Mistake in payment

MarthaMyDear

Hi guys,

Just going to make a long story short! A good friend of mine just called me in tears so I said I would come here for some info!

She does occasional work with a small company. Maybe an odd job once or twice a month and then a small payment. All payments are straight into her account I don't think she's registered with them through the tax office or anything like that. A few months back they mistakenly paid her more than they should have. Not a huge amount but a lot more than they should have as she was only owed a small amount. She checked her balance soon after and assumed she had gotten a repayment that she had been waiting on for a long time. She had no other money being paid into her account and never even thought that it would be the small company who paid it. She admits it was very stupid of her not to order a statement or ring the bank but she just said she was delighted to see she had finally got it and didn't use her head to double check where it came from, as she thought there was literally no other explanation.

She withdrew the money and immediately repaid her student loans. She received a statement last week and realized when she read back where the money had come from. She contacted the company straight away (who hadn't noticed) and they were shocked. They asked her to refund it straight away and she explained the whole story to them. They kept thanking her for letting them know etc and she said she would contact where she thought the payment was from to see if there was any update then she could just give them that money.

They have gotten back to her and said that there is no update and her application is still being processed and she might not hear back about it for a long while. Now the company is demanding she pay it back by the end of next month.

She's all over the place, she feels so stupid for just seeing money in her account and using it (so no bashing her please ) does anyone here have any advice? She lost her job not long ago when the place she worked in closed down due to the recession and she has no other income at the moment. She is still in college. I feel terrible for her as she is so honest and usually very good with money. She was so happy to pay off all her loans now she's in bits. She is considering taking out another loan to pay the money back is that advisable?

Sorry if the story is a bit vague/confusing!

MarthaMyDear

I forgot to add...the person who made the mistake and has been contacting her about the payment hasn't told their management yet. I think that's why they want it back asap.

Eoin

I don't know how this works if she's more of a supplier to them than an employee.

But if she was an employee, then she would have to repay it - but they would have to be reasonable about it; e.g. set up a payment schedule.

Nody

Offer to pay it off in installments and press on the fact that she was the one who brought it up to them this early.

Milk & Honey

Eoin wrote: »

I don't know how this works if she's more of a supplier to them than an employee.

But if she was an employee, then she would have to repay it - but they would have to be reasonable about it; e.g. set up a payment schedule.

She is considered to hold the money on resulting trust for them. She owes them the money. She should simply tell them she will work it off. They might give her more work to clear it. If she she gets more hassle she should ask to speak to someone more senior than the person she is talking to at the moment. That should shut them up.

fasttalkerchat

If she gets a loan she will be paying interest on it. Why should she lose out for their mistake.
As was mentioned off she should be allowed to pay it off in installments. If she is a student and not working part time then maybe agree to pay at a rate of 20% of her monthly income.

Mrs OBumble

fasttalkerchat wrote: »

If she gets a loan she will be paying interest on it. Why should she lose out for their mistake.
As was mentioned off she should be allowed to pay it off in installments. If she is a student and not working part time then maybe agree to pay at a rate of 20% of her monthly income.

It was her mistake though, assuming where the money had come from.

I'd imagine that the person who made the mistake will get into trouble: rather than trying to cover it over (which requires your friend paying it back now) that person needs to admit it, and have a proper repayment approach put in place.

Its likely that this cannot be hidden with having her do extra work once this accounting period closes.

kayos

JustMary wrote: »

It was her mistake though, assuming where the money had come from.

I don't know.... if the money goes into the account by someone else's error then that is their mistake not the person who received the cash.

If I mistakenly deposit 500 euro into an account via a paper slip but get the account number wrong and pay it into another persons account as a result do you think I would be able to get the cash back?

fasttalkerchat

JustMary wrote: »

It was her mistake though, assuming where the money had come from.

I'd imagine that the person who made the mistake will get into trouble: rather than trying to cover it over (which requires your friend paying it back now) that person needs to admit it, and have a proper repayment approach put in place.

Its likely that this cannot be hidden with having her do extra work once this accounting period closes.

I agree with you that a proper repayment deal should be put in place. But if the employee is only able to repay 10Euro a month the employer may not agree to that.
Since the money was used to pay off student loans the employee offset future costs. The significance of that is that they will not benefit from the money gained accidentally for a few years yet. If it was used to pay off last months credit card it would be fair that the amount should be paid on next months credit card bill.

