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?

Comments

  1. 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.

  2. Good point on the potential overdraft situation. I wonder if they even look at your balance before sucking the money back out.

  3. 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.

  4. 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?

  5. I’ve heard of the bank withdrawing twice on accident before, and the people not getting their money back for 10-14 days.

  6. 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.

  7. 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.

  8. “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

    • robert smith says:

      the not yours and never was ,earning money off of someone elses mistake iswrong, so keep it your account until the bank realizesthe midyake lor the statute of limitations fo bank fraud is over, salddin thats a good reply funny too.

  9. 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.

  10. 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?

  11. 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.

  12. Moneyandpf says:

    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.

  13. “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.

  14. 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.

  15. Ted Valentine says:

    I would be concerned about this being an identity theft. She should monitor her credit carefully.

  16. Independent George says:

    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.

  17. 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..

  18. 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.

  19. 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.

  20. 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.

  21. 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.

  22. I know this likely one happen, but if you were to take the money and then close the account? One word: Chexsystems.

  23. Er, I meant to say “won’t” but my laptop is bein’ weird this morning – you understand! :)

  24. 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.

  25. 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.

  26. 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?

  27. 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).

  28. 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?
    ; )

  29. 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 !!

  30. 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.

  31. 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.

  32. Randall at CreditWithdrawal says:

    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.

  33. 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.

  34. Rich Money Million says:

    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!

  35. 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.

  36. Who knows where the money came from?

    What if that’s BLACK MONEY.

  37. 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

  38. 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.

  39. 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.

  40. 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.

  41. thehungrydollar.com says:

    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.

  42. 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.

  43. 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.

  44. “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.

  45. 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.

  46. 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?

  47. 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.

  48. 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.

  49. 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!

  50. I wrote a blog post about this at http://christianfinance.wordpress.com/2007/04/30/quick-tip-dont-spend-found-money/

    The guy spent $80,000 of money that was accidentally deposited into his account. He was charged with a felony.

  51. 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.

  52. 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.

  53. 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. ;-)

  54. 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.

  55. Give me back my money!

  56. nicolas wilson says:

    not your money, would you like someone else putting your money in a savings account?

  57. 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/t/text/text-idx?c=ecfr&sid=b37640798897c8fb285ea997643640de&rgn=div8&view=text&node=12:2.0.1.1.5.0.3.11&idno=12

  58. 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?

  59. 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.

  60. Jonathan,

    Take a look at this story, about how Patrick Combs (a motivational speaker and friend) cashed a $95,000 junk mail check.

    -Jared

  61. 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!

  62. ParatrooperJJ says:

    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!

  63. 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.

  64. 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.

  65. 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!

  66. 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.

  67. Vince Powell says:

    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.

  68. 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.

  69. @ 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?

  70. 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.

  71. 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.

  72. 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!!!

  73. Anyone heard of the Benjamin Lovell case in New York? See http://www.huffingtonpost.com/2008/02/20/nyc-bank-lets-wrong-man-w_n_87647.html

  74. 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.

  75. 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.

  76. 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.

  77. send the money to me, i’ll keep it safe for you :)

  78. Doug Harrison says:

    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

  79. 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!

  80. 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!

  81. 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?

  82. L. Jackson says:

    The law is ALWAYS going to protect the banks. Look at the recent “bailout” package, whih is nothing more than rich criminals using your tax dollars to pad their pockets, now that they’ve lost your retirment for you by investing in bad loans.

    I mean, GM and Ford are BEGGING Unce Sam to bail them out $25 Bil., yet the banks received $700+ Bil. for nothing more than mishandling money.

    TO THE ORIGINAL POSTER:

    Keep the $ in the same account, and watch it for 18 months. If they don’t catch it in 18 months, they probably won’t. This gives them 6 quarters of researching to catch what you’ve already pointed out to them.

    I once got a free computer from Best Buy because they made an error when I bought it on a 6-month-same-as-cash promo. I never got a bill! That was in 2003.

