Reader Question: Handling a Bank Error In My Favor?
Reader Kristina from Arizona has a problem. Well, some might not see it as a problem, but here it is:
On December 7, 2007, I had $2,802.00 deposited into my business checking account at Wamu. A chunk of change I must say. I called the bank to ask them about it and said they would put in search and see if there is a match in the system for anyone with missing funds. They told me that it was a counter, CASH deposit made in Georgia. I live in Arizona and have never been to Georgia. The bank said they would call me when they found something.
So a week goes by and I hear nothing. I call the bank again and ask them about it. Still nothing. Then another week goes by. I call the bank a 3rd time and still nothing and tell me they will do another search. I called today and asked them if they could send me a copy of the deposit slip. So they will be sending it out soon.
I really don’t know what I should do. I know the money is not mine, but what if I never caught the deposit in the first place and used that money? Would I get in trouble for using that money that is in MY account?
The bank has made an error. I think the bank should have to fork out the money back to the person who made the deposit and let me keep the money. OK OK maybe that is a little to greedy. But who wouldn’t want some extra money!
It’s been over 2 months and still waiting.
So what I did with the money for now is put it into my IngDirect Savings to earn a little money on it for the time being.
I would love everyones thoughts on this. Please help!
So a bit of ethics, and a bit of legality. My non-lawyer, non-ethicist opinion is this: It was correct to contact them about it, both in terms of ethics and to avoid any future legal hassles. But I would also document that contact somehow, either through a letter, saved e-mail, or signed acknowledgment by a bank employee. Otherwise, I’d probably do what you did. If someone claims it correctly, they can have it, but in the meantime there is nobody to actually give it back to, so I’d keep it.
Any other viewpoints or suggestions for Kristina? Has a similar bank error happened you to you, or perhaps one not in your favor?
February 18th, 2008 at 5:09 am
we had a similar situation with a personal acct at another bank. the bank eventually found the error and took the funds back. but it took 2 or 3 statement cycles, and there was no warning, by phone, email or otherwise. just a reversal one day. i would pretend the money was just not there for at least 6 months so you don’t overdraw. if they still haven’t reversed it by then, it might be safe to assume that you get to keep it. or not.
February 18th, 2008 at 5:35 am
Good point on the potential overdraft situation. I wonder if they even look at your balance before sucking the money back out.
February 18th, 2008 at 5:42 am
The bank can make this reversal at any time and thanks to some nifty maneuvering with the politicians they have not time frame from which they must find the error. I would let that money sit in high interest savings and get it out of my site for at least a year. The worst that could happen that way is you lose a little interest. Just so everyone knows if the bank makes an error that harms you you have sixty days to get some sort of documented response into the bank and make sure you have proof or they will try to rip you off.
February 18th, 2008 at 6:04 am
Simple,
If the money is not yours, you shouldn’t keep it. When the banks figure that out, they will take it back, however long it takes. And when they do take it back, they might not even tell you since it’s not yours. You might have a surprise.
PS: For the sake of the argument, maybe you have a secret admirer in Georgia?
February 18th, 2008 at 6:23 am
I’ve heard of the bank withdrawing twice on accident before, and the people not getting their money back for 10-14 days.
February 18th, 2008 at 6:31 am
Actually after we bought and paid for our house we still had the $90,000 that we used for a deposit sitting in the bank. I remember reading a news story about a guy who got $25,000 mistakenly put into his account who spent the money and eventually got 2 years in jail. That was enough for me- I called the bank, and like this person is testifying you’d be surprised how difficult it is to have a bank admit a mistake and take their money back.
February 18th, 2008 at 6:46 am
I actually had a similar thing happen to my roommate in college. I ended up advising her to call the bank and get all the documentation possible about it. The deposit was for just over $1,500 and it was an ACH deposit from a bill payment system. They had no further details. After about 2 months I ended up getting her to open whatever was the best interest rate online savings account and sticking it in there. Treat it like a balance transfer basically. She had the money for just over 2 years when she told me one day they took it back. They actually gave her a few days to get her account balance over whatever the amount was before they took it back. Turns out she felt guilty about it and would call the bank every few weeks to ask about it. She ended up getting a customer service rep that basically told her “well if you insist the money is not yours. we’ll take it back”. This was the closest the bank ever came to admitting it was a mistake. The whole time they insisted she was just forgetful. A year later we found out it was actually a bank error, the deposit was meant for her sister. But her sister had received the deposit as well. So the bank doubled up deposits.
