By mistake, £15,000 has arrived in my account. I’m not surprised, since my bank is hopeless these days. I’d like to spend it on a new kitchen. Can I keep the money?
HL, by email.
For the last 180 years, the English courts have taken the approach that a person who receives money in error must pay it back under what is known as the law of restitution.
This is a remedy that seeks to reverse the unjust enrichment of the recipient of money received in error by restitution of the corresponding benefit or enrichment to the person or entity that paid it in error.
So the general rule is that you can’t keep money sent to you in error.
However, there are two exceptions to this rule that can be used as a defense if you are taken to court for spending money sent to you in error. These are known as “change of position” and “good consideration.”
The bank has given a reader a £15,000 windfall. Do you have to return it?
For the defense of change of position to arise, you must prove that as a result of the payment made, you changed your position in good faith and to such an extent that it would be unfair to demand the return of the money. The mere expenditure of money will not be sufficient to establish this defense, and the innocent party must have incurred expenses that it would not otherwise have incurred.
There must also be a causal relationship between the receipt of payment and the defendant’s change in position.
I must say that there will be a rare occasion when a consumer who has received money into his or her personal bank account in error will be able to successfully use this defense.
If the person or entity who mistakenly sent you money owed you money, you can use the “good consideration” defense. A classic example of this is when his employer pays him too much money in his monthly salary, but has not yet paid his expenses or the bonus payment to which he is entitled.
One caveat: If you know that the money sent to you does not belong to you, neither of the two defenses cited above apply. If you do not take steps to repay it or cancel the credit, you could be charged with a criminal offense.
There is some good news. If you receive money in error, you have the legal right to keep the interest you earn while it is in your bank.
I took an online accounting course which cost £950 but it didn’t reach the level I expected. The company accepted this and offered me a partial refund, but says I will have to pay a £19 processing fee for the refund. Do I have to pay this or can I insist on upgrading the course?
TF, by email.
It is unusual for a course provider to accept that what they have sold you does not meet the standard it should be. This means that all you have to do now is determine the remedy to which you are entitled. There is good news here, as the Consumer Rights Act 2015 has a specific provision dealing with the remedies that consumers are entitled to when digital products, such as a downloadable or interactive online course, do not comply with standards .
Article 44 of the law says that, indeed, you have the right to a price reduction, which will obviously be equivalent to a partial refund. The refund amount is calculated on a case-by-case basis and depends on how much the service is devalued by not being as good as it should have been.
In direct response to the first part of your question, the course provider cannot impose the £19 charge as Section 44(6) clearly states that “the trader must not impose any fee on the consumer in respect of the refund” .
Regarding the second part of your question, the Consumer Rights Act gives traders the right to refuse to repair or improve goods or services provided where this is not possible or economically viable. So in this case, it’s unlikely you’ll be able to force the course provider to improve it, but it’s worth asking.
Finally, if you believe that the course will no longer be of use to you, there is the option of requesting a full refund on the grounds that the course was mis-sold to you and is therefore not of satisfactory quality (a breach of Section 34 of the Act), not fit for purpose (a violation of Section 35) and not as described (a violation of Section 36).