Customer overpayment

JazzyBird

Hi everyone,

Does anyone know of anything in company law/regulations etc with regards to a supplier having to notify a customer that they have made an overpayment on their account? Or even supplying a customer statement when their account is in credit?

I feel the morality and good business practice arguments will fall on deaf ears, so am seeing if there's something more persuasive like law!

Many thanks! :-)

JazzyBird

blobbyh

When we accidentally transferred funds to the wrong creditor sixteen months ago and only discovered it six months later when the right creditor chased their money, we immediately contacted the company who had our funds. However they continued to hold the funds for another three months before my FD bluntly warned that we would report them under the money laundering regulations. So I'm assuming there is a legal obligation to report an overpayment, and if you have received one, it must be returned when requested.

There's also a similar discussion on accountancyweb;

http://www.accountingweb.co.uk/item/190830

JazzyBird

Thanks for the information Robert.
It's horrible as I know what is the right thing to do, but it's convincing "the powers that be" of this! (Sorry new bosses that I have no reason to trust them on recent history.) I do not trust them not to use the money elsewhere, which looking at the link you sent could be considered theft. I may just bite the bullet and phone the company and tell them what they have done and ask them to request the payment returned in writing (and ask them not to mention that I told them and that they found it as part of an audit!). :-)
It's a very large amount (new car territory) from a customer that we do not have regular business with. They are also a large company (high street name) that I doubt will want to accept other goods to this value - they'll just want their money back.
Many thanks again.
Jazzy.

deanshepherd

Theft Act 1968 is probably a good place to start..!

AK002

It is indeed a Money Laundering issue... (had our annual ML training last week lol!)

Criggers

I have to say, I would be rather embarressed to be working somewhere that would happily "steal" money.

If the law does not convince them, I think I too would consider a behind the back phone call. I wouldn't call of the works phone if I was you though

Poodle

Does your system allow for supplier statements to be printed?

If it does you could send one of these and highlight the amount.

Vonni

I used to work for a contractor who had between £30-£40k of customer overpayments which had built up over a period of time.

Interestingly enough I was responsible for sending out statements to the customers which I did highlighting the overpayment. However if the overpayment wasn't deducted from later payments or a refund requested, I was instructed to transfer it to a 'customer overpayment account' on the balance sheet.

This was against my better nature, but the bosses did not want to return the money unless it was asked for! The accountants were fully aware of the situation which I brought to their attention at each year end providing them with a summary with any movement in the year under review.

Then came a Revenue aspect enquiry - which asked what and how some of the figures on the balance sheet were made up. The Revenue view was that these should be recorded as sales and the relevant CT be paid on the increase in profit; then the VAT man wanted his share. The Accountant argued, the Directors argued and the Revenue eventually won.

When another customer paid £37K in error shortly afterwards the Directors transferred it to their loan accounts and I believe they got away with it. Needless to say this was some 10 years ago before the more stringent money laundering rules came in.

I no longer work for the business we mutally agreed to part company 3 years ago I'm extremely pleased to say - my ethics definitely got in the way!!

deanshepherd

I wish my customers were so generous!

JazzyBird

Vonni wrote: »

I no longer work for the business we mutally agreed to part company 3 years ago I'm extremely pleased to say - my ethics definitely got in the way!!

lol - yes this sounds familiar! Thanks for your post.

Criggers

In case anyone is interested, we've had an overpayment on a supplier account since August 08' (before i was in charge of payments). I was actually going to discuss it with said supplier today when they mentioned it to me....

Our account manager encouraged me to take it back (just create a manual credit note on my side) on the next payment as at year end this year they were going to write off any overpayments on their accounts. I'm not entirely sure how they would do it but it obviously can and still does happen. This is also an account that is still trading, so it's not exactly something that can be "forgot" about.

NO BUSINESS CASE

I work for a law firm where these things happen literally everyday and for varying amounts. We are strictly governed by Solicitors Accounts Rules which are rigidly enforced by the auditors!

As part of the law societys new rules we have to account once a year to our clients showing any client a/c money we hold and I guess just as importantly why we hold it!

Whenever we get an overpayment we send it straight back or use the money as a Less Credit on the next invoice we deliver to the client. Under no circumstances are we allowed to 'keep' the money although I appreciate with law firms that we hold lots of Client a/c monies!

blobbyh

This thread has given me great inspiration for a personal problem I’ve had with a certain bank who I’ve been in dispute with for well over a year. Short story, I believe they’ve 'robbed' me of hundreds of pounds of incorrectly applied interest and fees over the past few years while them being a bank, simply won’t back down.

The amount now left owing isn’t a great figure - £181.03 – but the sheer bloody principle of it has made me reluctant to pay this for over a year until finally it’s now in the hands of their solicitors (also owned by the bank). So my intention is to overpay the debt by just one nominal penny - £181.04 - and by BACS so they’ll automatically receive it. Chances are they’ll simply think I’ve miskeyed the pence amount and write up the extra penny without informing me or keep it on account.

Once I’ve seen the money leave my account, I then intend waiting a couple of weeks before phoning, writing and generally hassling the shlt out of them to return the penny they’ll then owe me. After all, as far as I know and as we’ve already discussed, they’re not legally allowed to keep even a penny they’re not due and must repay it when asked. Returning it will undoubtedly cost them much more than that in time and bank costs which will give me immense satisfaction.

No Business Case, as you work for a law firm, what do you reckon? Is it plausible?

Marga

blobbyh wrote: »

This thread has given me great inspiration for a personal problem I’ve had with a certain bank who I’ve been in dispute with for well over a year. Short story, I believe they’ve 'robbed' me of hundreds of pounds of incorrectly applied interest and fees over the past few years while them being a bank, simply won’t back down.

The amount now left owing isn’t a great figure - £181.03 – but the sheer bloody principle of it has made me reluctant to pay this for over a year until finally it’s now in the hands of their solicitors (also owned by the bank). So my intention is to overpay the debt by just one nominal penny - £181.04 - and by BACS so they’ll automatically receive it. Chances are they’ll simply think I’ve miskeyed the pence amount and write up the extra penny without informing me or keep it on account.

Once I’ve seen the money leave my account, I then intend waiting a couple of weeks before phoning, writing and generally hassling the shlt out of them to return the penny they’ll then owe me. After all, as far as I know and as we’ve already discussed, they’re not legally allowed to keep even a penny they’re not due and must repay it when asked. Returning it will undoubtedly cost them much more than that in time and bank costs which will give me immense satisfaction.

No Business Case, as you work for a law firm, what do you reckon? Is it plausible?

I love that


revenge is better served chilled .....GO FOR IT



On the company side , if we have lets say customer overpaying us we usually contact them to see if they want
A) use the money to cover other invoices
or
we refund the money with a cheque


it however depends on the customers we had one which owed us nearly £300K and they had overpaid an invoice by £20K so until they didnt settle the overdue debt we didnt do anything about the £20K

deanshepherd

Sounds like an adaptation of Jeffrey Archer's first novel..