February 18th, 2008 at 7:02 am
“I think the bank should have to fork out the money back to the person who made the deposit and let me keep the money.”
In what world does that make sense?
saladdin
February 18th, 2008 at 7:04 am
I wonder if it sits in your account for so long if it becomes yours after a certain time passage. Some sort of statue of limitations. If you have maintained contact with the bank and they can’t figure it out you’ve done your part. But I would not spend the money until you know they can’t take it back. Otherwise I’d just ignore it until it disappears.
February 18th, 2008 at 7:07 am
I would think to legally cover yourself you should send a letter to the bank via certified mail describing the situation. Then just leave the money were it is until they come asking for it. I imagine they will let you keep the interest.
February 18th, 2008 at 7:48 am
Who’s to say you weren’t planning on closing your account anyway? If you closed it and moved your money somewhere else, what sort of recourse would the bank have? Would you be on the hook for criminal charges? What if you aren’t a good bookkeeper and didn’t even realize the extra money was there?
February 18th, 2008 at 8:02 am
eventually the money will be traced. Just hold on and enjoy the interest ur getting (if any).
No such thing as free money, unless ur lucky and find $500 cash in an envelope on the road, like I did 15 years ago.
my sis in law kept recieving her salary even though she did not work for the company any longer for 9 whole months. Eventually they caught the mistake and the money vanished overnight. If you read the direct deposit sheet, it says they have a right to put in and withdraw money from your account.
if you do close the account, it is the same as getting an overdraft and abandoning ur account. You will still owe the moolah.
February 18th, 2008 at 8:04 am
“f you closed it and moved your money somewhere else, what sort of recourse would the bank have? Would you be on the hook for criminal charges?”
You would get criminal charges. It is theft.
February 18th, 2008 at 8:09 am
I would hold onto the money until the issue is resolved, but I would close the WaMu account. Otherwise, WaMu could choose to pull this from your accounts without notification. Let them ask for it back.
February 18th, 2008 at 8:14 am
I would be concerned about this being an identity theft. She should monitor her credit carefully.
February 18th, 2008 at 8:15 am
The other side of the ethics calculation is that the money doesn’t belong to the bank, but the person who deposited it; if it’s showing up in your account, it means that somebody in Georgia is short $2,800.
There’s nothing wrong with collecting interest while you’re trying to correct it, but I think the right thing to do is to keep following up with the bank until it’s corrected, and logging your interactions. I’d also recommend sending a couple letters via certified mail, and keeping copies for your records that you made good-faith efforts to rectify the situation.
A few years ago, I was in a similar situation, but for much smaller amounts. I had gotten a couple small electronic deposits (under $100 total) in the span of a couple weeks. After some investigation, It turned out to be payments from my medical savings account after my doctor/dentist visit.
It turns out that they billed the insurance company, who automatically issued a check from my MSA to cover the difference (both are out-of-network), except I never got billed from my doctor and dentist and didn’t need any reimbursement (yet). Since I like both (hence staying with them despite my coverage changing), I brought the discrepancy to their attention and squared it away pretty quickly.
February 18th, 2008 at 8:20 am
If the bank would take the money from your account without warning, wouldn’t putting the “extra” funds in a high-yield account not worth it, since overdraft fees are a lot more than the interest you might make.
Of course if the bank accidentally deposited 1 million in my account, and it took them one or two years to find the owner, you could live rather nicely off the interest..
A bank error happened to me once. I made a $60 dollar deposit, and it didn’t show up in my account for 1 week. Luckily I had saved my deposit slip and asked the bank to fix the error and add the fund into my account. I learned that you have to balance your checkbook every time you make a transaction. Period. Otherwise next time there is a $2800 deposit, it might be out of your account instead of in it.. And you won’t know what hit you..
February 18th, 2008 at 8:24 am
DO NOT TOUCH THE MONEY. The bank will eventually find the mistake and take the money back. If you do not have the money, you will be charged with theft of misappropriated fund most likely at the federal level which could lead to jail time and fines.
February 18th, 2008 at 8:46 am
Legally, I believe you are responsible for notifying the bank of errors in your favor. It is your account so you are responsible for anything that goes into it. If you spend money thinking it’s yours and the bank finds out, they could legally come after you for the money even though it was their mistake. I’m only 99% sure on this.
