If a person pays a debt due to a company, and gets a receipt showing the debt has been fully satisfied, but then that company (potentially in error) refunds the full amount without any communication explaining why, can that person keep the repayment?

As far as that person is concerned the debt has been paid, so does the fact that the company chose to make the refund make it their problem?

  • 2
    Note that the existence of the debt that was satisfied is basically irrelevant since the debt no longer exists when the erroneous payment is made. The situation would be legally almost identical if the prior debt had never existed. The issue is whether you're not entitled to keep the erroneous payment, not whether the erroneous payment somehow resurrects the debt that you can prove that you satisfied. Jul 1 at 17:33
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    Is this wishful thinking or an actual situation? If a company opens/re-instates/forces a debt in your name then I would think there are much bigger issues going on aside from clerical errors. If they have in fact placed a loan in your name, gave you the money, and you keep it then that could be acknowledgement of a loan.
    – MonkeyZeus
    Jul 1 at 18:12
  • Aside from the legality of returning or not returning a legitimate accidental payment, I would recommend first making very sure that this is a legitimate payment. This sort of thing is a red flag for certain types of scams wherein a fraudulent payment is made which looks real and is only discovered to have been fake after you've already "returned" the money to someone, leaving you out the money you sent. Jul 2 at 15:30

Not returning a payment made in error may amount to theft.

s.5(4) of the Theft Act 1968 covers this scenario:

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.

And the leading case law is A-G Ref (No 1 of 1983) [1985] QB 182 where, in similar circumstances:

The defendant, a police woman, received an overpayment in her wages by mistake. She had noticed that she had received more than she was entitled to but did not say anything to her employer. She did not withdraw any of the money from her bank account. The trial judge directed the jury to acquit. The Attorney General referred a question to the Court of Appeal.

Held [on appeal]:

It was possible for a theft conviction to arise where the defendant had not withdrawn the money. There was a legal obligation to return the money received by mistake.

  • From what I've read elsewhere, is money paid by one's employer not treated differently in this regard to an arbitrary company? Jul 1 at 8:38
  • Interestingly, where a person gets property by their own mistake it is not theft as long as it's a genuine mistake. So, a wages clerk who accidentally overpays herself would be only potentially liable civilly to repay it. But if she made the same "mistake" every month then she would be hard pressed to rely on this as a defence.
    – Rock Ape
    Jul 1 at 8:44
  • @Persistence can you cite the source that you read elsewhere?
    – Rock Ape
    Jul 1 at 8:58
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    @Persistence You're reading that way too closely. Those are examples, in lieu of an exhaustive list of all the ways someone might accidentally give you money.
    – Sneftel
    Jul 1 at 14:56
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    @BillyC., umm no. Finders keepers applies until and unless the original owner claims it. If it has gone from being 'lost' to being 'abandoned' then it's finders keeprs. This is common law from forever, so generally also applies in US, AU, CA, NZ etc
    – mcalex
    Jul 2 at 7:45

Speaking in very general terms, the law of England and Wales allows for the recovery of payments made by mistake. See, for example, Virgo, The Principles of the Law of Restitution (2015) at p 157:

A claim to recover money mistakenly paid by the claimaint to the defendant is often regarded as the paradigm example of a restitutionary claim founded on the unjust enrichment principle. In such a case there is clearly an enrichment at the claimant's expense and, at least where the reason for the claimant making the payment arose from a mistaken belief that he or she was liable to pay the money to the defendant, there is a clear justification for restoring the value of the money to the claimant, since the claimant's intention to make the payment can readily be treated as vitiated by the mistake.

Further information is freely available in the Wikipedia article on Barclays Bank Ltd v W J Simms, Son and Cooke (Southern) Ltd [1980] 1 QB 677. Although the basic principle is simple, the concept of "mistake" contains a lot of complexity, and there are various defences available to a claim in unjust enrichment, such as change of position. This is particularly relevant if the mistake is not brought promptly to the payee's attention.

Therefore, the question "can the person keep the repayment?" cannot be answered definitively. However, to a first approximation, the answer is "no."


You have received money that you are not entitled to. While the previous debt might have been fully satisfied, you basically now have a new one. You owe them money, since you received money from that that isn't yours to have.

While personally I would hold the money, stash it somewhere for the next couple of years, and not tell anyone.. Legally you should pay it back.

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