July 1, 2019

Pay back the money?

On 18 June, an internal error saw FNB unwittingly paying out money to clients, with some seeing up to R3 600 extra in their accounts. After realising the mistake, the bank was swift to react and announced that it would take steps to retrieve the money.

This didn’t go down well with some customers, who didn’t see why they should part with their unexpected windfall. Many had already spent the money, or withdrawn it, and said that they would close their FNB account so that the bank couldn’t debit them as soon as funds became available. 

But nothing comes for free – and the splurgers could face legal action if they don’t, to borrow a popular phrase, pay back the money. 

The Supreme Court of Appeal ruled in 2004 that money paid in error can be recovered with interests and legal costs. 

South African law includes a principle called unjustified enrichment. This occurs when you receive a benefit, or any amount of money, with no legal right to do so, and the other party is impoverished by your enrichment. 

Put simply, if someone pays money into your account in error, you are enriched – because you have money that you are not entitled to. They are impoverished because they have lost that money, and still owe the sum to the person or business they intended to pay. 

Just because money appears in your account, it doesn’t immediately (or magically) become yours. You’re obliged to give it back if it was deposited in error. If you don’t, you can be sued by whoever deposited the money. 

And if you’ve spent that money, you’re liable for criminal prosecution, because, having spent money that is not your own, you are guilty of fraud. 

It will be interesting to see how FNB proceeds, and what action they take against clients who spent their “free” money. Last year, a student was arrested after she spent R810 000 of the R14 million the National Student Financial Aid Scheme mistakenly deposited in her account. Her trial is ongoing. 

If you need help recovering money paid in error, contact our office on 011 347 0300 or info@lawmen.co.zato make an appointment. 

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