February 18th, 2008 at 9:05 am
The worst bank error I ever had was most definitely not in my favor. My wife wrote a check for $10,000 from her checking account, that I deposited in my checking account, which I then wrote 5 $2,000 checks on. But then the strangest bank error I’ve ever seen happened - even though the printed deposit slip showed $10,000, the bank recorded the check as $1,000. I always thought those printed slips were automatically generated by the deposit system, but I guess not.
Anyway, 4 of the 5 checks bounced, and I got hit with numerous overdraft charges on the checking account, as well as a “bounced check” charge on the check which was deposited. Luckily, the bank reversed the charges and even credited me with the bounced check charge from the other institution.
But I learned to pay close attention to how things get credited, not to assume anything.
February 18th, 2008 at 9:29 am
I think she has done the right thing. She notified the bank of the error and now she can earn interest on the money while they work this out. I would probably put it somewhere that has a higher APY than ING, but the point is the same.
February 18th, 2008 at 9:39 am
I know this likely one happen, but if you were to take the money and then close the account? One word: Chexsystems.
February 18th, 2008 at 9:40 am
Er, I meant to say “won’t” but my laptop is bein’ weird this morning - you understand!
February 18th, 2008 at 10:09 am
You definitely want to document your attempts to contact them to resolve the situation. Just be prepared for them to take the money back all at once, and without warning. Unless you normally have enough in the account to cover that much being withdrawn at once, I wouldn’t move it to a high interest account. I would leave it in place.
February 18th, 2008 at 10:10 am
A bank error against you, they’ll never bother to track it down. A bank error in your favor?? Only a matter of time. I firmly believe that the banks hire people who’s very LIFE depends on having the numbers come out in the bank’s favor.
If I got something deposited in the account, I’d just ignore it and keep pestering the bank about it. It’s better to be safe than sorry, no matter what the amount.
Short of closing the account, SOMEDAY they will come back and take back the mistake.
February 18th, 2008 at 10:11 am
A friend of mine once had a substantial amount of money deposited in her account. She was told by the bank that the bank has a year to claim any funds they have mistakenly put in your account. and that after that it was hers. Needless to say, they found the error well before the year - but it did take a few months. I wouldn’t make plans for the windfall anytime soon.
February 18th, 2008 at 10:35 am
not to get off topic but here is a tax question for you:
If i withdraw from my Roth IRA early, and only withdraw my contribution (made in 2005), am i subject to taxes or the 10% penalty?
February 18th, 2008 at 10:38 am
Last month WaMu deposited $3000, but immediately took it back out. So it is quite possible they are having some issues… Be careful of putting it in better savings if you can’t cover the amount on withdrawal (or get in writing that overdraft charges would be waved).
February 18th, 2008 at 10:39 am
Hi, this is Ryan from Georgia. Will someone tell Arizona Kristina that the money was a gift?
Just kidding.
I’ve actually been on the other end of this. I intended to pay a friend through intra-bank transfer but ended up paying the wrong person. After calling the bank and apologizing, the money was zapped to the right place immediately.
I’m not so sure how comfortable I’d feel moving the money to another account. Earning interest on that money is problematic, since it’s not your money! I’d rather be ready to empty myself of the money and be impervious to accusation.
What you could do is send “your” money from that account to another high-interest savings account, decreasing an on-hand emergency fund or something like that… : )
@ Ralph: The difference over the course of a year between ING’s rate at 3.4% and a 4% rate on $2800 is only $16. Assuming it takes the bank 3 months to correct the problem, that’s only $4.20–a single meal at McDonalds. Rate chasing is not a cost-effective use of time IMHO. Why not use that time & mental energy learning to cook at home?
; )
February 18th, 2008 at 10:51 am
2 years ago, my retirement account was sitting at 38,000.
the next month I checked on the progress and it had a deposit of $290,000!
Needless to say, I was shocked!
I thought about the money I could make if I bought some stock that was about to declare a dividend and then resell it as soon as I could.
But decided against it
The IRA company decided after 2 phone calls in 2 weeks that it would look at it the issue.
They took the money out 2 hours after I called the 2nd time !!
February 18th, 2008 at 10:57 am
Bank error are most likely human errors on the basic teller level. For example, we often have customer refund checks wrote to us in our customer agents names (instead of our company name). half the time our bank will actually deposit the checks to our company account, and half the time it will refuse to deposit them.
February 18th, 2008 at 11:01 am
That happened to me at TCF once - same story - they wouldn’t admit the problem and insisted I deposited the money. Eventually I believed them (I was in college, had terrible records, etc.) and started using the money.
