Santander is seeking to recover £130m after inadvertently paying cash to tens of thousands of his clients on Christmas Day.
About 75,000 people and businesses created to accept one-time or regular payments from 2,000 companies with Santander accounts received improper payments on two occasions, with the second payment coming directly from the bank’s own reserves.
Spanish-owned banks will find it difficult to get their money back because it has been sent to recipients belonging to a litany of other banks such as Barclays, HSBC and NatWest.
Although the windfall was Santander’s fault, it is illegal for clients to keep money that was wrongfully credited, and if they do, they face charges of ‘undue credit holding’ under the Credit Act. 1968 theft.
But while the banks were able to recover money that had been improperly paid to their clients’ accounts, they were concerned that some had spent it.
Approximately 75,000 individuals and businesses who have been set up to receive one-time or regular payments from 2,000 companies with Santander accounts received the wrong payment twice
Banks will have a hard time getting your money back because it has been sent to recipients belonging to a litany of other banks such as Barclays, HSBC and NatWest.
Are you allowed to keep money given to you by mistake?
It is illegal to knowingly deposit money that is deposited into your bank account by mistake.
If you refuse to return the money, you will be charged a ‘holding credit’ fee under the Theft Act of 1968.
You can also go to jail if you spend the money when you know it’s not yours. Under the Theft Act of 1968, the maximum sentence is ten years in prison.
For example, a Blackburn woman was sentenced to 10 months in prison after spending large sums of money, after mistakenly receiving £135,000 from Abbey Bank.
The only exception to this rule is if you have good reason to believe the money is your debt.
For example, a part-time bank worker who was paid more than £7,500 a year for three years won a court case to defend his unexpected income. The court ruled in his favor after he successfully argued that he considered the increase to be a pay increase promised by his employer.
There are also loopholes for being paid more money incorrectly. If you put the extra money into a separate savings account and let it add up to maturity, you may get free cash.
Water fountain: money.co.uk
Someone said he didn’t want to get his money back from the customer if it forced him to do an overdraft.
Pay UK, which runs Britain’s main payment system, is discussing the matter with Santander as the bank is desperately trying to get the money back.
Banks have used ‘bank error recovery’ to go to various banks or directly to the recipient of the cash to get it back.
A Santander spokesperson said Time: ‘We apologize for technical issues, some payments from our corporate clients were incorrectly duplicated in the recipient’s account
“As a result, none of our clients are out of pocket and we are taking steps to recover duplicate transactions according to industrial processes.”
The spokesperson added: ‘Duplicate payments were the result of a scheduling issue, which we quickly identified and fixed. The recipient and purpose of payment will vary between clients, but may include salaries or payments to suppliers.’
Santander, which has 14 million clients, was in trouble earlier this year in May when it was forced to apologize after technical issues left some of its clients unable to make payments for nearly a Saturday.
And in August last year, thousands of customers were unable to access their accounts online.