By mistake, £15,000 has landed in my account - I’m not surprised as my bank is hopeless these days. I’d like to spend it on a new kitchen. Can I keep the money? H. L., by email.
A reader has been given a £15,000 windfall by their bank - do they have to pay it back?
Consumer rights lawyer Dean Dunham replies: For the past 180 years, the English courts have taken the approach that a person who receives money by mistake 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 restoring the relevant benefit or enrichment to the person or entity that paid it by mistake.
So the general rule is that you cannot keep money sent to you in error.
However, there are two exceptions to this rule that can be used as a defence if you are taken to court for spending money sent to you in error.
These are known as ‘change of position’ and ‘good consideration’.
For the change of position defence 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 unjust to require you to repay the money.
The mere spending of money will not be enough to establish this defence, and the innocent party must have incurred expenditure which he or she would not have incurred otherwise.
There must also be a causative link between the receipt of payment and the defendant’s changed position.
I should say, it will be a rare occasion when a consumer who has received money into their personal bank account in error will be able to successfully use this defence.
If the person or entity that sent you money in error owed you money, you can use the ‘good consideration’ defence. A classic example of this is where your employer pays you too much money in your monthly salary, but had not yet paid your expenses or a bonus payment you are entitled to.
A word of warning: if you know that money you have been sent doesn’t belong to you, neither of the two defences cited above can be applied. If you don’t take steps to hand it back or cancel the credit, then you could be charged for a criminal offence.
There is some good news. If you receive money in error, you are legally entitled to keep any interest it earns while it is in your bank.
READ MORE: Must I tell buyers about my noisy, messy neighbours? Our consumer rights lawyer DEAN DUNHAM replies
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My £950 course is no good - why can't I get all the money back
I’ve taken an online bookkeeping course which cost £950 but is not up to the standard I expected. The company has accepted this and has 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 instead insist it improves the course?
T. F., by email.
Consumer rights lawyer Dean Dunham replies: It's unusual for a course provider to accept that what it has sold you is not up to the standard it should be. This means that all that you have to do now is determine the remedy you are entitled to.
There’s good news here as the Consumer Rights Act 2015 has a specific provision dealing with remedies consumers are entitled to when digital goods, such as a downloadable or interactive online course, are not up to standard.
Section 44 of the Act says that you are, indeed, entitled to a price reduction, which will obviously amount to a partial refund. The amount of the refund is calculated on a case-by-case basis and depends on how much the service is devalued by the fact it is not 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 ‘the trader must not impose any fee on the consumer in respect of the refund’.
In respect of the second part of your question, the Consumer Rights act affords traders the right to refuse to repair or improve goods or services provided where this is either not possible or is not economically feasible. So here, it is unlikely you could force the course provider to improve the course, but it is worth asking.
Finally, if you feel the course will now not be any use to you, there is the option to request a full refund citing that the course was missold to you and is, therefore, not of satisfactory quality (a breach of Section 34 of the Act), not fit for purpose (a breach of Section 35) and not as described (a breach of Section 36).
Can Dean Dunham help you?
Do you have a legal question for Dean Dunham? Email d.dunham@dailymail.co.uk, with brief details of your question or problem.
No legal responsibility can be accepted by the Daily Mail and This is Money for answers given.
> Read all of our consumer rights expert Dean Dunham's previous columns
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