Pretend someone worked at a company and was paid monthly. A month after leaving they are paid their severance, and should not receive any payment in the future.

A month later, they are contacted by the finance department, apologising that they were paid in error, and kindly asked to send the money back.

What would happen if this money was not returned?

The only results I found online state that the company would take it back from any future payments, however in the scenario above this person has left the company and therefore would not have any future payments.

Edit: I decided to do the right (and by the looks of the replies) legal thing and return the money, after checking with the CEO. They admit to a computer problem on their end, and apologised.

I might have misread some comments/answers, so just to clarify - this payment was made a month after my severance pay when I was not expecting any further wage payments from the company.

  • 17
    If you got paid in error, the company can demand the payment back. They can try to collect the outstanding by the "usual" means: sending you notices, engaging a collection agency, taking you to court, etc.
    – Hilmar
    Jul 31, 2022 at 21:10
  • 12
    Or, why not just return it, and avoid the issue? Seriously. Jul 31, 2022 at 23:41
  • 13
    Ah. Well, ok. I hope you are good with the cost/benefit analysis of the situation. Aug 1, 2022 at 2:43
  • 11
    @user5623335 maybe you have a bone to pick with them, but from experience remember it's rarely worth the effort. Endangering your reputation and exposing yourself to lawsuit... All for some petty revenge... Not the best idea
    – Mouke
    Aug 1, 2022 at 14:04
  • 22
    @user5623335 I am not entirely without sympathy, but here is some life advice, take it or leave it as you wish: if you are going to get into a fight with some entity, don't do it on terms where you are legally in the wrong. It's like giving them a free high ground advantage.
    – rwallace
    Aug 1, 2022 at 19:15

5 Answers 5


What would happen if this money was not returned?

The former employee would, based on the given circumstances, be guilty of theft contrary to section 1 of the Theft Act 1968:

(1) 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 5 defines "Belonging to another" to include:

(4)Where a person gets property by another’s mistake, and is under an obligation to make restoration [...] an intention not to make restoration shall be regarded accordingly as an intention to deprive that person of the property or proceeds.

Setion 4 states that:

(1)“Property” includes money...

Although there are statutory defences to theft, at section 2, to acting dishonestly they are not satisfied in this scenario:

(1)A person’s appropriation of property belonging to another is not to be regarded as dishonest—

  • (a)if he appropriates the property in the belief that he has in law the right to deprive the other of it, on behalf of himself or of a third person; or

  • (b)if he appropriates the property in the belief that he would have the other’s consent if the other knew of the appropriation and the circumstances of it; or

  • (c)(except where the property came to him as trustee or personal representative) if he appropriates the property in the belief that the person to whom the property belongs cannot be discovered by taking reasonable steps.

A very similar set of circumstances arose in the case A-G Ref (No 1 of 1983) [1985] QB 182

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: [by the Court of 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.

  • 13
    @MartinBonnersupportsMonica There is criminal liability, just not clearly where Rick has cited. 24A-1 makes it very clear: "A person is guilty of an offence if— (a)a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest; (b)he knows or believes that the credit is wrongful; and (c)he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled." Aug 1, 2022 at 15:02
  • 3
    @NickstandswithUkraine I don't think thst applies. Any credit in to the OP's account is not a wrongful one as it is clearly derived from a mistake and not theft etc as required by Section 24A(2A) for this particular offence to be committed.
    – Rick
    Aug 1, 2022 at 15:49
  • 7
    @NickstandswithUkraine The Crown Prosecution Service's website says "A credit is wrongful if it derives from theft, blackmail, fraud or stolen goods." cps.gov.uk/legal-guidance/theft-act-offences. Anyway, people have been convicted of s1 theft after keeping overpaid wages, just as Rick claimed.
    – Lag
    Aug 1, 2022 at 15:52
  • 8
    @Lag Thankyou. That's pretty convincing evidence that Rick is right and I was wrong. Aug 1, 2022 at 15:54
  • 3
    @Rick learn something new every day! Funny how jargon sometimes gives the exact opposite meaning to a normal reading of the same sentence :) Aug 2, 2022 at 10:19

That’s up to the company

They might decide it’s not worth the hassle and write it off.

