Yes, keeping lost property you found can be theft under California law if you know, or have a way to find out, who owns it and you keep it without first making a reasonable effort to find the owner and return it. Money credited to your account by someone else’s mistake is less settled: the found-property statute does not address it, but California civil law requires you to give it back once you know of the mistake.

The rule for property you find

Penal Code section 485 makes it theft to find lost property “under circumstances which give him knowledge of or means of inquiry as to the true owner” and then to appropriate it to your own use, or to someone else’s, without first making reasonable and just efforts to find the owner and restore it. Beyond keeping the item, two conditions both have to be present: you had a real way to identify or locate the owner, such as an ID in a wallet or contact details on a phone’s lock screen, and you did not make a genuine effort to find that owner before deciding to keep the item. Section 485 does not demand instant action. It asks whether you made reasonable and just efforts before keeping the property.

What counts as a reasonable effort

The civil finder statutes describe what that effort looks like. Under Civil Code section 2080, you generally are not required to pick up a lost item, but once you take charge of it you hold it for the owner, and you must “within a reasonable time, inform the owner, if known, and make restitution without compensation,” apart from a reasonable charge for taking care of it. If the owner is unknown or has not claimed property worth $100 or more, Civil Code section 2080.1 requires the finder to turn it over within a reasonable time to the city police department, or to the sheriff if it was found outside city limits, and to sign an affidavit stating when and where it was found and describing it. Section 485 does not list specific steps, so following these civil rules is the clearest way to show the kind of effort it describes.

Money that was not found, but was not yours either

Section 485 is written for lost property that someone finds. It does not mention money credited to your bank account or payment app through a bank error, a stranger’s misdirected transfer, or an employer’s overpayment. California’s general theft statute, Penal Code section 484, covers several other ways of taking property that belongs to someone else, but neither it nor any other source cited on this page decides whether keeping a mistaken credit is a crime. Treat that question as open, not as permission to keep the money.

The civil rule is clearer. Civil Code section 1712 requires a person who obtains something without the owner’s consent, or by a consent later rescinded, to restore it unless they have a better title to it. Under Civil Code section 1713, that restoration must be made without waiting for a demand, except that when something was obtained by mutual mistake, the person who received it is not bound to return it until they have notice of the mistake. Once you know a payment was not meant for you, the civil duty to return it applies.

When a good-faith belief is a defense

Under CALCRIM No. 1800, an actual belief that you have a right to the money or property is a defense to theft even if the belief is mistaken or unreasonable. The claim-of-right instruction, CALCRIM No. 1863, sets the limits: jurors may conclude a belief was not held in good faith if you were aware of facts that made it completely unreasonable, and the instruction can tell them the defense does not apply if you tried to conceal the taking. Knowing that a payment was sent by mistake is exactly the kind of fact that undercuts this defense. The full defense is covered on lack of intent and claim of right defense.

What to do if this applies to you

  • Do not spend, transfer, or hide money or property you know is not yours.
  • Try to identify the owner or sender from whatever came with the item or the payment, such as a name, a memo line, or a return address.
  • For a suspected deposit or transfer error, contact your bank or the payment platform and return the money through them rather than by a separate payment, so the correction is documented.
  • For found property worth $100 or more whose owner you cannot reach, contact local police or the sheriff.
  • Keep a written record of when you noticed the mistake and what you did about it.
  • If you already spent the money or no longer have the item, talk to a lawyer before you give a statement to police or an investigator.

A short delay while you work out who the owner is does not by itself make you a thief, but ignoring a mistake you know about is a real risk. For a review of your specific situation, contact Law Offices of David S. Chesley at (800) 755-5174.