90 days later, and without warning, they reversed the transaction.
February 18th, 2008 at 11:08 am
It’s a deposit error, and I’m sure somewhere the bank has a paper trail; a forensic accountant should be able to figure out what happened easily. Has anyone had the opposite happen to them - a chunk of money go missing from your account? This type of thing can make you vary of the bank and thankful for the FDIC!
February 18th, 2008 at 11:37 am
What I am interested as well is the tax implications. In case this goes for a longer period, like one year, should you declare that as an income? What if you do not and get checked by IRA? Sounds prity nasty thing.
In my country, banks has a clause in agreement, that I have to notify them in case I see an error on their side. I consider this unfair, why I have to keep track of bank errors, but it is the way thay do it and there is not a lot of that can be done.
February 18th, 2008 at 12:12 pm
To reiterate, the bank will likely find the error eventually. I had a similar thing happen to me for a $7k deposit. One day 7 months later, the bank noticed the error and reversed the deposit. My account actually went negative and triggered overdrafts — not fun.
Unless you want your business’s suppliers to bounce checks off of you and deal with lots of hassle, leave the money in the checking account for at least a year.
February 18th, 2008 at 12:12 pm
Who knows where the money came from?
What if that’s BLACK MONEY.
February 18th, 2008 at 12:23 pm
Hey its me again, I have worked for a couple of financial instituations and in regards to your question there are many possibilities that can occur. First, it could have been a computer glitch in which the computer interpreted the account number incorrectly and deposited in your account. Which mean that someone out there made a BK (business account) deposit and it never posted their account. So they are probably fighting WAMU to get there money back. The Second possiblity is that it was teller error, in which the teller decided to cover up the mistake instead of reporting it, because with job instability lately, he or she did not want to be fired for such a simple error. There are a few more possiblities, but the likelyhood that they happened and were not discovered is near to impossible. One thing backs love is their money and to lose it means someone is going to get canned.
My recommendation is that you keep a running log of you contact with the bank about the matter and keep the money in your account. It is was a glitch or employee error, it will be found eventually and will be corrected even if it is a year from now. They will let you know about their mistake hopefully, but most times will just transfer the money out of your account and into the correct account. Then tell you sorry for the mistake and goodbye. I hope that this been helpful to you even though it is a little hard to understand. Just keep in contact with them and please talk to the right person who can do something about it, such as a district manager.
Important!!!! There is also the possibility of loosing good status with your bank if you recieved money by mistake and take it and run. They will report you and you will have trouble getting an account with another financial institution. This has happened before and will most likely happen again…You mess with a bank and its money, they will mess with you and your life.
Take care and good luck.
Jake
February 18th, 2008 at 12:33 pm
I would have done the same thing… put it in my ING account until it worked itself out. Might as well make a little interest.
February 18th, 2008 at 1:01 pm
I would certainly not assume that if you eventually do not hear anything it is your money. Basically because it is not your money. Ethically, you know it is not yours and you should reasonably understand that it belongs to another whose account has not been credited. So by eventually assuming that it is yours is the same as saying that the person who’s money was lost will assume that it is no longer there’s. Another thing is the constant contact with the bank informing them of their mistake and asking for it to be taken care of is pretty good evidence that you understand that under no circumstances is the money yours.
I dont know but by taking the money out of the account and depositing it into another account seems a lot like conversion to me, and hence a crime. Be careful with the dollar amount, you might have committed a felony. The best course of action to take would be to continue to contact the bank until the problem is taken care of and in the mean time act as though the money is not there.
February 18th, 2008 at 1:13 pm
I think that Jake is right on the money here (pardon the bad pun).
Chances are the deposit was a result of human error, likely an incorrect account number, or possibly a mistake with the MICR encoding at the bottom of the deposit slip - perhaps the account number is correct (and matches yours) and the routing transit number was encoded incorrectly. You see these kinds of mistakes a lot when banks merge or go through an acquisition.
Either way, you should follow the advice of those who said that you need to document your correspondence with the bank (in writing or on a recorded phone line) – and keep the money in the account. If/when the bank corrects the error, it is unlikely that you will get advance notice. One day you’ll just look at your balance and it will be gone.
Oh, and don’t take the money and run – that is theft and the bank could sue for the lost funds (although that’s improbable considering the amount). ChexSystems (and your credit score) is your real concern.
