What is the responsibility to repay a customer fees it has been charging a customer if these fees were not owed?

UPDATED: Oct 1, 2022

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What is the responsibility to repay a customer fees it has been charging a customer if these fees were not owed?

A bank employee noticed recently that
they had been charging account fees for
years that were not owed. They
immediately refunded the maximum
allowed by policy 3 months at the
small branch and instructed us to
contact someone else to have the
remaining amount refunded. Since then
the person contacted offered an
additional amount equal to an
additional 6 months. Also basically
accused us of not paying attention as
if it was our responsibility to make
sure they did not steal from us.

Asked on January 5, 2018 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The law is clear that a mistake does not entitle someone to another's money: if the fee was charged in error, the bank must return it--all of it. Because this is essentially a "contract"-based matter--the bank violating the terms of the service or account agreement--the "statute of limitations" in your state limits you to recovering fees for the last four years; there is no legal ability to recover anything more than four years old. However, if you did sue the bank, you could very likely recover up to 4 years of incorrect fees, so if their offer is unacceptable to you--e.g. it was 2, 3, 4 or more years of improper fees, you could take legal action and seek the balance due you, for up to 4 years worth. Of course, that said, you need to decide if the time, effort, and costs of litigation are worth the amount of money at stake.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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