Chatting About Benefiting From Bank Errors

Ester: We were both kind of horrified by the news that a teenage boy in Georgia has been convicted of spending $30,000 that was mistakenly put into his own bank account and will spend the next ten years on probation. He also has to pay back the money.

Nicole: Yeah, it seems like a pretty stiff sentence for a mistake. Even if the boy knew the $30,000 wasn’t his, which I suspect he did.

Ester: Well, sure. But the childhood ethos of “Finders keepers!” was still probably fresh in his mind, and we know that teenagers have notoriously fuzzy risk management and impulse control skills.

Nicole: It’s interesting that if, say, the amount had been smaller, it might have been viewed as a bank error. Any one of us could get an accidental $300 deposit, not notice it, and spend it. It’s because the amount is so big that it suddenly becomes a crime. And where is the bank’s responsibility in all of this, by the way?

Ester: Yeah, absolutely. The error resulted from the action of a bank teller; the boy didn’t set out or intend to steal cash, he merely spent that which appeared in his account. Irresponsible, sure, but not criminal. Whereas the adult professional who put the money in the wrong place was, perhaps, criminally negligent. Or to be accurate, grossly negligent.

Nicole: That employee has been fired, right? That’s what I think I read. Also, I’m curious about the interface she was using. Probably some old MS-DOS with a blinking green cursor? (I joke, but bad UI can lead to errors. This mistake was made because two people had the same name, so what was the second-level backup to prevent that mistake?)

Ester: Yeah, you would think there might be some sort of checks-and-balances set up at the bank to prevent this. Because people have the same names all of the time!

Nicole: And why is the teen responsible for paying the money back instead of the bank? Don’t banks have insurance in cases of things like these? I don’t know very much about banks.

Ester: My knowledge of banks comes largely from Mary Poppins, so I’m right there with you. But yes, my sense of fairness insists that the bank — the larger, more mature entity, which employed the person who made the mistake — should be responsible for dealing with the mess the mistake caused. Not that we should necessarily reward children who buy BMWs with mysterious windfalls without thinking twice, but hey, those are the breaks.

Nicole: This is where we should bring in Josh as a special guest lawyer. So let’s say the bank was robbed, in the old-school “put the money in a sack” way. The bank would be responsible for making the balances on people’s accounts, right? But then let’s say the robber was caught, and all of his sacks of money were in his hands. Does the bank cease responsibility to pay people back at that point, and the robber take responsibility?

Ester: I imagine that if the money is still all there, in the robber’s hands, then it goes back into the vaults and there’s no problem. If the robber has disappeared to Uruguay, and the bank is FDIC-insured, then everyone gets reimbursed by the government up to $250,000. Right?

Nicole: That’s what I understand, which is to say that I understand very little about banks. But let’s say the robber was caught and had already blown all the cash. FDIC still picks up the slack, right? And the robber goes to trial — or, more likely, plea bargains.

Ester: That’s interesting. According to Ben, my resident legal mind, the government would freeze the robber’s accounts (if said robber stored the stolen money in a different bank, which is hilarious, but I guess what else would he do? stuff it in a cookie jar?) and the ill-gotten gains would be “disgorged” back to the government, if it’s the government’s cash, or given back to the original victims as “restitution.” I remember during the Bernie Madoff trials that various authorities tried to seize and liquidate his assets in order to make restitution to his victims, but of course his estate insisted there wasn’t anything to take, and there were court cases about it. Lawyers went after his heirs, his family members, anyone who could have taken any of those dirty pennies, right?

Nicole: So in this case the process of making the teen pay back the money makes sense. Except for the part where the teen didn’t rob the bank! If anything, the bank robbed the bank!

Ester: Yes, exactly! That’s why I don’t think it’s right that the burden should fall on him. All he did was be kind of thoughtless and impulsive, which is par for the course for an eighteen year old.

Nicole: Hey, we fantasize about unexpected windfalls all the time at The Billfold. He just had a dream come true! Until it became a nightmare. I guess the lesson here is to confirm your windfall before you spend it, especially if you are not expecting it!

Ester: Ben is telling me now that it’s a common and controversial practice for cops to confiscate the cars of accused drug dealers, sell them if you can’t pay the fee to redeem them, and keep the cash. I’m going to look this up because it seems insane to me; we’re not even talking about convicted drug dealers, just accused ones.

Nicole: There was a Last Week Tonight about that, right? How cops arrest people and liquidate their assets, and they include that money as a line item in their budget? Here it is: Civil Forfeiture.

Ester: That is a strong incentive to arrest people with flashy cars. I saw a lot of those in Southern California when I was there, not surprisingly. Regular-looking people had these fancypants little yellow convertibles. I wonder if they worry about being robbed not merely by their fellow citizens but by cash-strapped police officers. What a crazy world we live in.

Nicole: Indeed it is, sometimes. But now we know what happens if the bank deposits an accidental $30,000 in someone’s account, so we know what to do if it happens to us: TELL THE BANK, IMMEDIATELY.

Ester: Yes, yes, an excellent lesson. Have you ever happened upon money that didn’t belong to you and kept it with no ill effects, though?

Nicole: Beyond, like, a quarter on the ground? No. (Also, if I knew that there was money that belonged to someone else, I would return it to them.) You?

Ester: I’ve found twenty dollars on the ground here and there. Once, outside of MoMA, where there was no way to tell who might have dropped it. Once in an office. I sent emails around asking if people had lost any money and no one claimed it. But nothing bigger than that. Still, it’s a lot to ask a normal teenage kid to not spend $30,000 that mysteriously appeared in his bank account. I agree he should have inquired into its provenance but I can’t imagine anyone is surprised that he didn’t. And I don’t think he deserves to be punished for being no more moral than average.

What do you think, friends?

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