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?
Nothing kidding about it. If they don’t fix it by the end of the month they’re on the path to losing it. The reason to transfer it is that indeed then the interest IS hers because it came from a completely different bank, that’s part of the reason to slide it out. Heck she could take it out Tuesday morning, she should just understand that sometime in the next couple of days they’ll figure it out and expect their money back. But if she can pony it up anything else she gains from it is hers.
The savings account is not likely any more safe than checking.
If she has direct deposit, her employer can automatically remove the funds. If not, they will come looking for it.
She needs to notify the bank and her employer. If she is very worried, write a letter of notification and have the bank manager sign it, ditto with her HR director.
After she does that, I think she is fairly clear of liability.
No it is not hers if they dont correct it, that is absurd. Nor does she have any right to touch the interest. Period.
Tell her company and if she wants to, tell everyone in writing but this will be corrected soon. Do NOT transfer that extra money or touch it, interest, or anything else to do with the extra money in any way shape or form.
Just my OPINION not meant as legal, accounting, or any other advice to you or your daughter.
I wouldn't be too concerned about IRS issues unless her W-2 is screwed up too....which is really, really unlikely. Banks are required to report cash transactions in excess of $10k but, frankly, in the banking world $98k isn't that big a deal.
Tell your daughter to withdraw the money (in small unmarked bills) and send it to me. I know just how to correct the mistake and clear this all up.
OK, seriously, keep detailed records of everything done to return the money. DO NOT move the money around. They'll figure it out soon, and she doesn't want to give anyone the impression that she is trying to obstruct the return of the money.
If they don't correct the problem soon, consider getting a lawyer to handle it. It sucks that she (or you?) might have to pay for a lawyer when it isn't her fault, but I would feel much better having a lawyer representing my interests in a situation like this.
I personally believe that contacting HHR or accounting and reporting the issue and steps taken to correct it is the best policy. Her employee handbook should list the direct numbers for one or the other. A manager might get a slap on the wrist for not passing the information to HHR, whereas HHR might see it as for cause reason for dismissal.
And again, I mention that the clearance center could place a hold on her account for the entire erroneous amount, even if it exceeds her balance. Which means every transaction that occurred since the deposit may be denied and fee placed on her account. The bank manager should be able to clear those, if it does happen. If she calls the bank manager at or before bank opening on Monday, the manager can check her account and keep an eye out for those cascade fees. This is the branch manager directly, not the 800 number for customer service.
Sounds like a reasonable solution and the honest thing to do. Just out of curiosity, which bank?
Looking over the different responses it struck me how all of us seem to answer the issue from a pragmatic viewpoint rather than a moral one including yours truly.
Bottom line is: DON'T TAKE WHAT AINT YOURS!
As soon as she gives the money back to the Bank, she will have to pay gift tax on it.
I would check to see if there was any way you could turn your daughter in for some kind of reward.
Eventually it most certainly is hers. The time period seems to vary by state, but indeed all the legal sites I just checked all said the same thing, eventually it’s your money and if they do catch all you owe them is the error NOT any extra you might have earned with it (like interest in another bank) while they were getting their act together.
;) That's funny!
Terrible advice. She should withdraw the entire amount, fly to Vegas, and bet it all on one spin of the Roulette Wheel. If she wins, she can pay off the mortage. If she loses, it's off to Venezuela until the statute of limitations expires.
Black letter law your ass. Give us some legal citations please. And your law degree and credentials dealing with these issues.
Forgive my profanity but giving someone such advice sight unseen is extremely irresponsible.
As to the poster’s concern about IRS issues, there will be an ample paper trail to demonstrate to the IRS she didn’t have this large deposit, and it was a bank accounting error. IF it is ever reported to anyone.
Call the Finance Department. If they don't fix it call the auditors.
Just checked half a dozen legal sites. Each state has laws that set the end period (generally measured in years just like I said), but if the bank doesn’t try to correct the error by the end period it’s your money. And in fact if they do catch it all you owe is the error, not any interest. And once that time period passes it IS YOURS so you can take it, legally AND morally. Shouting doesn’t make you right, in fact in this case you just shouted a whole bunch of wrong.
I would notify the bank and the company in writing, registered mail, asking them to sort it out.
Don’t touch the funds.
I haven't laughed this loud in days.
I needed that!
Now there’s a plan I could enjoy.
She needs to work with her employer on this, namely the payroll and/or accounting departments. Her direct supervisor (boss) may want all conversations to go through them or may want her to just talk with corporate herself.
Her employer, like every large company, will need to reconcile at the end of the month. If the pay week was partly in September, they also will be reconciling a Quarter-end, as of 9/30/2011. Part of this will be reconciled for 10/31 month end (the bank reconciliation).
Reconciliation needs to be between payroll and G/L, and payroll and cash (for the net pay). Also, the company will transmit payroll data to the Federal and State government probably every week or at least every month. This needs to be reconciled with the payroll data they have on file, i.e., what they send to the Federal and State governments needs to match their records.
If the check was correct but the bank cleared it for the wrong amount, only G/L Cash and Payroll Net Pay will not agree; it will also be a reconciling item on the monthly bank reconciliation.
This will require people at her employer to work on cleaning this up. She may actually have to write a check to them to give them the money back, since an electronic withdrawal is designed for regular payments, not one-time payments, i.e., it requires authorization. Her check would necessitate an oddball accounting entry being made to accept it and set things right.
Of course, if the check was made out for exactly the correct amount, and she were to return the excess funds by making out a check for the total minus the exact net pay she was to receive, then she will not need have another pay check cut - and all will be done with all the reconciliations in payroll; only the bank rec will have a reconciling item. This is by far the easiest route because Federal/State 941 (quarterly payroll), i.e., all payroll records will stand correct as is.
This may take accounting and payroll some time to get it right; I’d say be patient and cooperative but keep calling corporate payroll and / or accounting all the time to get it resolved so it does not fall between the cracks. Who knows, they may try to “fix” the check by reversing it or something.
If the check was for the wrong net pay amount, then, of course, there’s fixing in payroll to do, which must then be adjusted in government reporting and in G/L.
Keep a careful record of every communication, including voice, email, paper letter, etc.
I like to start at a high level as such issues receive much better attention and get resolved with much less pain.
IMHO...
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