Money mistakenly tranferred into my account??

Steve_xx

Uxb wrote: »

Ah but it is complicated by when you place a deposit with a bank the money is also no longer yours as you are in fact making a loan to the bank.

I take your point, but the money is still yours even though you have loaned it. Loaning something means just that, ie not relinquishing ownership?

brewerdave

Further complication would occur if the receiver has switched bank accounts!!

Chunks

Agree with Armorica. I believe that the general legal position is that someone who is given money by mistake should say what has happened and pay it back.

If the amount in question is paid to someone, the amount was not noticed, and that person changed their position in reliance of the erroneous payment, it might be judged unfair to force the person to return the money.

Pretty clear what will happen in this case, unless the amount paid initially was 50% of the actual amount due to you; if yes, welcome second installment .

colsten

Lippyx wrote: »

I checked my account last night, and noticed a large sum of money had been transferred to my account!!


A week ago I received a "good will gesture" from a bank who had not be following the rules, I got the FOS involved etc., and they sent me compensation.


So that was last week. This week, the same bank had transferred the same amount into my account again. I have contacted them, telling them of this mistake, and I am waiting for a response. I have also transferred it into another account, so I don't accidently spend it!


My question is, is there a time limit that the bank has to respond to me, before the money becomes rightfully mine, especially if I show I have attempted to make them aware of the mistake? Like if you find a watch in the street and hand it in to the police, if its not claimed within 3 months, it becomes yours.


Cheers.

You can rightfully consider all the money to be yours if you have got it in writing from the bank that you do not owe them any money at all. Until then, you'd be pretty foolish if you availed yourself of money that you know doesn't belong to you.

runforlife

The OP could go to his bank. Draw it as cash and then hand it in saying, "there ya go, here is your money 'cos it aint mine. Cheerio!"

That would be an interesting scenario. They could always put it into one of those holding accounts then.

Gentoo365

The legal position, the regulatory position and the practical position may differ.

This is what I think, initially...

Legally, until you take the money out it is just an error in the amount the bank owes you. It is not your money, your balance is just incorrect. The bank either owes someone else that money, or nobody.

Once you take the money out (knowing that it is not yours) then you hold it under a constructive trust. i.e. you are looking after that money for the actual owner. You have to keep that money safe (i.e. covered by FSCS) and should not benefit from it in anyway. The interest earned is also owned by the true beneficiary.

Your obligation is to make an attempt to notify the bank and hence request they assist you in locating the true owner.

The 6 year thing does not really apply, as if you use the funds then you are committing a breach of your duties under the constructive trust.

at this point by knowledge is limited so I am not sure what the implications of that are, however it means that the true beneficiary can sue you.

The issues that people are finding if they are on the other side is that the data protection rules make it difficult to obtain the details of the person to sue. However it seems to me that if you are accusing someone of theft/fraud/breach of trust/whatever then data protection rules may not apply (or rather there is an exemption under 'prevention or detection of crime') however this means the police have to get involved, and they may not be interested if it is not a criminal act, just a breach of duty.

Please read everything above as possibly incorrect. As although I know a bit about this sort of thing I have not checked it, and it could be wrong.

Gentoo365

colsten wrote: »

You can rightfully consider all the money to be yours if you have got it in writing from the bank that you do not owe them any money at all. Until then, you'd be pretty foolish if you availed yourself of money that you know doesn't belong to you.

I am not sure if this is true if a 'reasonable person' would realise that the bank have made a mistake.

In addition, if the transfer came from somewhere else, the bank can only confirm that the money was transferred to that account. They cannot trace the funds and inform the customer that those funds were not sent in error.

I absolutely agree with what you say in the second part. Personally I would have transferred to a savings account within the same bank, such that it is separated, but you have not changed the position of yourself or the bank. It remains an 'error'. A debt that does not exist (or is incorrectly assigned).

by taking the funds elsewhere you are holding them under trust (possibly, potentially) and of course this has implications.

