Bank error in your favor? Your problem

A better course? Keep track of your paychecks, ask about any discrepancies and put any potential overpayments aside.

A poster on the Your Money message board with the name "GoPostal" demonstrated one way to handle overpayments. GoPostal received a "step increase," or raise, to which the postal worker wasn't entitled.

"I told my postmaster about it and asked him to intervene. He just replied that 'they' would catch it and correct it. (Two) pay periods later, it hadn't been corrected, so I went back to him -- same response," GoPostal wrote. "At that point I opened a separate savings account, and every pay period took my pay stub and figured out the difference in the gross between what I was being paid and what I should have been paid, and put the difference into the account."

After three years, the error was finally discovered and GoPostal was sent a bill "for $1,858 & change. I had over $2,300 in the 'pay back' account," GoPostal wrote. "I (filed a grievance) based on a bunch of contractual technicalities, (and because I felt I'd been jerked around for 3 years and decided to drag it out), and we settled on $1,523. I wrote them a check for the full amount in September 2002."

Remember, though, that postal workers are union-represented civil service workers. An at-will employee in a company will have a lot less practical leverage to do much besides quietly pay the money back.

Bank or bill-payment errors

If the stories posted on the Your Money message board are any indicator, it's certainly possible to have a bank account error in your favor that is never caught.

Posters recounted checks for auto insurance premiums, rent and school tuition that were credited in their favor by appropriate companies but which never cleared their accounts.

Of course, most bank and payment errors are quickly fixed by companies' internal balancing procedures. But sometimes mistakes persist.

Poster "dakotarose42" recalled discovering an extra $300 in her checking account at a time when money was tight.

"The bank insisted that a deposit had been made a few days before and I insisted that it hadn't," dakotarose42 wrote. "I spent several days haggling with the bank. . . . Finally, I got one of the managers to agree to investigate, but he said it would take a few days to get the record of the deposit slip from corporate."

Once she examined the slip, she realized that the money belonged to someone with an account number that was two digits different from her own.

"I never, ever even considered using any of that money, as absolutely broke and desperate as I was at the time. It wasn't mine, pure and simple," she wrote. "What floored me was the totally dismissive attitude of the bank. They couldn't have cared less and it took a lot of prodding from me to get them to even investigate it when it was their error in the first place."

Even if you're not willing to go to that much effort to get a mistake fixed, you still shouldn't immediately spend money that winds up in your account in error -- or assume you're out of the woods if a few months go by and the money's not claimed. Although the details vary by state law, banks and other vendors typically have years to pursue you for the erroneous cash.

If it's a payment that hasn't cleared your account, contacting the biller might prevent you from facing late fees or damage to your credit. If it's a bank error, reporting the problem in writing can start a paper trail that can help demonstrate you tried to do the right thing.

• Video: Get the raise you deserve

No one can say exactly when such money is "safe" to spend. The more that's involved, the bigger the incentive the bank or biller has to come after you even if the mistake is discovered years down the line. If it's a small amount and it's been a year or more since you reported it, though, you may not be taking a big risk by spending it.

Or maybe you could just give it to charity. "Finders givers" is probably better for your karma, anyway.

Columns by Liz Pulliam Weston, the Web's most-read personal finance writer and winner of the 2007 Clarion Award for online journalism, appear every Monday and Thursday, exclusively on MSN Money. She also answers reader questions on the Your Money message board.

Published Aug. 27, 2007

< previous |  1 | 2 |