    LJ

  83. L. Jackson says:

    One more note:

    I do agree that re-depositing it into a high-interest account will NOT look good should they catch the error. Keep it where it is, and keep record of the calls you made, as well as the fact that you have not touched the money.

    If you gave them more than 1 call, and they still have not caught it, that is certainly not due to a lack of communication on your part.

    As far as ethics, at what point does it become “unethical” to YOU for you to have to keep contacting them?

    You called and pointed the issue out, and were even told you would hear back from them. THis means they have record of the error.

    If they STILL don’t catch it, tough crap for them, IMO. If I were a juror, and you had proof of the fact you attmepted to rectify this, I would find in your favor as far as no criminal charges, but the bank’s favor as far as their right to recoup the EXACT amount, and not a penny more.

    I would personally not even have called them. I am one of the “dishonest Americans” mentioned above, who feels I am “entitled” to an error in my favor once in a while.

    It’s perfectly fine for banks to squander my 401K to the tune of $50,000, but I am supposed to feel guilty about a $1500 error? Yeah.

    I think I hear the world’s smallest violin playing jusssst for the bankers…hmmm-mrmmm-hmmm-mrmmm-hmmm-hmmm.

    LJ

  84. Detroit0505 says:

    My situation:

    I was depositing an $800 check in one of those new ATMs where you can put cash and checks in and they go through right away, but as the machine went to pull the check in, the whole ATM crashed. My debit card and $800 check STUCK in the machine…

    I called right away to have them file a claim. They put the $800 in the next day as an adjustment claim or whatever….

    3 weeks later….they put ANOTHER $800 in. As a different claim #….

    Suggestions on what I should do?

  85. In my opinion, I think they have 60 days to figure it out, just like we do if the bank makes err in their favor. Obviously document the error, contact them so you have a leg to stand on.

  86. This is such a fascinating topic. And it bears out since so many responses are forthcoming. I’m very much in favor of the ethic of being vigilant about reporting discrepancies in your favor or not to you bank. It is the only right thing to do. Nor are you entitled to interest on money that isn’t yours. That said, while we are being ethical and vigilant and prompt, I struggle to see from many of the comments here how banks are keeping to those same standards. With ethics, they seem to be, they faithfully correct the errors with all the details as they find them. But sometimes the promptness seems to be lacking. Having what I would most generously call a customer service error. There seems to be the message. “Oh by the way, we screwed up your finances for the last 2 weeks-2 months. Thanks for banking with us!”

  87. I’m having the same problem. I just received a check from my credit card company for 500 bucks. I called and they said that I overpaid on my bill and they were just sending me the refund. I told them I never overpaid anything and they argued with me. That was that. So now I just have this check. My plan is to either call again and insist it’s not mine and see what they say, or to just write “void” on it and save it in case they come looking. I’d love to keep it, but I don’t have that kind of luck.

  88. someone i know made a large purchase around 2k, the money was taken out. a week later that transaction was deleted and the money put into account, like nothing happened. in effect the statement is actually “correct”. i t was a debit card transaction. any suggestions/comments? finders keeper rule applies ;O)

  89. What would you do if your stock broker put 4 million into your account, which happened to me yesterday?

  90. Okay, so i just pulled up my bank statement and i notice my bank balance was nearly double what i expected. In looking at the history i see a cash deposit for $2600 on Thursday. then Friday (yesterday) ANOTHER cash deposit for the exact same amount. now i expected the Thursday deposit. i took my paycheck in, cashed it out and deposited it for quicker availability. The Friday deposit was most definitely unexpected. the bank was already close by the time i discovered this, however i plan on going in Monday and talking to the local bank manager. So my question is to anyone that has worked in a bank with these kinds of issues.. being that it is a deposit recorded as CASH both days, it dosnt have the same paper trail except probably a teller being massively short one day however youd think they would have investigated it that night when counting down the till. second, how is it possible that someone else decided to deposit the exact same amount the next day? (This is starting to freak me out because on this very paycheck my company paid out vacation time to me that i actually didnt have, after talking to my manager he basically said deposit it and sit on it because it will likely be taken out of a future paycheck.. so on 1 paycheck i get nearly 4x what i should have received LOL.. gift from god? :P)

  91. I just got deposited $103,000 into my account yesterday from a bank to bank transfer…

    WHAT IS I TO DO?!?!