Since it was a cash deposit, the correct owner may not be found – if that’s the case, the bank may let you keep the money – but be sure to get that in writing as well. These things can take up to 60 days to be resolved once they are reported – and it’s possible that Ms/Mr Georgia doesn’t even know that she’s missing money yet.
February 18th, 2008 at 1:20 pm
My sister had ~$2000 in her checking account. She went to the bank one day, and the account had $22000 in it instead. Several phone calls to the bank plus a week or two went by before they figured out that they had deposited 20k in the wrong account…
The bank withdrew the 20k from her account. Twice. So she had -18k, was going out of town the next day, and was getting hit with daily overdraft fees.
It took another WEEK before the bank put the second 20k back in her account and she had a positive balance, and another MONTH before they refunded all the overdraft fees.
February 18th, 2008 at 1:27 pm
Cut them a check. Its their money not yours. Make sure that you save a copy of the check as proof. Go to a local branch and explain what happened.
February 18th, 2008 at 1:42 pm
WaMu has decent interest rates for bank accounts, right? I’d put it in my linked savings (or maybe they just have high-interest checking). Let it get the interest rate while I wait. I wouldn’t go so far as to invest it or put it in a CD. It should be easy to get back to the bank once they realize the error. And I’d save the e-mail/letter/etc.
February 18th, 2008 at 2:20 pm
“If i withdraw from my Roth IRA early, and only withdraw my contribution (made in 2005), am i subject to taxes or the 10% penalty?”
You can withdraw your contributions at any time. Only earnings are subject to distribution regulations.
February 18th, 2008 at 2:27 pm
I used to be a bank manager for a large bank and mistakes like this do happen, but eventually they will take the money back. Like one individual stated- this money belongs to someone.
“The bank has made an error. I think the bank should have to fork out the money back to the person who made the deposit and let me keep the money.” Your statement shows what’s wrong with Americans– you think are somehow entitled to this money when you aren’t.
If you take the money and run the bank will send you to collections. Just because you close your account doesn’t mean you are free and clear. Furthermore, if you take the money and put it in a savings account, if the bank takes the money back and it overdraws your account- generally speaking you wont get much sympathy. You knew the money wasn’t yours, the bank will be able to see that you took roughly that $ amount out of your account and transferred it elsewhere.
The individuals who have suggested writing letters….while its a good idea you need to make sure those letters are getting to the ‘right’ person. Its probably best to go into the bank and talk with a manager and have them research it for you. Once you get the copy of the deposit slip you might be able to tell if the account number was just keyed wrong, and at the very least it should have the correct individual’s name on it.
Bottom line, the money isn’t yours, if someone had your money you would want them to do the right thing too.
February 18th, 2008 at 2:58 pm
So let’s see what we have so far:
1) The bank will likely catch it’s error sooner or later, and they’ll just suck the money back out. So it might be prudent to keep that money in your checking account as opposed to ING Direct.
2) I think one question is, at what point has Kristina done her due diligence? One phone call? Two? One conversation with a bank manager? Conversation + certified letter at her cost? Does she have to travel to Georgia and hand out flyers?
3) Somebody suggested sending the bank a check. Would they even accept this, or is it just inviting more paperwork confusion?
February 18th, 2008 at 4:45 pm
Bank tellers are humans, and humans make mistakes. The teller input the account number incorrectly when doing the deposit. Big banks have people to verify the work, and will catch the errors within 1 or 2 weeks.
I usually keep my deposit/withdrawal receipts and only throw them away I see the transaction is posted online.
If I were Kristina, I would leave the money in her account and wait for the bank to debit the fund. Other people might move the fund elsewhere. I would think the bank will send a letter to them and ask for the fund be returned.
Don’t write a check to the bank because they won’t take it.
February 18th, 2008 at 5:39 pm
I had a 20k+ mistake in my favor on a equity loan. I took some urging to tell them there was an error - banks have a lot of faith in their computers - but they fixed it on the first call. Supposedly, the sales representative told me if I would have paid off and closed the loan or just got a payoff balance in writing, the bank wouldn’t be able to do anything. As many have suggested, I would just let the funds sit there and keep telling them to correct their mistake.
February 18th, 2008 at 6:11 pm
I once noticed an extra $1000 in my checking account. I happend to visit my father that day and mentioned it to him. He tells me the same bank lost his $1000 deposit a couple of days earlier! We take a trip up to the bank and sure enough they deposited his money into my account.
