The bank error which saw a Rotorua couple flee the country with $10 million after applying for a $10,000 overdraft, has left many Kiwis wondering what their rights are if extra money were to turn up in their own bank account.
A law which was passed in 1760 states that if you have someone else’s money when you are not meant to – whether it is stolen deliberately or a total accident – it is theft, and by law you must return it.
No matter how hard you search through the literature, the chances of arguing to keep an accidental windfall are slim – and you cannot forget the fringe benefits either.
“The interest equally would not be something that the person is entitled to anymore than the principal amount,” says banking law specialist Ross Pennington.
There are only two possible exceptions – if you did not realise you had the money and spent it on something that might be life-changing if you had to pay it back.
“I don't mean by that just buying a flat screen TV that perhaps you wouldn't have bought, or going on a holiday to Fiji,” says Mr Pennington.
“It’s something like investing in a disastrous venture then, maybe, you might not have to give it back. But it is a very narrow exception.”
Also narrow is the other exception - that you did not know who the money came from. That might work if you were to find money on the street.
Mr Pennington says it is not easy to shift money offshore in a hurry either.
“The anti-money laundering laws would normally make this sort of thing difficult unless you had some really serious expertise in moving money around the world,” says Mr Pennington.
“I'm a banking lawyer and I personally wouldn't know anyway to do that.”
The theft law around receiving money by accident does not just apply to banks, it applies to all sorts of situations - perhaps you are overpaid by your employer, or someone on Trade Me deposits the wrong amount in your account. It even applies to being given a little too much change at your local coffee shop.
If the value of stolen property is more than $1,000, you could be sentenced for up to seven years in prison.
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