By Quentin Fottrell
“Ask SmartMoney” is a regular feature in SmartMoney magazine where experts answer readers’ personal finance questions. Since the magazine gets more questions than it can tackle, we’re answering some of the consumer-related inquires here on PayDirt. We’re also taking new questions, which you can email to firstname.lastname@example.org.
Q: What are the legal ramifications of not returning money? I picked up a Western Union wire transfer for $150. The cashier in my local grocery stated the amount was $150 and gave me $500 by mistake. I placed the money in an envelope without counting it and put the money in with my other funds. I didn’t notice the extra money until the next day and I have now spent half the money. They have stated that I have to repay by this weekend or they will file a report on me. What kind of report could they file on me? I told them I can repay the $350, but not until my next pay day, which is May 27. Western Union wants it all now. What should I do?
A: Western Union made a mistake, but you made a mistake by not counting the money and a bigger mistake by spending it. You must give it back – and the sooner the better. The good news: it can be rectified and you have shown willingness to do that. You did the right thing. Regardless of what state you live in, Jon Rudnick, a New Jersey-based consumer litigator, says, “You have to give it back now. It’s neither a gift or pursuant to a contract. If you gave you car keys to someone by mistake that doesn’t entitle them to drive away with it and keep it.” Apologize, explain your situation and give them a date when you will return the money. May 27 is only a week away, so try not to worry. If you are losing sleep, send them a check today for $350 and ask them to cash it on May 27 to show that you are serious about repaying the company.
Texas recognizes a civil law claim for restitution of money paid to someone in error, according to Texas-based attorney Aimee Hess. “Therefore, Western Union could file suit in civil court to recover the funds. It is possible that they could recover attorney’s fees and pre-judgment interest on the overpaid amount as well.” In addition, she says Western Union could file a criminal complaint for theft under the Texas Penal Code. “Given the amount involved, it would be a felony,” Hess adds. “Finally, Western Union may be able to file a negative credit report for this debt. The obvious moral here is clear: always return any money paid in error, and do it immediately.” Remember, that’s what could happen. Paying up asap will likely avoid that.
(Western Union was not immediately available for comment.)
Pay Dirt readers, what’s your verdict?