  92. Here’s my situation. For 8 YEARS on Dec. 31 about $400 was deposited into my account because a bank employee wrote down the wrong account info.

    The money was for some guy’s RIF. He aparently is not in living in Canada, and had his daughter do the banking for him. I don’t live in Canada either and had only been using that account to transfer money to in order to pay for my car.

    I haven’t used the account at all in over 2 years.

    My mom has power of attorney for the account and had been making the car payments for me. My mom checked the passbook every month and assumed the $400 was from me for the car. Since my car payments were being made, I didn’t have any reason to check my account.

    Two weeks ago the bank contacted my mom and told her about THEIR mistake. The bank then calculated that I owe them about $3000.

    I don’t know why dumbass didn’t check his RIF in 8 years, and why his daughter didn’t notice anything wrong either. The bank has paid them their money, and now they want me togive them back the money that was deposited.

    What is the LAW regarding this? Not opinions please.

  93. Mszapalac says:

    Ok here is how it works in Texas, Facts:

    First off, bank favors will be taken back 90% of the time, so if your one of the ones that had a bank favor, said nothing, and two years later they still haven’t taken it from you then your one of the lucky few.

    It’s not a question of if they will take the money back or not, it’s what they will do to you after you have spent it. If you haven’t touched it then they will just take it back without notice.

    But now, here is when things get shaky.

    If you find the error and you send a letter to the bank or call them, etc. Then don’t even think about spending it. If you spend it and then they suddenly want it back, you signed your own death warrant by acknowledging that the money wasn’t your in the first place. So if they choose to prosecute you, you pretty much gave them the evidence they need to say to the Judge “He spent it and knew it wasn’t his/hers in the first place, Look right here he sent us a letter saying so” GUILTY! So like I stated if you think you are going to spend the money and you already notified them that you know the money is not yours then be ready for some fee’s and/or jail time when they want it back. You just committed a crime.

    Ok, now say you see the error and just go wow, and spend the money without notifying the bank at all then you are a bit lucky because the phrase “Needs to be proven guilty beyond a reasonable doubt” come into effect with you. When the bank wants the money back and they take it out of your account wether you have it or not, they can only forward your account a collections agency. They can not prosecute you because they will have to prove that you knew the money wasn’t yours in the first place, which will be hard for them to do. Many people don’t even balance their account nor look at it. So if you get a err in your favor and your just out spending your money as ussual waiting for the “Card Declined” to know you are out of money, (like most people do), Then you can say you never knew about the error in the first place. Hard to prosecute someone without “intent”.
    You would still have to pay them back, pay the insufficient funds, and deal with creditors bugging you.

    Here goes another further step though. If you spent the money and you did not notify them they you knew of the error, they pull the money back, your account goes negative, and you stop any activity with the bank. As stated they will try to forward it to collections. But, if your one of those people that already have creditors after your for multiple items. They bank will see that you already have horrible credit and they might just take the hit and file it threw their insurance for the recovery. Banks aren’t going to want they debt to be the “next in line” creditor when there are 10 more infront of them trying to get ahold of you for the past 2 years. It would cost more to get the money back threw the creditors then their own insurance. Remember they just what their money back and the cheapest way to get it back.

    In Texas Credit Unions CAN NOT deduct money directly from your checks or SS/SSI checks. If you don’t work and this has happened to you they creditors won’t even bother to sue you. It would be like suing a homeless man for money.

    Hope I answered some questions.

  94. Mszapalac says:

    Sorry for all the horrible spelling errors, I wrote it in a rush.