Steve_xx

Gentoo365 wrote: »

The legal position, the regulatory position and the practical position may differ.

This is what I think, initially...

Legally, until you take the money out it is just an error in the amount the bank owes you. It is not your money, your balance is just incorrect. The bank either owes someone else that money, or nobody.

Once you take the money out (knowing that it is not yours) then you hold it under a constructive trust. i.e. you are looking after that money for the actual owner. You have to keep that money safe (i.e. covered by FSCS) and should not benefit from it in anyway. The interest earned is also owned by the true beneficiary.

Your obligation is to make an attempt to notify the bank and hence request they assist you in locating the true owner.

The 6 year thing does not really apply, as if you use the funds then you are committing a breach of your duties under the constructive trust.

at this point by knowledge is limited so I am not sure what the implications of that are, however it means that the true beneficiary can sue you.

The issues that people are finding if they are on the other side is that the data protection rules make it difficult to obtain the details of the person to sue. However it seems to me that if you are accusing someone of theft/fraud/breach of trust/whatever then data protection rules may not apply (or rather there is an exemption under 'prevention or detection of crime') however this means the police have to get involved, and they may not be interested if it is not a criminal act, just a breach of duty.

Please read everything above as possibly incorrect. As although I know a bit about this sort of thing I have not checked it, and it could be wrong.

A Constructive Trust relates to land and/or property doesn't it?

As regard being deemed to have taken the money out and spending it. When would it be deemed that you had done so? For instance if the wrongly deposited money was say £300 and you had a Santander 123 account with an average balance of 20K then unless you ever at any point cleared the account out there would always be the £300 in it!

You mentioned the possibility to sue. I can't see that would apply here because if the receiver spent the cash and refused to pay it back to the true owner, then it would constitute a criminal offence, ie theft.

Armorica

Gentoo365 wrote: »

The legal position, the regulatory position and the practical position may differ.

This is what I think, initially...

Legally, until you take the money out it is just an error in the amount the bank owes you. It is not your money, your balance is just incorrect. The bank either owes someone else that money, or nobody.

Once you take the money out (knowing that it is not yours) then you hold it under a constructive trust. i.e. you are looking after that money for the actual owner. You have to keep that money safe (i.e. covered by FSCS) and should not benefit from it in anyway. The interest earned is also owned by the true beneficiary.

Your obligation is to make an attempt to notify the bank and hence request they assist you in locating the true owner.

The 6 year thing does not really apply, as if you use the funds then you are committing a breach of your duties under the constructive trust.

at this point by knowledge is limited so I am not sure what the implications of that are, however it means that the true beneficiary can sue you.

The issues that people are finding if they are on the other side is that the data protection rules make it difficult to obtain the details of the person to sue. However it seems to me that if you are accusing someone of theft/fraud/breach of trust/whatever then data protection rules may not apply (or rather there is an exemption under 'prevention or detection of crime') however this means the police have to get involved, and they may not be interested if it is not a criminal act, just a breach of duty.

Please read everything above as possibly incorrect. As although I know a bit about this sort of thing I have not checked it, and it could be wrong.

I think it's right though - it's consistent with what I've read on FOS case histories over the years

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/87/87-banking-complaints.htm is the page I read years ago; the second example is closest to the one here and the third section on http://www.financial-ombudsman.org.uk/publications/technical_notes/wrong-account-payments.htm

eskbanker

SailorSam wrote: »

They've been talking about money going into the wrong A/c quite a lot recently on R4 Moneybox. Some listeners had almost lost their houses 'cos the banks wouldn't or couldn't give refunds. Last week though they were saying that since the pressure Moneybox had started to put on them, some banks are changing their rules.

I suspect that what they're referring to is the code of conduct that was introduced in May, which now provides a framework process to standardise how these misdirected payment issues are resolved, unless Moneybox have reason to claim that there's something different arising specifically from any pressure they've been applying.