can bank take money without permission?

tobymangel

On the 25th June to my surprise a cheque for £500 was put into my account I didn't know what it had been put in for.

As I wasn't sure what it was I left it in my account for 3 weeks untouched no contact was made by anyone to claim money so i assumed it was legit.
I read in Which magazine about a similar issue where someone had put money into wrong account via online banking and there advice was to contact bank who in turn would contact the account holder to ask them to pay money back if they refused they could take them to court to get it.
Now I suppose I should of contacted the bank at this point but i didn't as the money came in handy for something I was saving for and I have to admit I spent it, under the impression that if it was claimed I could afford to pay it back from my other account.

Now the problem is on Monday 6th I received a letter from bank dated the 2nd August saying that a cheque was paid into my account in error.
"We have today debited your account with £500.00 and credited the correct account.
We apologise for this mistake and any inconvenience this may of caused."

This is fair enough it wasn't my money to spend but this has taken me over my overdraft which incurs a fee (not sure how much).

I rang the bank to discuss this as I felt that some warning would of been appropriate so I could move money around to cover it.

The woman on the phone was most unhelpful and just kept repeating that I shouldn't of spent it.(fair enough I guess) she also informed me that going over my overdraft would mean a £5 charge per day as the letter was sent on a Friday it didn't receive it until Monday so has cost me £20 already without the charge.

So i'm asking are they allowed to take money from my account in this way without informing me for something that was their mistake in the first place (as they point out in the letter).

Or should I just accept it as punishment for dishonestly spending the money?

exel1966

Yes they can reverse an error. Seems like you got just what you deserved. I have no sympathy whatsoever.
Taking and Spending money knowingly wrongly credited to your account is theft. Holding the money in your account without advising them is not. You should have contacted the bank or ignored it until they contacted you or removed it.

EDIT : To answer your exact question of 'can bank take money without permission?

You have already given them permission, the day you opened the account when you signed on the dotted line.

System

tobymangel wrote: »

This is fair enough it wasn't my money to spend but this has taken me over my overdraft which incurs a fee (not sure how much).

So you used the money even though you weren't sure that it belonged to you and made no effort in the 3 weeks to resolve that question?

So i'm asking are they allowed to take money from my account in this way without informing me for something that was their mistake in the first place (as they point out in the letter).

Or should I just accept it as punishment for dishonestly spending the money?

Yes & yes

al25

In short, yes they can.
What I don't understand is why would someone use funds that they were not expecting, or quite simply not theirs?

tobymangel

Fair enough pretty much expected that response not going to try and make excuses for myself, just wondered if the bank was able to do it without my knowledge.

somethingcorporate

Yep, unfortunately as it was not yours they didn't really take it from you do they?

I know hindsight is 20:20 but leaving enough in there to cover it had they reversed it would have been the best thing to do, which in effect means not spending money that is not yours in the first place.

Had they not come back for 3 years you may have a case, but 3 weeks? No, just asking for trouble.

princessdon

Whilst I agree you needed to have paid it back and shouldn't have spent it I'd argue the O/D charges with them.

Money goes in and out of my account I wouldn't have known it was an error (I look at balance only on my phone) so it is feasible to go o/d as I wouldn't move money from my savings (I keep min daily balance in my current accounts as they don't pay interest).

So in your shoes I'd fight the o/d charges as your balance as far as you were aware covered it.

you may get lucky and they'll remove the charges and worth a shot IMO

Taadaa

This happened to me when I was about 15. Even at that age I had the morals to tell them it wasn't my money. And a second time, when it happened again.

I did get to keep the interest though.

Take_it_like_a_man,_sonny

So they have put OP back in the position they were to start off with! And the terms of bank accounts is that the account holder will notify the bank of any errors or mistakes. As OP did not, then the bank, on reconcilation, have duly corrected their mistake.

InsideInsurance

If it was a case of not noticing it, spending it, having it taken away and then OD fees being applied then maybe there would be a case for arguing the fees to be removed.

On the basis you saw it, knew it wasnt yours but spent it anyway you clearly dont have a moral leg to stand on to argue about the fees.

eschaton

Basically it was theft. You got what you deserved.