Legal Question in Banking Law in California

Direct Deposit Overpayment

What are the terms of my responsibility if I received an overpayment in my account via direct deposit and was not aware of this mistake until I was notified by the paying party 8 months later? I am responsible for paying the entire amount at once or do I have the right to repay in installments without interest considering it was not my mistake and I have already spent the money?


Asked on 5/18/00, 7:58 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: Direct Deposit Overpayment

It was never your money and you had no right to spend it. It came to you as a lump sum and you owe it in a lump sum. You are also liable for interest until it is paid.

This is classic "golden rule" law. If it was your money put into someone else's account, what would you want?

The bank -apparently - made a mistake, but it was an innocent clerical error. You should have reported the extra deposit as soon as you knew about it. Keeping the money which is not yours is potentially a criminal matter.

Read more
Answered on 7/04/00, 9:45 am


Related Questions & Answers

More Banking Law questions and answers in California