We have the same first/last names but different middle names, addresses and account numbers. Nice to know that the teller occasionally uses the customer’s name instead of the unique account number when processing transactions!
February 18th, 2008 at 7:58 pm
I figure you should take the money, close the account and then run. If the Feds catch up bribe them with some of the money.
On a more serious not I think your arse is covered if you notify them of the error and as far as I’m concerned the bank should take it back immediately and hold in it a fund specifically for lost or unaccounted for funds.
February 18th, 2008 at 8:08 pm
I wrote a blog post about this at http://christianfinance.wordpr.....und-money/
The guy spent $80,000 of money that was accidentally deposited into his account. He was charged with a felony.
February 18th, 2008 at 9:25 pm
Unfortunately, I had a teller two cities away inadvertently make a substantial withdrawal from my account. After sitting in the credit union and talking to managers and account handlers for nearly an hour and a half, they said that they would call me when they figured out what the problem was. Twenty-four hours later, I had my funds back with a post date equivalent to the date the funds were withdrawn (so I wouldn’t lose interest). Much of the error depends on if the person who is missing the funds notices that they are missing. This experience also makes me try out the customer service at a bank before signing up for an account.
February 18th, 2008 at 11:17 pm
HEY! That’s the exact amount I’m missing in my account! Clearly, my teller made an error. If you’d send me a check asap to correct the mistake, I’d appreciate it.
February 19th, 2008 at 12:35 am
I find it amazing that all of your readers are either too honest or too timid and nobody suggested the saying “finders keepers”.
I have never had a large deposit posted to my account but once a bank posted the account opening bonus twice and this was definitely bank’s own money but they did not reverse it ever since it comes out if their promotional budget.
On other occasions have found that banks can sometimes not even trace the source of deposits.
I recently opened a new bank account and requested several other older banks to set up ACH links on the saneday. All of them made two small deposits simply noted as “verify bank”. When I asked the new bank the sender of the deposits they could not tell me anything. I was at a loss to verify my deposits at the older banks since I could not tell which bank made which accounts. The older bank would only allow me two attempts to verify.
February 19th, 2008 at 1:54 am
Give me back my money!
February 19th, 2008 at 3:10 am
not your money, would you like someone else putting your money in a savings account?
February 19th, 2008 at 3:55 am
Having worked in a bank for the past few years and going through the countless trainings to keep my knowledge of regulations up to date, I remembered something. I believe this situation is covered by Regulation E, as it is an error as defined in section 205.11:
(a)(3)(ii): “(a) Definition of error…The term error means:… An incorrect electronic fund transfer to or from the consumer’s account;”
So, considering that this qualifies as an error, we move on to the next section. This is timing, which says:
(b)(1)(i): “Is received by the institution no later than 60 days after the institution sends the periodic statement”
And identifies the customer by name and account number and indicates why she thinks there is a mistake.
If she has done all that, we move on. The bank has 10 days to investigate:
(c)(1): “A financial institution shall investigate promptly and … shall determine whether an error occurred within 10 business days of receiving a notice of error.”
However, the bank CAN take up to 45 days according to (c)(2), but they need to let her know they are working on it. Furthermore they could try to argue that they have 90 days based on (c)(3)(ii)(A), since it was an out-of-state deposit.
So, basically I would go in and talk with your local branch manager, maybe print out the regulation and say you would either like it fixed or their garantee that it won’t be withdrawn. Along with everyone who has posted comments on here, I’ve had friends who both got to keep the money or had it withdrawn without any notice.
So, I guess tread lightly and keep your fingers crossed!!
Text of Reg E here: http://ecfr.gpoaccess.gov/cgi/.....mp;idno=12
February 19th, 2008 at 4:02 am
Once upon at time I had a HSBC credit card and signed up to manage the card online.
After login I noticed there was a checking account link. I clicked on it and found a checking account with approximately $8K, just sitting there. I did not know where this came from. I did not even have a banking account with HSBC. I was so happy that finally there was an error in my favor.
Or, so I thought…
After the initial shock wore off I realized that it was my mothers checking account.
Somehow they had given me full access to her account. The only personal information we had in common was our last name. (We did not have the same address or phone number or anything.) So much for security, ehh?
February 19th, 2008 at 7:34 am
This just happened to a friend of mine. They got a copy of the deposit slip and tracked down the person themselves. The bank could care less. Anyway, after getting the deposit slip she was able to look up the person on the internet and return the money. I’d tread that route carefully - make sure it is the right person. But it’s worth a try.
