Dishonestly retaining a wrongful credit

27 November 2019

Not reviewed after the date of publication

Question:

In relation to the offence of dishonestly retaining a wrongful credit, under section 24A of the Theft Act 1968, is this offence committed if a person puts £500 into another person's account by mistake, and the person decides to keep the money?

Answer:

Section 24A of the Theft Act 1968 outlines the offence of dishonestly retaining a wrongful credit.

(1) A person is guilty of an offence if -

(a) a wrongful credit has been made to an account kept by him or in respect of which he has any right or interest;
(b) he knows or believes that the credit is wrongful; and
(c) he dishonestly fails to take such steps as are reasonable in the circumstances to secure that the credit is cancelled.

However, for this offence to be made out the credit to the account must be a 'wrongful' one. 'Wrongful' is defined in section 24A(2A) as money derived from -

(a) theft;
(b) blackmail;
(c) fraud (contrary to section 1 of the Fraud Act 2006); or
(d) stolen goods.

From the facts you have outlined this offence is unlikely to have occurred unless the credit is in fact deemed 'wrongful'.

Nonetheless, if the money has been spent by the person an offence of theft could be made out, since this could be seen as 'dishonest appropriation' of the money. Under section 1(1) of the Theft Act 1968 a person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it.

Appropriation is defined in section 3(1) as:

'Any assumption by a person of the rights of an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping or dealing with it as owner.'

Since the person has spent the money (assuming rights of the owner) and has knowledge that the money is not rightfully theirs, this is likely to be regarded as dishonest for the offence. Dishonest is not specifically defined in the Act however section 2 provides circumstances which are not regarded as such. A jury must determine what is dishonest according to the ordinary standards of reasonable and honest people; see the test in R v Ghosh 1982 (as amended by the case of Ivey v Genting Casinos (UK) Ltd (trading as Crockfords) 2017).

We have been able to locate media reports for offences very similar to the circumstances you mention but unfortunately we are unable to locate any case law for such. For your information please see the following link to a Telegraph article, confirming a man was found guilty of theft after spending part of the money which he was aware was transferred to him in error.

https://www.telegraph.co.uk/news/2017/10/10/man-jailed-theft-766k-accidentally-transferred-bank-account/

Any conviction however will ultimately be a decision for the courts.

On the other hand if the money is sitting in their account unused for example, a criminal offence is unlikely to have occurred. Credits which are mistakenly made are mostly dealt with by the banks and as a civil matter (if required).

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