Been Overpaid by £700- do I have to give it back?!!!

Scroll to see replies

Heh, I was told in situations like this, as long as you acted in good faith and have already spent all of the overpayment, they can't demand you return money because the rest of the money in your bank account is YOUR money, not theirs.

Reply 21

simeon

Citizen Zero

No, that is not true.

Reply 22

Citizen Zero

simeon

No, that is not true.

True or not, I don't know, as it wasn't a practising lawyer who told me. Just an employment law lecturer when we were looking at a case where an employee had been overpaid. Although he did say it with a bit of a chuckle, so I assume he didn't really mean it. :tongue:

Reply 23

zef99

The legal point you are looking for is known as 'Change of Position'. If you can find a clear, good definition of that and its applications then that would help.

Reply 24

iamorgan

I think this is a case of unjust enrichment -you are strictly liable to pay this back, unless there is an equitable reason why you should not be forced to repay the money. NB that this is a fairly new defence in English law (only recognised since 1991).

Essentially, the general rule as I understand it is that you DO have to repay overpayments, except in EXCEPTIONAL circumstances (i.e. maybe if they came back to you 15 years later and said they wanted £x back from you, this may be an equitable defence); such a short time gap between the overpayment and the request seems fair enough.

That's my understanding; I haven't actually studied this. The only case I have come across that is remotely similar is a case where a police officer got overpaid by about £70, knew of the overpayment but failed to notify the force of the overpayment; she was required to repay this. The difference here is obviously that you claim not to know of the overpayment, until now.

Reply 25

InnerTemple

Doesn't S.5(4) of the Theft act say that if you receive property by mistake, then you must give it back? Or else it can amount to an appropriation.

Look at: Attorney General's Reference (No.1 of 1983)

Women police officer was over paid and charged with theft.

Dave

Reply 26

zef99

Can I just direct you here. Especially to the last paragraph:

Where the worker genuinely believed he or she was entitled to the overpayment and had spent the money in good faith a civil court might decide that the employer was not entitled to recover.

Reply 27

Revd. Mike

zef99

Can I just direct you here. Especially to the last paragraph:

That defence very very rarely stands up though. You'd have to demonstrate that you believed the extra money was entitled to you and that you made all reasonable efforts to find out if that was the case.

Reply 28

zef99

Revd. Mike

How do you know?

Why would the onus be on you to make the effort to establish whether that money was yours? What if one just presumed it to be a bonus, or spent it without realising it had been overpaid.

My point is that once the money has been put in to your bank account, your money and the overpaid money has mixed - fine so far, as long as nothing has been spent. But the moment some of the (overall) money in your bank account has been spent, it cannot be established whose money it was that was spent - was it some of the original money already in the bank account? Or was it some of the overpaid money? My point being that when it cannot be established precisely whose money was spent, then there is no legal basis on which to require the receiver to pay the money back.

I'm going to give you a quote from Graham Virgo, Cambridge Prof. and recognised expert in the areas of Restitution and Unjust Enrichment.

Graham Virgo

Let me tell you what the law says. English law says, if you pay money to somebody by your mistake, you can get it back even though you made the mistake and they’re completely innocent. However, if the person who received the money spent it in good faith – and here Neil had spent it on a luxury cruise – and if all the money has gone, then you don’t have any liability to pay anything back. Now, you probably didn’t realise when you came on this open-day today, you might learn something of real significance to all you. If your employer pays you too much money by mistake, what do you do? Spend it. Absolutely. Now, you’re… Okay. Janet O’Sullivan’s quite rightly said, you’ve got to be in good faith, and if you really, really suspect, then maybe you’re not in good faith. But if you’ve got this extra money, “Oh, there’s a bit more there than I thought,“ spend it immediately and then they cannot sue you to recover it.

Here's the source, it was taken from an open day at Cambridge where various legal problems were being discussed,hence the reference to 'Neil'.

One key point that isn't explained further is Virgo's line 'and if all the money has gone', it implies that the rules are different when some money is left, but I wouldn't want to speculate what that difference is.

It's not quite as detailed as one might like to see, so doesn't tie off all the loose ends, but the main point is clear enough.

