What are the legal implications of keeping goods sent in error.

[Frizzy1986]

So I sent a faulty phone for repair with my provider and its been one hell of a mess. A new phone was sent as they couldn't fix the fault, and the new phone didn't work so that was sent back and it all started again. I spent over a week chasing up the error and eventually due to the delay the provider credited my account so I could buy a phone in store as mine was not sorted. I did this and then received a message to say that my phone was repaired and was on its way back to store.
Where do I stand? Can I keep the repaired phone and sell it on or do I have to tell them? I really don't understand all the legal things around it.
I'm also due to receive a cheque for the remaining credit balance after purchasing a phone myself, but the woman on the phone only spoke about the original amount so what do I do if they send a cheque for the full value prior to what I have spent in store?
Morally I'm not sure where I stand (probably more towards telling them) but legally I don't want them to take me to court or have to pay it back after spending the money as I'm not rich so wouldn't be able to afford it.

A few years ago I bought a bed topper. When it arrived it was slightly damaged in one edge. I let them know and they said they would send a new one, which they did .
The driver wouldn't take the damaged one back as he wasn't instructed to.
Even after several calls they didn't collect - so I now have two toppers.

This is different to being sent goods in error and keeping them (which is legally theft)

They have sent you money to purchase a replacement phone which you have done, they have mixed up your repair case, fixed your old phone and said you can collect it.

if you then keep the cash/new phone and go and collect the old phone that will be theft/fraud and they will be legally within their rights to pursue you for the full cost of the phone back.

You are only entitled to one phone, either the repaired original phone or the new phone, choose one and return the other/let them know the mistake, there is no way they won’t notice eventually.

Collect your repaired phone and see what happens. Sometimes they just write this sort of thing off as customer compensation because it's too much hassle for somebody to trace through the elements of the issues to sort out. They may well be happy you have gone away quietly!