  95. Withdraw your original money amount and leave that amount of not your money and get new account and deposit your own money in it. so let old account sit on for long time if no one claims it then it is your money or donate to the church or any place you wish.

  96. Bank states they gave me too much money when cashing a check in the drive thru. Neither the teller not myself counted it at the time. I counted after the call from the bank and there was an extra $100 rather than the 3000 that the bank claimed the gave me. Any advice?

  97. It is not one time thing for me. For the last two months some one’s direct payroll deposit is being posted into my account every other Friday. I have no intention of withdrawing the funds but my balance is being inflated.

    I wonder how the employee and his/her employer can be so negligent. How can an employee survive without any paycheck for so long.

  98. So, I had fraud on my old checking account a few months ago. Some online company I never heard of took 1800 bucks from me. The bank fixed it and returned the funds and I closed my account and opened a new one so it wouldnt happen again and a few days ago, the same online company credited my new account the same amount they took from my old account a few months ago. Is that a bank error or is that my money?

  99. Whats the best action? says:

    A friend of mines wife put 300.00 into an online savings account. Now most of the time cents dont count in online bankng. So therefore she deposited 30k into her savings account. Leaving her bank account -28k, She immediately called the bank to resolve the issue. The bank statement shows 3 days later that the 30k was credited back to her account with all nsf fees refunded. Two months later still looking at her account still shows her +30k. What is most likely to happen. And what would her best route be considerings she already contacted he bank and it was resolved on her statement?

  100. Alex Wolf says:

    Im dealing with a bank error in my favor right now of about 500. Im only 16 so i notified my mom and being the good woman she is she is going to try and get this fixed tomorrow. Of course i am very disappointed but i still have a hair of hope because…..this has happened once before with about 150 dollars and the bank refused to take the money out of my account claiming that they had my signature on a check for this amount. Do you think this will happen again or am i doomed to being extremely let down and all of the items i have on my wishlist staying there?

  101. Idiotshere says:

    I can’t beleive all the idiotic responses… People citing jail time. Really morons? The bank can’t prove you knew there was money in there you did not have. No one balances their checkbooks anymore.

    So sick of reading 20 year old retards pretending they are attorneys.

    Spend the money.. It’s not your fault.

  102. Yes, you are right. The idiot is here.

    YES you CAN get jail time for spending that money! Can’t you get jail time for writing a bad check? If the bank reverses the deposit that put the money that IS NOT YOURS and you have a check bounce you are guilty. It is YOUR responsibility to know how much money YOU have, and writing checks that YOU do not have the money to pay is a criminal offense. Period.

  103. Elitemarksman says:

    Writing a check that you do not have sufficient funds to cover is a crime IF AND ONLY IF you had the intent to not pay for goods or services delivered.

    Bouncing a check because you thought you had $55 and only having $45 is not necessarily a crime.

  104. christophe says:

    so i am in one of these situations right now.

    i’m currently traveling overseas, staying at lots of hotels and hostels. i just moved into an apartment in paris after spending some time in amsterdam. the last hotel i booked was online and they charged my check card. upon arrival i told them that i’d like to pay in cash, so they refunded the money back onto my check card and handed me 2 receipts (i think one was theirs). 3 days later i check my account and there is a deposit for $3,000 into my account under this hotel’s name.

    so i don’t know if this is my bank’s error, their bank’s error, or if it was the hotel front desk person. i’ve read a lot of these posts on integrity and ethics but i’d like for the other people to respond to this post. i’m completely broke and living in this expensive city right now and 3000 would make my life so much easier. i want to know what steps i should take to: 1. avoid criminal charges and 2. be blessed with a fortunate accident.

  105. In my case I just got my paycheck direct deposit and noticed I had an extra 28k deposited. I also get veterans compensation for war injuries at 10% which is only $123.00 a month and this came at the same time as that and from the us treasury. At first I thought what!! but then I have a ongoing compensation claim for PTSD that had been denied already and I kept at it. All I can think of is it is the claim happening. Now this is the day of the deposit and I have not recieved any mail from the VA so I am spending it, (paying 15k worth of bills tonight). If it is a mistake they can set up a repayment plan because I will win in court for spending this, but would have to pay it back if it is not mine I think.