February 19th, 2008 at 8:45 am
Jonathan,
Take a look at this story, about how Patrick Combs (a motivational speaker and friend) cashed a $95,000 junk mail check.
-Jared
February 19th, 2008 at 8:45 am
http://www.patrickcombs.com/wr.....;page_id=2
February 19th, 2008 at 9:22 am
Reasons why NOT to transfer the money to a high yield account:
If the amount is small, the interest made is likely not to compensate for overdraft fees (which the bank doesn’t necessarily have to refund).
If the amount is big, you’ll want to avoid putting yourself into *big* trouble. Be eager to get rid of that money asap.
Bottom line: it’s not your money!
February 19th, 2008 at 10:15 am
It happened her one time with 5/3 bank. They told a person that the money was theirs and they could find no trace of an error. Fast forward one year, they took the money back without warning and filed criminal charges against the accout holder who had reported the error in the first place!
February 19th, 2008 at 1:41 pm
NEVER try to rectify the problem yourself as you will end up losing twice the money as the bank could care less that you sent a check to the person who deposited the money.
February 19th, 2008 at 3:51 pm
Jesse–Reg E refers to electronic transfers. You would be able to file this type of claim if you had a charge on your debit card or an ACH type transaction that was in error. Not for an over the counter deposit.
February 19th, 2008 at 5:24 pm
I know everyone is saying the bank will eventually notice and reverse the deposit. This is not always the case. I have had this happen to me twice (hundreds of dollars, not thousands though). Once was about 6 years ago, the other was about 2. After several phone calls and one letter to the bank, they assurred me they would make the correction, and never did. I gave up after that. I didn’t have time to keep calling and writing for something that I didn’t cause. So far, the money has remained in my account. I just ended up calling it a blessing!
February 19th, 2008 at 6:03 pm
Leave the money in the account where you found it. Don’t transfer it to your ING account unless you have enough funds in your other accout to cover when the bank takes the money back. I agree with Melvin, don’t try to rectify the problem yourself by moving the money out of your account (i.e. writing a check to the bank, to the depositor, etc.) as some have suggested. Now that you have apprised the bank of the mistake, you cannot feign ignorance about not knowing the money was not yours. If you are trying to find a way in which you can keep the money, think about how you would possibly rationalize this to a Judge. Trying to explain why you should be allowed to keep money that you know is not rightfully yours in the first place is foolish.
You know you should not have that money.
Jonathan asked about due diligence. I think you’ve done your due diligence, the bank will rectify the problem sooner or later and they probably would have discovered the mistake and rectified it in due time anyway with or without your assistance.
February 19th, 2008 at 7:20 pm
I’m going to consider that account the place that all the incorrect fees go to when the bank makes mistakes in THEIR favor. Hey man, I’m down about 40 bucks over the years…you are quite welcome.
February 19th, 2008 at 8:59 pm
I used to write my 1’s European style, with a little hat. They kind of looked like 7’s.
I wrote an old roommate a check for my $17 share of the utilities. He accidentally deposited it as $77 and Wells Fargo took the money. I called my bank (WaMu) and demanded the difference, since I’d clearly written “seventeen” on the check. Wells Fargo let him keep the full amount.
Try as I might, I couldn’t get him to split the $60 with me.
February 19th, 2008 at 10:36 pm
@ Jared :: I just spent two hours reading the Patrick Combs story. Very interesting - thank you! The most astonishing thing is that they charged him $175 to close his account. Does anyone know if a law ever passed about junk mail checks?
February 20th, 2008 at 7:01 am
[…] Handling a Bank Error in my Favor? The best solution is to just pretend that money isn’t there. Hopefully, the bank error put that money into an interest-bearing account, so you can at least recoup that. (@ my money blog) […]
February 20th, 2008 at 8:14 am
If you are going to put it into a high interest account, make sure you have some sort of overdraft protection, like a reserve credit line or something.
February 20th, 2008 at 9:20 am
Sounds like Monopoly, but I had a bank error in my favor a while back in the amount of $7000. I transferred it to my ING high interest because I didn’t realize it wasn’t mine (I had a lot of large commissions coming in and out at the time). About a month later, WITH NO WARNING, my primary bank withdrew the error out of my account and charged me a NSF (non-sufficient funds) Fee. I immediately called to ask what was up, and only after much argument did they credit me the NSF Fee.
