Accidental Payments Into Your Account | What To Do (2024)

Many of us are used to seeing less money than expected when we check our bank balance but what happens when there are significantly more funds than you are expecting to see because a payment has been made by mistake?

A shocking clerical error at Northern Powergrid made the news this week, as several customers were accidentally sent cheques for trillions of pounds as compensation for the power outage caused by Storm Arwen last November. William Watkins, associate solicitor in our Dispute Resolution team, investigates your legal rights and obligations if you ever find yourself on the receiving end of an accidental windfall.

Why do accidental payments happen?

Receiving an unexpected cheque or deposit into your bank account can happen for all sorts of reasons, from a banking error to an overpayment from your employer, but while it may sound like a dream come true, the reality can be quite different. Clearly, the sums involved in the Northern Power compensation story were so high that no customer will have thought they could keep it. However, many of us will have experienced an unexpected payment at some point in our lives and will have been less clear on our rights.

What to do if you receive an accidental windfall

Whether they like to admit it or not, the first question most people would ask themselves in a situation like this is likely to be ‘Can I keep the cash?’ but unfortunately, the answer is no.

Legally, if a sum of money is accidentally paid into your bank or savings account and you know that it doesn’t belong to you, you must pay it back.

If you keep any money that is wrongly credited to your account and don’t take steps to cancel it, you could end up being charged with ‘retaining wrongful credit’ under the Theft Act 1968. Civil action in the County Court can also be taken against you if you refuse to return the funds.

No matter how tempting it is to say nothing and see if the mistake gets noticed, you should always inform your bank immediately. Even if the money is from your employer or from the taxman, you still need to let your bank know as you could get into trouble for just leaving the money in your account if you know it should not be there. Instead, you are expected to take reasonable steps to cancel the transfer or return it to the sender.

What if you have already spent the money before you notice the error?

People often think that if the cash is gone, they won’t have to pay it back but this is not the case. If you spend any money knowing it is not yours, you face a maximum sentence of ten years in prison and may have to pay a hefty fine.

Pleading ignorance is very unlikely to work in your favour and could bring a criminal charge so is never worth the risk.

Once you have alerted the bank, where should you keep the money?

Many High Street banks have processes in place to arrange for the swift recovery and the return of accidental or mistaken payments when they have been notified. However, if some time passes and the bank has still not taken action, and you are worried about spending the money, it might make sense to move it into an easy access savings account that is linked to your bank account, to help make sure you do not eat into it accidentally while the error is rectified.

You should ensure that it is an account that you can remove the money from at any time so that when you’re asked to pay it back, you can do it immediately. You might also get to keep any interest that was earned in that time.

Are there any exceptional circ*mstances where you can keep the money?

There have been some, very rare examples where individuals have been allowed to keep money that has been accidentally paid to them but these are very few and far between. You would need to be able to argue that you were expecting a similar sum and thought that was what you received or that you did not realise that you were given the money in error.

Winning cases like these is extremely rare so it is never worth taking the risk of keeping quiet and not telling your bank about the mistake.

Honesty is always the best policy

Even if nobody contacts you immediately, do not be tempted to spend your windfall. Banks regularly carry out audits which means they will always catch up with you.

Honesty is always the best policy and, by informing your bank or employer promptly, you could even find yourself on the receiving end of a reward. There are plenty of examples where people have been allowed to keep some of their overpayments by being honest and upfront.

Even if there’s no reward, being honest and giving the money back is better than the potential punishment you could face for being caught spending cash that’s not legally yours.

If you are involved in any type of legal dispute and want professional advice, get in touch with the Dispute Resolution team at Harding Evans Solicitors on 01633 244233.

Accidental Payments Into Your Account | What To Do (2024)


Accidental Payments Into Your Account | What To Do? ›

Contact your bank and let them know about the accidental payment and it will arrange for the money to be returned.

What to do if someone accidentally puts money in your account? ›

Even if the money is from your employer or from the taxman, you still need to let your bank know as you could get into trouble for just leaving the money in your account if you know it should not be there. Instead, you are expected to take reasonable steps to cancel the transfer or return it to the sender.

Can I keep money that was deposited into my account by mistake? ›

You may wonder if it's a case of “finders, keepers.” Well, the only time that you can keep funds added to your account is when the money deposited was legitimately meant for you. When a bank error occurs in your favor, you cannot keep the money — even if the error seems small and likely to fly under the radar.