Alternatively, they might sue for recovery. They will almost certainly win that suit.

  • 2
    I was looking for specific Law. Jul 31, 2022 at 22:54
  • 22
    @user5623335 the specific law that says you can’t keep things that don’t belong to you? The one that is the heart of all property law?
    – Dale M
    Jul 31, 2022 at 23:32
  • 2
    Since you labelled it England- here is from the UK. Theft Act of 1968. enhertsccg.nhs.uk/sites/default/files/…
    – Damila
    Aug 1, 2022 at 4:51
  • 3
    In Germany, they could ask you to return the money based on BGB § 812.
    – sleske
    Aug 1, 2022 at 7:37
  • 2
    The U.S. law about keeping unsolicited goods to which @AzorAhai refers is about preventing the scam in which a stranger sends someone merchandise they didn't request, then demands payment for it. (See 39 USC §3009). It is not in any way relevant to unsolicited bank deposits. Aug 2, 2022 at 17:28

Generally the company is entitled to try to recover money they paid in error. In terms of civil law the company may sue the person on the basis of 'the doctrine of mistake'. They can apply to county court to claim the money. Up to £10,000 it will be a 'small claim'.

In terms of criminal law the person is committing theft if they refuse to return the money knowing it was paid to them by mistake.


You first need to know if the company is trustworthy. Paying money, claiming a mistake, and asking for money back is a very common scam. The money could go straight into the pocket of someone in payroll, for example. The simplest way for a genuine company is to contact your bank and tell them that the payment was made in error; the bank will be able to refund the money without any problems and without any risk.

In a slightly different situation - freelancer getting overpaid by mistake, say being paid $5,319 for a $3,519 bill, you could bet that it is a scam. For a reputable company, you would contact them independently before you pay anything.

  • 4
    Where do banks just reverse payments at the sender's request? Then, even if they do, they won't be able to if the payee has already removed the funds from their account.
    – Greendrake
    Aug 1, 2022 at 14:26
  • 1
    @Greendrake And removing the funds is not necessarily "I'll grab the money while I can" - they might be switching banks for some unrelated reason, or move money from a non-interest account to an interest-bearing account - and in any of those cases if the reversal results in an NSF fee, it would be a problem. Aug 1, 2022 at 15:11
  • @Greendrake you end up with an overdrawn account and all your diirect debits start bouncing. It can be days later. This is not the same as a payment not clearing, true, The effect is the same.
    – mckenzm
    Aug 1, 2022 at 19:07
  • It's not "simple" and it may be unlawful for a payer or bank to reverse a cleared payment without the payee's authorisation.
    – Lag
    Aug 2, 2022 at 7:27

Short answer, correspondence. Quietly. Termination payments have components.

Possibly this is an unjust enrichment. But it is highly likely that they have breached one or more duties of care along the way.

I have seen all sorts of things happen. If it is only a week's pay you may be "rehired" (on paper) for a week, just to bury it.

Whatever happens your records must agree.

There are sniff tests involved. Tax. Redundancy. Your original letter of offer, any variations entered into. Most companies would rather overpay you and wear it because it costs more to correct.

It can depend upon the amount, and any settlement you can expect.

I agree with gnasher729, caution and due diligence are required,for many that do not receive bonuses, this payout can be several years of pay and makes you a target. For some people this is more money than a lotto win.

You should not be contacted by Finance, nor even General Counsel, it should be your manager or Human Resources. You should receive (or demand) a revised termination statement. You should also contact your union if any as they will have a solicitor and be across your letter of offer and any grandfathered rights you may have.

There will be a basis for any termination payment. They should explain what was wrong, and accept any costs you may reasonably incur. Wage theft is real. They might not be able to argue that you were paid at a higher grade than they meant to pay you for 5 odd years. Nor that you allowed your rostered days off to be forfeited by taking single days of Annual Leave every two weeks.

  • I could call this a slam dunk unjust enrichment case.
    – ohwilleke
    Aug 1, 2022 at 22:36
  • I think in England & Wales (as the question is tagged) the written statement of employment particulars would be relevant, rather than any offer letter (if such even existed)?
    – psmears
    Aug 2, 2022 at 13:37

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.