They said it was my responsibility to notice the money and that if I had kept the money it was fraud and I could be prosecuted. Sounds like bogus to me, but in the end I made a little bit of interest for a lot of stress. Not worth it if you notice the mistake up front.
February 20th, 2008 at 11:45 am
heres a story you might want to read.
http://www.nydailynews.com/new....._ac-1.html
February 20th, 2008 at 8:18 pm
http://www.msnbc.msn.com/id/23258937/?GT1=10856
February 21st, 2008 at 7:30 am
I’m indicating my age when I say that once my bank credited my 233.00 payroll check into the bank as 23.30. Then they declined to accept my checks for rent, utilities, phone service. I was on Spring Break and so a week went by while my reputation went down the drain.
It took two calls, one to bookkeeping and one to the president of the bank to straighen out the math. It took much longer to get my creditors to get off my case. My landlord made me pay my rent in cash for the rest of my stay in his apartment building.
Bottom line on the ethics, I treat the bank the way I want to be treated. I always give back found money because I darn well want them to give back any of mine that goes missing!!!
February 21st, 2008 at 12:26 pm
Anyone heard of the Benjamin Lovell case in New York? See http://www.huffingtonpost.com/.....87647.html
February 22nd, 2008 at 7:45 am
Many years ago BofA erroneously added around $500 to my account. That was big money back then and definitely not a mistake on my part - I would have noticed big time.
I tried for several months to get them to track down the error. They did nothing. About six months later when I changed jobs and moved I closed my account and opened a new one at a different bank that had some extra benefits for employees of my new employer. When I closed my account I told the teller that $500 of the money in the account was not mine. She insisted there was nothing she could do except pay me the full balance. I expected BofA to contact me eventually at which time I planned to pay back the money. I never heard from BofA again. I never banked with them again either.
February 24th, 2008 at 7:34 am
Jesse’s regulations apply to bank errors NOT in your favor. You have 60 days to notify them, they have 10 days after being notified to fix the error or they MUST send you a letter saying they are still investigating. When the error is in your favor, the bank has all the time in the world to fix the problem, they aren’t bound by the 60/10 rules that we are.
February 25th, 2008 at 2:45 pm
I had my bank made a similar error. I made 2 payments on 2 mortgages for 2 different properties on the same day. They posted the payment, even mailed me a statement, but never took the money out of my checking acct. This happened almost 2 weeks ago and I am still trying to have the take the money out.
February 25th, 2008 at 6:02 pm
send the money to me, i’ll keep it safe for you
March 25th, 2008 at 9:44 pm
I have a friend who is going through a simular problem. Somehow a bank double a deposit that he made for 58K. So far he doesn’t know waht to do. I told him to call the bank. I think he is going to close the account and take the money. Some bank maneger told him that if he closes the account there is nothing that the bank can do. I don’t think that’s true. I think sooner or later he will get in trouble
March 31st, 2008 at 10:08 am
I agree, he will get in trouble, that has happened before.
FYI, bank finally called me, had the guy apologize and took the money, but at one point he said “yeah we should take the money and apply it to yuor accounts today, so that it does not damage your credit record” I WAS LIKE EXCUSE ME? I did my share on time as I always do, so yuo better make sure there are no repercusions to this because of YUOr mistake. He apologized again! lol what do these people think? They mess up and I am supposed to bear the consequences?
He also mentioned that what happened was that they took the money out of someone else’s account. I guess I was on the better side of this situation!
April 8th, 2008 at 12:40 am
Here’s one of a different sort.
My husband and I are separated and getting a divorce. I had our tax refund deposited into our old checking account. The day it posted, I was there to take it out and close the account. 2 weeks later my STBX informed me he was taking it out. I didn’t take him seriously, but since he knew basically what the balance had been (when I had certainly never told him) I called the bank to see what was up.
My withdrawal never posted AND The account had not been closed. I alerted the manager of the situation, and here comes the bank’s second error. He did NOTHING to prevent it. 4 days after that my STBX’s withdrawal posts. Now they are threatening criminal charges against ME for bank fraud! I did everything in MY power to stop it! I almost hope they DO take me to court!
April 11th, 2008 at 8:33 am
Heres one for you. I just did a home refi and they mailed me two settlement checks one to my home and one to my office on the same day both just under 100k. I assume if I deposit both they will either simply take the money back or charge me with fraud. Does anyone know the actual law on this?