With regards to the OP, there is another problem, that I can't seem to find an answer to:

1 Economic Historian

I didn't realise I was overpaid.
I haven't spent the money as such in terms of the account, but I do owe it to someone (family member-paid with their credit card), and will withdraw the money to repay them in due course...so basically, I've spent the money without knowing it since I thought I had the budget to do so, but it's in my account at present...
they made the error, I didn't realise and planned my expenditure based on it,
is there no way/ 'loop-hole' enabling me to now pay now?

I think someone with more knowledge, or at least more sources, will need to clarify whether their spending of someone else's money, with the view to paying it back, which was based on the assumption that they had money ready to pay them back with, counts as spending the overpaid monies. Since they would not have allowed the other person's credit card to be used, had the overpaid money not been in their account, so they were committing to an expenditure which in good faith they felt they were able to repay.

Reply 29

jacketpotato

Virgo talks in terms of the money being "gone" because he is intellectually interested in the law of equitable tracing; particularly because he sees it as restitutionary in nature. In actual fact, the money might not be "gone": see below.

The starting point is that the money is the employers, not the Ops. Mistake of fact is a valid grounding for the employer to make a personal restitutionary claim against the Op. This is why the burden is on the Op to show a defence: the burden is not on the employer (once they demonstrate the Op was overpaid), contrary to what some people have said.

What the Op needs to understand is that a change of position defence is discretionary. You need to show that it would be inequitable/unfair for the employer to claim the money back.
If, 1) you realised you were overpaid or it should have been obvious to the reasonable person, 2) you spent the money on something you would buy anyway (e.g. on rent), 3) you have the money sitting around in a bank account then you have no defence and the employer can get the money back.
What you really need to demonstrate is that you embarked on some unrecoverable item of expenditure, such as a holiday or a thumping night out, that you would not otherwise have done. This is what the quote from Virgo is really saying: he likes to emphasis the Change of Position defence because it fits in with his restitutionary analysis of many things which are traditionally seen as proprietary (he does it in lectures too), but I'm not going to go anymore into the academic background here.

In short, Op, you need to demonstrate that you spent the money on some sort of unrecoverable expenditure which you wouldn't have done anyway, and that you reasonably believed you were entitled to the money. You also have to weigh up the risk of ****ing off your former employer (might make it difficult to get a reference).

If you don't intend to pay back the employer, I suggest you get in touch with the Citizens' Advice Bureau (google it, its free).

Reply 30

Revd. Mike

zef99

Because it is. I was in a somewhat similar situation not too long ago, where I was paid money that I wasn't entitled to. I thought it was a bit suspicious, and I asked the management if I'd been paid correctly. They didn't know at the time that I'd been overpaid, so said yes, and I spent the money. They then realised and demanded the money back. I then went and checked with various online information sources, the citizens advice bureau, ACAS and our lawyer, who all stated that unfortunately I would have to pay it back, although I was entitled to arrange with my employer an affordable repayment scheme.

Reply 31

Onearmedbandit

It's been a long time since I did contract or property, but I'm pretty sure you'll have to give the money back.

In property, I seem to remember that if you give someone something then, in the absence of evidence that you intended for title (ownership) of the property to be transferred, they will still own the property.

I can't cite any statutes or cases without looking it all up, though, and I can't be bothered. And I'm probably wrong. But if someone wants to look at this point in more detail I'd be interested to read it!

Reply 32

Ggbb

I have the same problem!! I left my job 4 months ago! £700 went in my bank on the 1st I don't no if this is an over payment? Or if it is what they owe me?? I was there 11 months and had 3 days AL!! So they so owe me my holiday pay and my 2 weeks in hand when I got my last pay from them I thought they ripped me of with my holiday pay.. I don't want to contact them... Surely this is what they owe me? Any advice?

Reply 33

Lorrain bulmer

I didn't know I had been over paidAs I was on zero contract Also I did get mileage allowance on the areas I coverd and hourly rateBut for 6 months I did not receive a pay slip.showing how much I was paid and mileage paidThis was November and December's pay and mileageWhich I was covering completely out of my areaSo I presumed it was for the extra miles I had doneThey are demanding moneys back at 69 pounds a monthCan I say there is 25 of us who they say they have over paid