What is the ethics of giving back money that doesn’t belong to you?


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(THE CONVERSATION) In Monopoly, a player draws the card that says “BANK MISTAKE IN YOUR FAVOR. COLLECT $ 200 ”to keep the money.

But what happens when such an error occurs in real life?

Kelyn Spadoni, a 911 dispatcher, recently received slightly more than the US $ 80 she expected when financial brokerage firm Charles Schwab mistakenly transferred more than $ 1.2 million to her account, apparently to cause of a software problem. When she discovered the extra money, she quickly transferred those funds to her other accounts and bought a new car and house, among other purchases.

You might wonder if it was unethical for her to keep the money instead of trying to return it. As an academic who studies the ethics of debt and finance, I think the answer is more complex than a simple “yes” or “no”.

Yes we should give back the money

Let’s take another example: suppose you find a wallet full of cash on the floor. Usually, the right thing to do would be to contact the owner of the wallet and return it, cash included.

This is because people have a prima facie obligation to return the property of others. Prima facie is a legal term, originating from Latin, which refers to something that we consider correct until proven guilty. A prima facie moral obligation is one that people normally have, unless there are special circumstances.

The Greek philosopher Aristotle helped explain why people normally have a moral obligation to return the property of others. Being honest and treating others fairly are essential virtues in life, he argued. A good person acts with integrity and with a sense of justice rather than being deceitful and greedy.

Spadoni not only spent much of the money she received in error, but she refused to respond when Charles Schwab contacted her. For an entire month, she ignored calls, emails and texts the company sent her. She has since been arrested for fraud and theft, apparently for trying to keep what was not hers.

Other questions to consider

While it would be tempting to keep money that doesn’t belong to you, to do so is morally wrong when dishonest and greedy. However, things are not always so straightforward.

This is because prima facie moral obligations depend on particular details of situations. Imagine, for example, seeing a billionaire drop $ 10 on the floor. It would still be commendable to return this money, but the moral obligation to do so is lower than in other cases.

Likewise, it should be noted that in the case of Spadoni, she received money due to an error made by a large financial institution. Moral obligations to individuals do not always translate at the institutional level, especially when an institution itself does not treat people with integrity and fairness.

Since 2012 alone, the Consumer Financial Protection Bureau has secured more than $ 12.9 billion in aid for people whose rights have been violated by financial companies. It would be unfair to compel an individual to adhere to moral standards that the finance company itself regularly violates.

Prima facie moral obligations may also be offset by other obligations. Imagine, for example, that the person who found the money wallet needed money to house or care for their children. Alternatively, imagine that the owner of the wallet was a notorious criminal who would use the returned money to hurt others.

These scenarios identify additional prima facie moral obligations to care for those in need and to avoid harming others. Doing what’s right in real life requires weighing all the relevant moral considerations.

The case of debt payments

This is important because, although Spadoni’s case may seem unique, it is in fact common to receive money that belongs to others.

Credit cards, mortgages, student loans, and payday loans, for example, are all forms of credit in which the borrower temporarily receives money that is not theirs.

The moral considerations people face when trying to pay off debts reflect questions about what to do with money that is mistakenly found or received.

Prima facie, the moral obligation to pay these debts is evident when one considers a loan as some kind of rental agreement. The borrower can use the money for a while, but should return it later, with the agreed fee or interest.

However, other moral considerations are also relevant. Personal debt levels are now at an all-time high in the United States, with more than 40% of adults having a credit card balance each month.

In a debt-saturated economy, with more than half of adults living paycheck to paycheck, people may end up having to choose between paying off debts and getting medical care or paying rent.

A small number of them can get relief by filing for bankruptcy. Bankruptcy protections are meant to help those whose debts interfere with access to important goods and services like food, shelter, education, and medical care. The idea is that debt should not deprive people of the ability to support themselves and their families.

However, a 2005 law made it more difficult and costly to file for bankruptcy, especially for those who are already behind on their bills. Many of the people who would benefit from declaring bankruptcy cannot do so because they cannot afford the legal fees.

In addition, some of these debts result from predatory or outright fraudulent lending and collection practices.

Wells Fargo, for example, was fined $ 3 billion in 2018 for fraudulently signing people into charge credit accounts. And payday lenders operate by targeting people who are already struggling to make ends meet and signing them for loans they may not be able to repay on time. When borrowers miss a payment, they incur higher interest rates and fees, putting them in more debt.

These examples indicate just a few of the ways in which the obligation to return money to others is really a prima facie case and therefore ultimately subject to real-world limits.

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This article is republished from The Conversation under a Creative Commons license. Read the original article here: https://theconversation.com/what-are-the-ethics-of-giving-back-money-that-doesnt-belong-to-you-159497.

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