What happens if someone accidentally transferred money into my account? ›

The sender can visit the receiver's bank branch, inform them, and give a written request to return the amount, showing proof that the money was transferred mistakenly to the beneficiary (screenshot of the transaction, bank account details, etc.).

What if I get money in my account by mistake? ›

If the bank deposited money to your account in error, it doesn't need your permission to remove those funds and deposit them into the correct account. The bank may also correct the error by exercising an offset, which allows a bank to charge the account for a debt owed to the bank.

Is it illegal to keep money someone accidentally sent you? ›

Either way, the only money in your account that is truly YOURS is whatever YOU'VE put into it or earned. If someone else, or another company, accidentally xfered money in for whatever reason – it is legally NOT yours.

Is it illegal to spend money accidentally transferred to you? ›

If money is incorrectly transferred into your account, you should notify your bank. Your bank will then try to return the money to the sender. You should not spend or withdraw the money transferred into your account by mistake because it is not legally yours and you have to pay it back.

How do I get my money back from wrongly deposited? ›

Seek Assistance from Your Bank: Contact your bank and inform them about the wrong transaction. Provide them with all the necessary details and documentation. They can help initiate the chargeback process to recover the transferred funds.

Can a deposited money be reversed? ›

If you think that it can be reveresed in the way that after depositing cash , after a couple of hours you ask the bank to reverse the deposit entry and give back you the cash then answer is a big NO . As there is no such provision in banking .

How do I reverse a deposit to wrong? ›

Once you complete a transaction and realize it was erroneous, tap on the Reverse transaction icon on the M-PESA APP. You will be presented with reasons why you want to initiate the reversal. Select the reversal reason - e.g. wrong amount, wrong recipient, other etc.

Can you keep money paid to you in error? ›

If it was paid by mistake, you cannot keep it. If you refuse to return it, or if you spend it, you may face a criminal charge. If you notice an unexplained payment in your account, you should contact the bank immediately to investigate it and have it reversed.

Can you reverse an accidental payment? ›

Chargebacks allow consumers to reverse a disputed charge directly through their credit card provider. Chargebacks can protect you from erroneous charges and credit card fraud, but also from poor quality products and services.

How do I get my money back from an accidental transfer? ›

The earlier you report the mistaken transaction, the more rights you have. If the money is still in the other person's account, and both banks agree it was a mistaken payment: If you reported it within 10 business days, the money must be returned to you, usually within 5 business days.

What happens when you spend money that was mistakenly sent to your account? ›

Sure, but you'll eventually have to pay it back. Banks are protected against losses from a simple mistake. You know what's right. You don't have the right to take things that do not belong to you.

How long does a bank have to reverse a payment? ›

The National Automated Clearing House Association (NACHA) establishes the rules, deadlines and criteria for a reversal: The reversal request must be processed no later than four banking days from the settlement date of the payment. The reasons for a reversal are limited to: Incorrect payee.

What to do if you have paid money into the wrong account? ›

Contact your bank as soon as possible after realising your mistake. The sooner you do this, the better your chance of recovering your money. If your money went to an invalid account, it will usually bounce back into your account. Retrieving a mistaken payment to a valid account can be more difficult.

How to recover money paid by mistake? ›

Seek Assistance from Your Bank: Contact your bank and inform them about the wrong transaction. Provide them with all the necessary details and documentation. They can help initiate the chargeback process to recover the transferred funds.

What to do if someone sends money in my account? ›

Ask the sender to cancel the transaction immediately — in many cases, the sender can simply contact the app's customer support to cancel the transaction. If the sender refuses to do so, contact the app's customer support yourself, explain the situation, and ask them to reverse the transaction.

Why would someone deposit money in my account? ›

Scammers can deposit funds into their own account either digitally using a smartphone or physically at a bank or ATM. Money laundering through your account: Contact your bank immediately if you notice an account deposit you don't recognize. Someone may be using your account to launder money obtained illegally.

Can a scammer reverse a bank transfer? ›

Scammers have received the money, transferred it to another account, and disappeared. Falling victim to phishing, pharming, or CEO fraud unfortunately doesn't qualify for reversing a wire transfer. However, there are some circ*mstances under which you might get lucky.

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