing or let it go through.

lilgreenfairy

By bank I did mean ATM, that is my daily limit. I was only aware of the error after it had gone in/out of my account and I didn't spend any of the money. Ironically I was trying to pay for some stuff where I had worked when I found that the money had gone, much to my embarassment.

I was reimbursed the money I was owed yesterday but my point is, I signed a contract saying that in the event of an overpayment being made into my account they would request the money back from me personally. Plus they took 45p more than they paid in, leaving me 45p overdrawn which I will go mad about if I am charged for (I know it's 45p but it's the principle)

The most aggravating thing is that less than half of the money they gave me was salary, the rest of it was a tax refund of £469. They left me flat broke for 7 days after they were supposed to pay me and left me unable to meet several commitments that I had. It's really annoyed me

jonesMUFCforever

If you do get charged for getting 45p o/d then you should claim back from your ex employer.
However if you had withdrawn all the funds from your acount and then tried to 'pay for things' well sorry you've lost me.........

MarkyMarkD

The OP meant that the account was empty before the aborted salary credit was credited.

I don't understand how, when they reversed the BACS payment, they took more than they credited - they don't have the right to do that and I can't see how they would do it from a systems point of view.

If they told their bank to cancel the BACS run, they'd simply do that - reversing each entry exactly leaving your account with exactly nothing in it.

lilgreenfairy

ejones999 wrote:

However if you had withdrawn all the funds from your acount and then tried to 'pay for things' well sorry you've lost me.........

I didn't withdraw the funds from my account, they did.

I was only aware of the error after it had gone in/out of my account and I didn't spend any of the money

As far as I was concerned I had £806, not -45p.

So there's basically nothing wrong with what they did? There was me thinking that once money was in my personal bank account it was mine, and if people wanted it they'd have to ask. Won't be making that mistake again.

olly300

Check again that your ex-employer took out an extra 45p and if they did then tackle either your bank or your ex-employer. I would personally go for the bank as this is the easiest. However this time do it in writing and use recorded delivery as banks have a habit of fobbing of people.

It's a common misconception but money paid into your bank account by BACS, direct debit, standing order or a cheque is not yours until it is fully cleared even though it shows up in your account. In the case of cheques the money can be reclaimed months later, in the case of standing orders the money can be reclaimed by the bank, and BACS/Direct Debit they have a refund guarantee for wrongly paid amounts. However with BACS and Direct Debits the owner of the funds cannot claim more money than they paid in. So your bank shouldn't have allowed them to take the extra 45p.

If you are charged for being over drawn then demand the bank charges are cancelled and your 45p is reimbursed. Ask for the matter to be resolved in 14 days or you will take it further. Then be prepared to go through the bank's complaints procedure (in writing) and to the financial ombudsman.

You can tackle your ex-employer to reclaim money for the bank charges but as they have paid your wages they have affectively rectified the situation you so you can't claim for anything else. Also you would have to threaten them with an employment tribunal to ensure they would pay you back and this is more hassle than going for the bank as it would damage relationships and there are strict time limits and procedures you would have to follow.