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Young Terrified Student

Overpaid by previous employer- can i be sued?

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okay so my previous employer has overpaid me by what amounts to be around £400. i did not realise this however, i received a letter in the post a few days ago, (although my employment terminated from this company on August 10th 2012). The company did not pay me when i was suppose to get paid and so my pay was backdated into one lump some, so you can imagine why i was not suspicious of the overpayment. The entire some of money has indeed been spent (in good faith), and I simply cannot afford the repayment. The letter demands an immediate repayment of the full some of money. However, I am a student with no money! what should my next course of action be?


Someone please help...

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Several things to consider.


Yes, you can be sued (in the County Court) to recover the money, but you could also enter a defence of a 'change of position' were that to happen. It might be successful, but that would depend on how likely it was that you couldn't possibly have known that you weren't entitled to the money. If you were earning significant amounts, or were due a bonus for example, then it would be more likely that £400 was an amount that was in line with what you could expect to have received. If though, your normal wage was only £100 and you weren't owed any bonus, or perhaps holiday pay, then might be reasonable for a court to consider that you should have known that you had been paid too much and have taken steps to query whether the payment was correct - the standpoint being that most people would know roughly what they were owed when leaving a job and therefore there can be a reasonable belief of entitlement.


If you feel that the employer is serious about taking legal action to recover the amount, and if you don't believe that you can mount a credible defence, then you would be perfectly entitled to try and agree a repayment plan which fits your current circumstances. You should also of course also make sure that what they are claiming is correct, so make sure that you get a proper breakdown of the figures. You could of course try to bluff it before it gets to the stage where they lodge a CC claim by disputing liability on the basis that it was their mistake, that you had a reasonable belief that the money was yours, and have spent it (changed your position) on that basis. This might just put them on notice that you will have a viable defence in court and they might just consider it too much of a risk to take the court route due to the cost of recovery and the possibility of failing in court and risking costs.


Your call really - depending on all of the circumstances.


Thread moved to the Employment forum

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Another thing you might want to look at is if you were on the right tax code or maybe on the basic rate (BR), in which case you could be due a rebate which could help cover the overpayment.


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Make sure that you read up on estoppel.

From what you have said, you don't have anything to worry about

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there is good advice on here already.


Caro's idea above is really neat (you may be owed a tax rebate anyway, having only worked part of the tax year). indeed, as per Sidewinder, if your ex-employer got their sums wrong once they may have got them wrong again - it can't hurt to ask them for a breakdown of their calculations.


I can offer an actual example of a repayment plan: -


At my last job one of the manual workers was overpaid by £3k for a week (they paid him 616 hours overtime for working a bank holiday rather than 16 hours). They realised their error some months later, got the (terrified) guy in (he had spent it!) and agreed a repayment plan of £5 a week. The outstanding amount was recovered when the chap took a large redundancy payment about a year later.


£400 is a lot to find when you are skint. But the solution can be quite manageable.


It might be worth contacting your ex-employer and explaining your present circumstances - you never know they may even write off the debt.


Casting my mind back to my (distant) student past - if all else fails there was always mum and nan to run too. Maybe there is a relative or friend that can help you.


Good luck, let us know how you get on.

Edited by SweetLorraine

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