Can a company refund you then take back that same refund?

Pastrytarget

Hi,
I purchased something via paypal from bank account, everything went through fine. Couple of weeks later, get a refund via paypal with paypal indicating it came from the company I purchased from. Didn't do anything with it and the service I paid for was still working. Couple of weeks later getting an email saying that that refund was "an error and paypal would take the money back out of my account (assume paypal account, not dive into my bank account). No issues with paying it back since I got the service I paid for.

I know there's already a lot on what to do when you receive money you weren't expecting (aka don't spend it) but my question is can a company willingly give you a refund then try and take it back? And so if, what legal basis allows them to do so? Are refunds for services covered in the same manner as accidentally sending money to the wrong person?

Thanks in advance.

the_lunatic_is_in_my_head

As far as I know if someone gives you money in error they can seek to recover it. 

If you did prevent them taking the money again (they'd likely stop the service if you did this) it would depend on the amount as to how much effort they'd put in to recovering it. 

davidmcn

I expect Paypal's terms allow it to happen. Certainly "normal" bank accounts can retrieve payments made in error to your account. It doesn't really make a difference whether it's a payment made in error to somebody who is a customer, or a payment made in error to the wrong person, it's a mistake which can be corrected.

unholyangel

Pastrytarget said:

Hi,
I purchased something via paypal from bank account, everything went through fine. Couple of weeks later, get a refund via paypal with paypal indicating it came from the company I purchased from. Didn't do anything with it and the service I paid for was still working. Couple of weeks later getting an email saying that that refund was "an error and paypal would take the money back out of my account (assume paypal account, not dive into my bank account). No issues with paying it back since I got the service I paid for.

I know there's already a lot on what to do when you receive money you weren't expecting (aka don't spend it) but my question is can a company willingly give you a refund then try and take it back? And so if, what legal basis allows them to do so? Are refunds for services covered in the same manner as accidentally sending money to the wrong person?

Thanks in advance.

You answered your own question. You agreed to pay the sum in exchange for the services. 

Accidentally sending money to the wrong person means it's still yours. There is even an offence for dishonestly retaining a wrongful credit. If you receive sums you know or believe to be incorrect, you're supposed to take reasonable steps to ensure it's corrected.