  106. my bank accidentially deposited $10 million in my account today! I dont wanna call them I dont wanna call them!!!!

  107. Lucky Cat says:

    A bank deposited 5K in my checking ccount. The bank regulations manual states that banks have 48 hours to inform a customer that they made a mystake. A few days later I made out a check to cash and took the money out and saved it on a safety deposit box (at a deifferent bank). They found out their mystake several days later because they charged a returned check fee. But in a few more days they reversed that fee. Even though they had my social security number, my address, and my phone number, I was never contacted. I held on to the money for 3 years which is the statute of mitations for them to do anything about it. After that I spent the tax free money. It’s been over five years now and they never called, wrote, or personally visited me at home or at work. Enjoy!

  108. Thursday I bought a bank draft from my account in the amount of $1329.70. They never charged me for it. I did call the bank and let them know of the error (yes I know, Im a wimp), and the guy said it will probably come out when the other party deposits the bank draft, and not to worry about it.
    Now, correct me if Im wrong, thats not how bank drafts work. Its a direct purchase, not a cheque, its a;ready “bought and paid for” (even though they didnt charge me). Ive been buying bank drafts for years (rent payments) and this has never happened.
    Anyone have experience with this type of error?

  109. What should I do?
    I recently closed my acct at one bank and used bill pay to transfer my remaining funds into my new bank. After almost 2 wks my $1000 was never received in my new acct. I called my old bank and talk to 5 different people one being a supervisor in bill pay. They said the check was probably lost in the mail and avised me to reopen my acct & put a stop payment on the check. I refused to reopen my acct so they put a stop payment on the check & said they could mail me the check. 2 days later the original $100 was finally deposited in my new acct ( I guess not lost in the mail) bu Now I’m getting a statement for a balance of $1000 remaining in my old acct that is soposed to be closed.
    What should I do?

  110. I had cashed a expense check today and realized when I got home the teller shorted me by $600 (gave me $1100 instead of $1700). Is this easy enough to get back when bank opens on Monday or will they hold for length of time to investigate? Or worse case if the teller stole the money will they be able to see this on cameras or do banks have a safety net for teller theft? Any advice or insight appreciated as I am worried all weekend until can go to speak with them on Monday.

    • You didn’t count the money before you left? Would’ve saved you a lot of trouble and time…and energy if you had realized the error before you left. You never know how they’ll try and spin in since you left outside the bank and went a whole day (or more) without saying anything.

  111. A couple of things here people.
    First of all the bank should and likely does have insurance – why the heck do you think we pay so much for services. Bank errors should be the banks problem.
    Second – does the bank account not belong to the individual. How can you steal from yourself? If you are careless enough to deposit incorrectly – your freakin problem – if the bank makes the mistake -then their problem but why is it ever the innocent person who had the money fall into their account?
    When people find money on the street it is not considered theft so why is it theft if it is put into your account. Still dont see how you can steal from yourself?
    Sounds like mindless brainwashing from the powerful banks. They know how to keep and make money and they choose to be lazy and let the people pick up the tab. Somebody should be accountable for incorrect deposits period and not the unsuspecting person who finds it. Let’s face it by now they could have come up with a rule or something that states you only receive 90% back of incorrect deposits and the 10% goes to the person who was inconvenienced by the error. With no accountability this crap keeps happening. If I was idiotic enough to not check and double check my deposits then shame on me only. I would not expect to get any of it back and I would be grateful to get 90% of it back. Likewise if the bank makes the error.

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  1. [...] 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) [...]

  2. [...] still get a regular stream of comments on my old post on handling a bank error in your favor. Many are people who also got some money by accident and are looking for advice. Then I saw this AP [...]

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