Bandana boy

kayos wrote: »

I don't know.... if the money goes into the account by someone else's error then that is their mistake not the person who received the cash.

If I mistakenly deposit 500 euro into an account via a paper slip but get the account number wrong and pay it into another persons account as a result do you think I would be able to get the cash back?

yes I would expect you to get the money back
and you would get the money back, by the law if required

Milk & Honey

JustMary wrote: »

It was her mistake though, assuming where the money had come from.

The bigger mistake was paying her the money in the first place. A person would not necessarily check their statement immediately on receiving a payment and could easily attribute a higher than expected balance to another source.

jeckle

MarthaMyDear wrote: »

She is considering taking out another loan to pay the money back is that advisable?

No, that's the last thing she should do.

If an overpayment has been made to her & she doesn't presently have the means to repay it in full, the company should treat it as payment in advance of future work done, until such a time that she gets the other monies that are owed to her from elsewhere, & can repay in full.

If the company were to bring the matter to court & obtain a judgement against her, she would be able to prove that she cannot repay it in full, so the best they would get is a judgement repayment order. She can show that she doesn't have the means, so would probably be ordered to pay small amounts anyway.

She should request a meeting with the company's financial controller or at least the payroll manager in order to sort this matter out, & refuse to deal any further with anyone further down the chain of command, who would more than likely be doing their best to cover up a mistake that was not the fault of your friend. Once the debt has been acknowledged & some sort of repayment agreement has been reached, this should be enough to satisfy the company's accounting procedures.

She should keep a record of all phone calls & what has been said to her & by whom up to this, as the chances are that someone may be acting outside the scope of their particular role within the company. If any more phone calls are received your friend should simply say that she wishes all further correspondence to be in writing & terminate the call there & then.

When meeting with the financial controller she should begin by letting them know the amount of stress that this has caused her, & how anxious she is to come to some sort of realistic mutual agreement regarding the debt being fully repaid.

MarthaMyDear

Thank you for all your replies! She has paid back half the money but is struggling to pay the rest. It honestly wouldn't be worth their while financially to get legal help with this. She has told them she will pay them as much and as often as she can but they are still hassling her to agree on an official payment plan. So far she has just been paying money into their account whenever she can and has not talked to anyone senior however keeps being told that the "boss" needs more updates. Presently it's not a huge sum of money. Just difficult for her to pay it all back in one go.

MarthaMyDear

Sorry I just wanted to ask a quick question about this. Is the company allowed to send out a payment plan and insist that my friend sign it? She has received an email detailing what she has paid back (this wasn't even correct it had left out the last payment). She had told them that she will pay it back as she has it and has so far paid back almost half in the space of less than a month. So is she within her rights to refuse to sign a payment plan and continue making payments as she can afford them? Replies will be very much appreciated as she needs to know asap!

EDIT: this payment plan basically wants all the money back in the next few weeks so she can't afford to follow it but if she continued to pay it back as she had it then it would be fully repaid in about two months or so. As I said previously it's not a very large amount of money, she just doesn't have it all in one go.

Shelflife

Martha as an employer, if i overpaid an employee and they in all honesty used it to clear debts or spent it in such a manner that it couldnt be got easily, then i would quiet simply have to suck it up and accept payment when the employee was able to pay me.

They can send out any letter that they want and insist that you sign it but you are under no obligation to do so.

I would suggest that if they want something signed, then simply write a letter stating that you agree that you owe them x amount and that it is your intention to pay it back as soon as possible and that you would prefer not to be tied down to a payment plan.

At this stage i would go to HR/mgmt and just tell them politely that this situation is not of your making and that you will repay it as soon as YOU can.

Nonoperational

She should stop dealing with any employees down the chain and make sure the senior people in the company know what's going on. It sounds like someone messed up and are pressuring her into paying it back quickly so they won't be caught. She should pay it back but at a rate she can afford.

jimoc

Simple solution, stop dealing with the muppet who made the mistake and is pressuring her so that their mistake doesn't get found out, and talk to the higher ups instead.
They probably know nothing about the whole situation yet!

MarthaMyDear

Thanks for all the replies!!