My former employer direct deposited funds into my account. I notified them and they told me they would pull the funds back out. A month has passed and the funds are still there. I want to close this account because I've moved to another state and the bank is not where I am now.

What is the best way to resolve this with a miminum amount of hassle?

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    We need to know the country to be able to answer the question. But it also might make more sense in the money stackexchange site. – mhoran_psprep Apr 16 '15 at 3:52
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    How many times have you contacted them? Just once? I would contact them again and inform them of your intention to shut down the account. I certainly would NOT spend the money. – Jane S Apr 16 '15 at 3:59
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    In the UK, it would be six years. So don't spend the money. It's up to them to ask you to return it. – gnasher729 Apr 16 '15 at 7:34
  • It happened to me 3 times in 3 consecutive months. :) I called the finance people for the account number and transferred the money back myself. Corporate finance is usually slow, it is better to find a way to take control. – Mark Apr 16 '15 at 9:39
  • "Is there a certain time frame they have to take their money back?" is essentially a legal question, thus off-topic. I proposed an edit to change this part. – sleske Apr 16 '15 at 9:59

Details, as usual, will depend on local culture and jurisdiction, but in most jurisdictions, there is generally no obligation for you to actively return something (money, parcel, whatever) you received in error - usually it's enough to notify the sender. Actually, it might be a dangerous mistake to return it yourself - what if you send it to the wrong account?

So you probably have done all you had to, and can close your account without further delay. However, until the time specified by Statute of limitations or similar concept in your jurisdiction has passed (usually a few years), the company could ask you to return the money. If they do ask, be prepared to return it - so do not spend it.

My recommendation would be:

  • Ask your bank about the exact local regulations surrounding erroneous money transfers: Does it cause problems for closing the account? What is the statute of limitations for asking back the money? Is there a legally mandated way to notify the sender (or the bank)? The bank will be in the best position to advise you.
  • Notify your employer a final time about the money. Do it in writing, using certified mail or similar (so you have a record), and make sure to send it to the right, official address, ideally the address the company uses in its formal registration, or on official letterhead.

Then lean back and wait :-).

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  • Asking the bank is an excellent suggestion. It can't be the first time this has happened. – HLGEM Apr 16 '15 at 17:27

Disclaimer: I am not a banker nor a lawyer.

I am unaware of the exact term in English, there is a process where you can ask for a reversal of a payment if it was made in error and your former employer should have made use of this. After a month though, I'm fairly sure the period of eligibility for this reversal has passed.

As far as I am aware there is no point in time where it becomes ok for you to take this money. If you wish to close the account I would advise contacting the company and obtaining their payment details so you can transfer them the money and subsequently close the account.

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  • This is both the legally prudent and morally correct thing to do. – NotMe Apr 16 '15 at 14:20

I am not sure about your country but I think each country must be having some fixed time frame for reversal of the transaction (Which must be less than a month), please inquire if that time limit has passed or not ? If it hasn't best will be to wait for some more time before informing them.

Once the reversal time limit has passed no one (Except government agencies with court orders) can withdraw money from your bank account without your written consent even if they have deposited it themselves. World would have been a strange place if this restriction was not there.

Since you want to close the account you can approach your previous boss (or executive from HR/Account department) and tell them your intention. After that either you can transfer money online to their account or give them a cheque which they can deposit in their account. This way things will end faster and you will be freed from this extra account.

If above process takes time another solution will be to transfer the money to your another (permanent) account and give them a cheque from this account. Here also you can use online transfers or by sending them a cheque through courier.

Whichever mode you choose to pay the money back make sure you have some documented proof that may be helpful in future.

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  • In the United States a transfer can be reversed with a window of 5 business days. They can do this without having to ask you. – mhoran_psprep Apr 16 '15 at 10:16
  • @mhoran_psprep Did I say anything against it ? OP didn't specified country ? and even if their is 5 days window now since a month has passed already how does that additional information (5 days limit) changes the situation ?? – Amit Apr 16 '15 at 10:24
  • Just saying: If you put a cheque into your account, and the cheque turns out to be stolen, the bank can and will take away your money after a very, very long time. Usually happens as part of a scam where someone overpays you with a cheque and asks for the difference back in cash. – gnasher729 Apr 16 '15 at 20:56
  • In that case I think it must be proved in court that cheque was indeed a stolen one and than court can either direct banks to deposit the money back OR court will put a fine on the person indirectly. Where later is more likely and more the delay and severity of the case more the decision will tend to the first option. – Amit Apr 17 '15 at 3:22
  • If the bank determines it is stolen (because the person from whose account the money comes complains), that's it. The bank takes the money. No court needed. That's what will happen at least in the USA and the UK. – gnasher729 Apr 19 '15 at 23:07

There are some good answers in general, and I have a slightly different solution, which won't fit as a comment to one of the other answers.

  1. If there is a period after which the money becomes yours, it's probably years away. Don't spend the money until you've found out what it is, and waited that long, and made lots of attempts to return the money.
  2. While I understand your desire to close the account, it seems the account isn't hurting you if you just leave the amount in it. You should be able to convert it to either a no-fee account, or one which charges fees only when you use it (which you won't do). Leave the exact amount of the mistaken payment in it, plus a few dollars to cover charges that might occur. (I know some people have advised an escrow account, but that seems too formal and complex for this situation. As long as you have the money available to pay the company when they finally get around to asking for it you should be fine).
  3. Make a few more attempts to get in touch with the company by normal means. If those produce nothing (or you don't feel like doing that) move to step 4...
  4. Write them a cheque for the amount. Send it by registered mail, with a letter explaining in detail what happened. You might well be within your rights to reduce the amount by whatever it cost you to write the cheque. Make sure the account has enough in it to pay the amount and any fees for the cheque. Not only will this discharge your responsibility to have paid the money back, but it will also get the attention of the company. Accountants really dislike having cheques they don't know what to do with, and it will get more attention than a letter. (If you really wanted to close the original account, do so and write the cheque on a different account. Just be absolutely sure you keep enough funds in it to cover the cheque until it could no longer be cashed.)
  5. Get on with your life. By this point you can reasonably claim you have done everything you can to return the money. The account can sit there doing nothing indefinitely doing nothing, and when you happen to notice the cheque is cashed, close the account. If for some weird reason the cheque is not cashed before it would be invalid (six months? a year?) and if/when your friendly lawyer advises it to be OK, spend the money.

I am of course not a lawyer and this is not legal advice.

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FYI - I'm not a lawyer

I would not try to reverse the transfer. You need to create a paper trail as to what happened to this money and why. Be sure to document whatever you do.

Reach out again

Reach out to the company again and see if you can transfer the money back to their account. A wire transfer is $20 (usually), be sure to negotiate the company covering this, and every other fee.

If you cannot reach them

You could probably move the money to an escrow account at your new bank. The new bank will likely be able to advise you on the best way do this. You should probably also send a letter via certified mail (to ensure they received it) informing them you've done this and how to get in touch with you.

By putting the money in an escrow account, you've proven that you haven't used it, and if the company wants it back its very obvious who's money it is. Sending the certified mail (someone must sign for it), will also create a paper trail that will help you if things get ugly.

Finally don't spend it

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Have you tried contacting them via phone or e-mail to follow up? If not, definitely do that first.

If no response, you can keep this simple: Close your old account, write a personal check from your new one, and send the check with an explanatory note via Certified Mail. That will get you proof that it was delivered successfully (or not).

Leave the money in your account for 180 days. Your check should be void after that and cannot be cashed (check with your bank on this) and if it's still unclaimed they will need to contact you to request payment.

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