Windfall or hassle?
According to the district attorney's office in Walworth County, Wis., a man was charged with theft when a check for more than $49,000 was accidentally deposited into his account at Fifth Third Bank. "He was having financial difficulties so he spent it," Walworth County district attorney Phillip Koss says. "When the bank asked for it back, he put them off. But when he was charged with theft he came up with the money."
Besides having to cough up the misappropriated funds, he also paid a $500 fine.
Mistakes will always happen. "Due to the sheer volume of transactions that go through here every day, it does happen that sometimes mistakes are made -- sometimes 'unjust enrichment' as it's called, or overcredits. But, undercredits can happen as well," says Stephanie Honan, a spokeswoman for Fifth Third Bank.
"We generally find out about them through our internal checks and balances, or the customer brings it to our attention. After that, we work with them directly to correct the account. In the case of undercredits we pay any fees they may have incurred due to the oversight."
In most cases, bank errors don't lead to arrests, merely hassles and headaches.
In the case of Gloria Pedroza, the mistakes led to her finding a new bank. "Errors were made about every other month," she says. "There were at least three cash deposits that weren't credited and one that was overcredited." Luckily, the bank recognized the mistakes and credited her account for the fees from bounced checks written against the lost deposits.
The overcredit was the last straw for Pedroza. "I deposited money and my account was credited double the amount of the deposit," she says. "I called the bank to correct it, the person on the phone told me not to use those funds because they were not mine."
"Duh! That's why I called. And then it took the bank almost four business days to correct it. It was a nightmare, and I was paying for this service," says Pedroza.
File this under 'don't hold your breath'
Once in a blue moon, banks make a mistake and, due to some inexplicable shift in the universe, let the customer walk off a little bit richer. Such was the case for Thomas Grosch.
Back in the late 1950s, well before automation, Grosch opened an account at a well-known national bank, at a Sacramento branch. "This was only in case I needed lunch money when temporarily working in that city," he says.
When he returned to withdraw $20, the account had doubled in size. "I pointed this out to clerk at bank window. She checked and claimed all was in order," Grosch says.
"A few months went by and, I returned to bank. The small account had grown by 300 percent. The teller insisted all was in order; hence I spoke with the branch manager who also said my account was without error.
"When the account got to $3,000, the manager told me that if it happened again I should close the account and pay for our lunch.
"Again, I returned to the branch and there was almost $9,000 in my account. We had a grand lunch. The bank manager continued to insist there was no bank error and he had thoroughly researched the account. He believed I was entering cash into my account."
Grosch closed the account, pocketed the money and lived happily ever after, until he received a phone call a few years later. "It was the bank branch manager who was retiring," Grosch says. "He told me that an elderly fellow with the same name as mine had passed away a week previous. He had died at 99 years of age. The banker assumed that this was the person entering money to my account."
At the end of the conversation, the manager told Grosch not to worry about the money. He had conferred with the man's beneficiary who was pleased with what she inherited. The inadvertent mix-up even led to a meeting between Grosch and the deceased's beneficiary to discuss the strange coincidence.
Bank errors ending in the customer's favor aren't a relic of precomputer history. Caroline in Highlands Ranch, Colo., had a similar, though less lucrative, experience.
"I set up automatic monthly transfers from my bank to a mutual fund company. After the first month, I noticed that I had $200 deposited to the mutual fund but not taken out of my bank account," she says. "I called the fund company, they said it was a bank problem; I called the bank, they said it was the mutual fund company's problem. I called the mutual fund company again, and they said not to worry about it. I called my mom, who was a corporate auditor for a Fortune 100 company. She had run into this problem before in her work. She recommended that I document who I talked to and set aside the money in case they discovered the problem."
For three months $200 mysteriously appeared in Caroline's mutual fund account and then, on the fourth month, $200 was deducted from her bank account and, she says, no one ever asked about the previous $600.
The other side of the coin
Though some lucky few over the years have profited from banks' mistakes, it's not hard to imagine that more have lost money in disputed transactions. Such was the situation of Roberto and Cecilia of Doraville, Ga., when they deposited $200 at a bank in Chamblee, Ga., near closing time at the drive-in window.
"We came back to the bank to make a withdrawal the next day," Roberto says. "When we saw the balance, we found out that the bank did not have the deposit from the day before. We went inside and talked to the manager. She said that if we did not have the receipt she could not do anything for us. We argued all we could but she said that she trusted her female employee in doing a good job and basically she said we might be lying."
Roberto and Cecilia closed the account and vowed to never do business with the national bank ever again.
Call in the feds
Kevin Mukri, director of press relations for the Office of the Comptroller of the Currency, says in cases, such as Roberto's, where the customer isn't satisfied with the resolution of a problem they can call the customer service specialists at the OCC -- if it's a national bank. The Federal Reserve oversees state-chartered banks.
"Last year, we got between $6 and $7 million dollars back to consumers, I think we do a pretty good job," says Mukri. "There are billions of bank transactions every year, banks are not perfect, but most people are satisfied with what they do."
Not everyone agrees.
"Just because they're handling your money doesn't mean they are rocket scientists. Banks put a lot of pressure on their staff in a sweatshop kind of atmosphere," says Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, a consumer advocacy group.
Sometimes discussions with the bank reach a stalemate and the only thing to do is go straight to the regulatory agency to resolve the dispute. Let the bank know that you know they have a state or federal regulator, and that you will be complaining, says Mierzwinski.
Statute of limitations for errors
When the bank happens to take $120 out of your account when you only got $60 from the ATM, you have a window of 60 days to dispute the transaction. After that -- too bad, so sad and don't bother complaining to the bank. A federal law known as the Electronic Funds Transfer Act limits the period in which you can notify your bank of a mistake in your account to 60 days from the date the statement containing the error was sent.
If your debit card gets lost or stolen, better act quickly because you have two measly business days to completely limit your liability to a cap of $50. Check transactions are governed by a separate set of rules, the Uniform Commercial Code and the Check 21 Act in the case of substitute checks, which also limit the time you have to dispute a transaction -- except in the case of electronic check conversion wherein you're once again covered by the EFTA.
How long does a bank have to take back money they mistakenly put into your account? It varies by state, but is measured in years, not days and they have the threat of jail to back up their actions.
"The EFTA is a very weak law, and a lot of the time these situations are covered by it. But it doesn't, generally, do much for the consumer," says Mierzwinski. "Banks don't have a soul. Increasingly, all they're looking for is ways to make money."
What's a consumer to do?
So, what should you do if you find yourself in temporary possession of your bank's money? "If it is a very large amount of money, you would be naive to think that it's your money. And, if it's not your money, they're going to want it back," says Mierzwinksi. "It's another story if it's a small amount. If you do spend it by mistake, I would insist that the bank give you a reasonable amount of time to pay it off. Or, they should write it off entirely as an act of good faith."
When you notice the error, Mierzwinksi recommends alerting the bank. Don't speak with the first teller you get to or the person answering the phone on the customer service line. Go to a supervisor.
Linda Sherry, director of national priorities for Consumer Action, advises that while speaking with someone at the bank document everything and get a specific time frame. "Ask when they expect the investigation will be complete and write down the name of the person you speak with, the time and date."
"If the date given for the end of the investigation arrives and the money is still in the account and you have to follow up, you are getting on much firmer ground for keeping the money. You do your duty by making the report.
"You can't take the cash out and go fling it at a teller," Sherry says.
"I've spoken with people who have done everything they can to give the money back but it's very difficult. You have to leave the money in the account so they can figure out how it got there in the first place." |
