Bank Windfall ?

[baden-baden]

My insurance company mistakenly paid my pension fund value into my bank account instead of my taxf-free cash amount. Thankfully, this paid off my overdraft but now they want the money back. Can they do this? They asked for it within 2 weeks but this all happened over a year ago. Amount in question is approx 5k.

b-b

[dzug]

Yes they can.

[baden-baden]

Thanks Dzug - but what's their argument.?

Also, my bank tell me they can't pay money back without my authority - Is this true because if it is, guess what I'm going to do?

b-b

[anniebird]

They can sue you in court for this amount. The only way you would get away with it is if you could prove you thought it was the correct amount. I suspect that you knew exactly how much you should receive so I think you should make arrangements to repay the money.

[dzug]

Their entirely valid argument is that it in the form you received it was not your money and that you have therefore stolen it.

[dzug]

Bear in mind if you don't pay it back you owe the taxman all the tax relief you got on it when paying in.

[Buenchico]

Section 1 of the Theft Act 1968 states:
"A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it".

Section 4 of the Act states:
"�Property� includes money"

Section 3 states:
"Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner"

Section 5 states:
"Where a person gets property by another�s mistake, and is under an obligation to make restoration (in whole or in part) of the property or its proceeds or of the value thereof, then to the extent of that obligation the property or proceeds shall be regarded (as against him) as belonging to the person entitled to restoration, and an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds"

http://www.statutelaw.gov.uk/legResults.aspx?L egType=All%20Primary&PageNumber=2&BrowseLetter =T&NavFrom=1&activeTextDocId=1204238

Putting that lot together means that, because you failed to refund the money as soon as you realised it was paid into your account in error, you have already committed theft. The maximum penalty for the offence is 7 years imprisonment. If I was you, I'd hand it back as soon as possible!

Chris

[Stu Dent]

It is NOT theft and no crime has occurred. You said it yourself, Chris. 'Appropriation' (in addition to intention to deprive) has to occur for the crime of theft to be completed. There was no appropriation - the insurance company put it there themselves.

However BB, you will still have to pay it back and the bank have a legal remedy in civil law - unjustified enrichment (Scotland) or beneficial interest (E&W). If I was acting on behalf of the insurer I would also be looking for the interest earned on the 5k.

[Buenchico]

Stu Dent:

Please read the definition of 'appropriation' given in Section 3 of the Act (above).The legislation specifically states that appropriation can occur even when the person receiving property (which includes money) did not steal it and came by the property innocently. All that is required to constitute 'appropriation' is an assumption of the rights of ownership. By attempting to keep the money, B-B has 'appropriated' it.

Chris

[fredpuli47]

Sorry Stu Dent , you are wrong. The only question at a trial would be whether or not the accused was being dishonest or not at the time when the appropriation took place.That there was, on the facts and in law, no 'appropriation' is inarguable. If you played it as dishonesty or not, you'd probably get a run in front of a jury. Juries are generous if they have any sympathy and they have a wide latitude on dishonesty , whatever judicial direction they get, and are likely to give the defendant the benefit of 'jury equity' if they like him enough or think the prosecution a touch oppressive(and/or they ,personally, might have done the same as the defendant !)The judge will tell them there's an appropriation and effectively take that question out of their hands ("though the facts are for you may think it's inarguable in the light of the direction on law I've just given you, and by which you are bound")

It's not likely that the police will get involved to prosecution, though it remains a possibility, a) because they'd have been called in by now and b) the CPS takes a sanguine view about the prospects of conviction (they know juries too!)

[Stu Dent]

Ok Chris, (and Fred). I'll admit I raced off on a tangent before I read the 1968 Acts definition of 'appropriation' more carefully. Having given it more careful consideration it looks as though I am wrong - well at least in England & Wales.

On the other hand I'm still not convinced I am wrong and I'll be happy to engage in some friendly debate over the issue. The definition of appropriation in the 68 Act seems pretty clear - whether it was someone else's fault or not, if you have their property and it was a mistake in how you came to possess that property, it's theft if you don't give it back. Right?

Problem with that is that I have a feeling the intention of that section is not to deal with banking or insurance errors but with what we call in Scotland 'theft by finding' - usually involving money or a wallet that has been dropped, picked-up, and not handed in to the police. Of course, a court could extend it to cases where money has been transferred in error.

The other thing is this: I've never heard or read of anyone being prosecuted for theft in such circumstances, the circumstances never ever arose during my studies, and it seems strange that the insurers (and many banks) don't use the threat of police action in order to get their money back. These organisations have their own in-house legal teams nad, let's face it, they're not shy at being heavy handed when they feel like it e.g. huge bank charges, repossessions etc.. Doesn't it strike anyone as a bit strange that they don't make such threats? For those reasons I still think the legal remedy lies within civil law rather than criminal law. Show me a case that proves I'm wrong. I can certainly tell you of some Scottish cases where the remedy was found in the civil courts - unjustified enrichment.

I can see how the wording of the legislation gives the appearance of how a criminal prosecution could occur. My scepticism comes from the lack

[Stu Dent]

of certainty due to the absence of cases where the 68 Act has covered such circumstances.

If I'm proved wrong though I'll gladly come back and admit I'm an eejit though.:-)

[baden-baden]

Thanks all

I guess I'd better give it back then. Interesting argument (the bits I could follow!) though.

B-B