Skip to comments.Advice on a Bank Error
Posted on 10/09/2011 5:18:17 PM PDT by Marie
My daughter is a full-time college student working part-time (minimum wage) for a large, national corporation.
Last week, she went to her bank kiosk to deposit her check. The check was supposed to be for just over $300.
The computer changed the amount to more than $1,098,000.
She came straight home and reported the error to the bank. They said that it would take 24 hours to fix it.
Apparently, the 'fix' was to drop the $1,000,000 and just give her the $98,000 and change.
Her company honored the check and deposited that amount.
She's really frustrated. It's been four days. Does she keep working through the bank or should she contact her corporate headquarters to fix this error? She's also terrified of anything happening to the money while it's in her care and was wondering if she could move it to her savings account for safe-keeping. (Her savings is connected to her checking. This would just protect the money if someone got a hold of her blank checks or her card.) She's worried that such a move could be interpreted as an attempt at theft.
Has anyone here dealt with such a thing before? She's not an idiot and she is well aware that the money isn't hers, that the error will be caught and the money returned eventually, but she wants this taken care of as fast as possible.
One last issue. Banks report large deposits to the IRS. Is this going to bite her in the butt come tax time?
She should give the bank one more call Tuesday. If they still don’t don’t fix it she should shunt the money to a savings account somewhere else, don’t touch the principle for at least a couple of years, skim the interest. If the bank says something give them the money back, if 2014 or 15 comes around and they still ain’t said anything it’s her money.
I don’t have any experience, but it seems to me the simplest course of action is to contact her company. They will be motivated to correct the error, and chances are will have the resources / expertise to execute whatever process needs to occur in order to make that happen.
Don’t move the money anywhere. The bank will fix it and she needs to keep records of who she talks to and when she talks to them. It would also be a good idea to talk to her employer just so they can’t say that she didn’t.
Keep documents and call logs? There will be IRS notification and also contact whomever does her taxes, if she uses a CPA? Paperwork is her best defense and everything should be saved to verify it? It will be on her to prove it was not her error? I am not a tax advisor, nor am i representing one, just giving my two cents. Please do your own due diligence and proceed accordingly.
Tell her not to touch the money! But she should let her employer know whats going on & that the bank has been contacted.
When they finally come around to claim it, there it is! To touch a cent of it will put her in a world of hurt.
She should still notify her company's HHR and accounting departments of the bank error and concerns she has about it. The company will of course contact their bank to ensure that the check is honored only for the amount it is written for.
In the meantime, she should be prepared for bounceback on her account. The clearance center may place a ‘hold’ on the check, debiting the full amount out of her account (including the million dollars the bank ‘corrected.’) She should assume that there is no money in that bank account for right now, and if you're in a financial situation to assist, provide her with temporary funds to tide her over until the error is corrected.
She should be prepared to answer questions from her company why she waited so long to notify them of the problem as well.
The bank can put the money in an escrow account. At 1% interest there is nothing to be gained by playing with the principle.
Notice i start off with her reminding them, then only touching interest for at least 2 years. Eventually if they don’t catch it it most certainly is hers, but you need to give them time. The important thing is to not take the money and run. They’ll probably catch up eventually, probably Tuesday, or at the latest with end of month processing. But if they don’t they don’t. If you tell them twice and wait years and they still don’t catch it eventually it’s too bad for them.
She should report it to her boss, and if the bank is still stupid, it might make sense to show the error to the prosecutor, in case the bank gets “embarrassed” and decides to put the blame on her. The banks have audits, so the loss will be discovered. A teller once gave me $200 too much. When I called to report the error, the teller told me they were getting ready to call me. This was within a couple hours of my cashing a check. Honesty is always best, even with stupid banks.
And have her print out a statement showing the high dollar amount to casually leave out for nosy relatives.
I went through the same thing with a smaller amount. Bank personel are rather arrogant about their jobs. They kept telling me that it must be an error on my part. I had to go to the bank and go through the account with them item by item and it still took them a bit to figure it out.
The check was deposited on Wednesday. Immediately after calling the bank (and being reassured that it would be taken care of), she went into her work and notified her manager of the error. She also produced the receipt.
The manager and her co-workers acted like the whole thing was a joke and took pictures of the receipt. One of them edited out my daughter’s personal information and posted the photo of the receipt on her facebook.
So she does have it documented that her manager was notified and she has time/date-stamped photos to prove it.
I don’t see how she can get into trouble *at this point*. What I can foresee are IRS issues next spring.
We’ll give it until Tuesday afternoon (hope the clearing house catches it), then start making more calls.
I would place the money in an escrow account just be sure, and make sure EVERY communication is recorded like say...sending them an e-mail to BOTH banks and company that “I have or plan to place the large amount in an escrow account as it is not mine”.
Make sure everything is black and white and recorded in case the IRS come knockin’. Protect yourself.
Sure hope your joking, because that is some of the worst advice I've ever heard.
The correct response to this situation is to call the bank again, keep track of names, call the payroll department of her company, keep a record of everyone she has spoken with. Do not transfer any of the money, do not spend ANY of the interest (since it isn't really hers to begin with). In fact, if she can avoid it, don't even use her accounts till this situation is cleared up.
Having worked a bank for many years in the past, it is surprising how long this kind of situation can take to clear up. If the bank's proof department thinks you should have x amount of money in your account, then by God it is very hard to get them to reverse the error sometimes - even if it is a ridiculous mistake in your favor.
The actual tellers in banks really don't care what the check says unless their is cash involved. Especially if it is a regular customer, most banks simply deposit whatever the customers says is the correct amount from the deposit slip. They rely on the proof department to verify the amount, and once the deposit clears it can sometimes be very hard to fix this kind of error.
Let me put it this way, Their memory exceeds your life expectancy.
Do absolutely nothing. Do not touch the account, do not withdraw nor deposit funds to the account. Ten working days after that deposit has been made, if the money is still in her account, the money is hers. That is black-letter law.
Let me put it this way, their memory means nothing. Eventually they lose all claim on it. Not quickly, but it does happen. Their error, she tried to fix, they don’t, she tries again, they don’t, they’re rapidly running out of options. They can “remember” all they want, but it’s still their mistake, and she tried. You don’t want to go quick because there is a time period when the law will favor them, but eventually it’s too bad for the bank.
This is one reason why I don’t have direct deposit. Plus, I’m self employed.
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