No post yesterday because I was arguing with a bank. We decided to eliminate some debts. One of them was a loan with a small regional bank, let’s call them creditor bank, who we had requested a payoff quote from. The quote was for $41,800. We signed an authorization for them to perform an ACH from our checking account for that amount. That transfer cleared on Friday.
This morning, I get a notice from my bank that my checking account is overdrawn by more than $30,000. Of course, I call immediately to see what the problem is. It turns out that the creditor bank performed a second transfer in the amount of $41,300. The transfer was pending, so it hadn’t officially cleared yet. I paid $35 to put an immediate stop payment on that transfer.
Multiple calls to Creditor bank eventually wound up in an account representative, myself, and the manager on a three way call. The story they gave me was too crazy to make up. According to them, the amount of the payoff that I was quoted was incorrect. The payoff was actually $41,300, which was $500 less than what they had originally quoted me. Instead of simply mailing me a check for the overpayment, the bank thought that it would be a good idea to go ahead and take the correct amount out of my bank as a second ACH transfer, then the plan was that they would refund the original ACH payment back to me in 10 business days.
My response was: “And you think that is a good idea?” They thought that it was.
Ok, dummies. Wouldn’t it be easier to simply refund the $500 overpayment, rather than perform an ACH transfer that you weren’t authorized to withdraw, and then have to go back and refund more than $40,000? You do know that what you did was called stealing? Did you think that I wouldn’t miss the money?
No, they responded, because we were not intending to keep the money, we intended to refund the incorrect amount all along.
My answer to that was, “Well, I had to sign an authorization for you to perform the original transfer. Where is the signed authorization for the second transfer?” Crickets.
How can a bank, people whose job it is to handle money be so monumentally obtuse? I am not intimately familiar with banking regulations, but I am betting that what they did was not legal, and if it is, then one has to wonder why.
It took me most of the day playing phone tag to get it straightened out.
23 Comments
Grumpy51 · December 10, 2024 at 9:01 am
While my situation involved a VERY lesser amount, my approach was more aggressive – to the point of threatening to have charges filed for theft, with local law being notified for arrest warrants. Granted, this was last century, and I am NOT a lawyer. However, I was made whole within the hour. It utterly sucks that this happens, and the fact that it continues to happen is evidence of the stupidity of people (remember when Wells-Fargo was opening accounts for people who hadn’t authorized it, and IIRC, NO ONE went to prison?).
I am still NOT a lawyer, but I’d wager that what they did was NOT legal either.
Anonymous · December 10, 2024 at 9:11 am
Security Service Credit Union wrote me a cashier’s check for 8,000 dollars on a Wells Fargo account. I should have figured it was a problem. The cashier’s check BOUNCED. The response from the manager of the Security Service Credit Union told me to wait it would clear in a day or two. My response was would you like to walk across the street to the substation of the Colorado Springs police when I file FRAUD charges for writing me a hot check? Like I told her It will go easier when the judge see’s you turned yourself in voluntarily. They “miraculously” found my money but wanted me to sign a hastily prepared statement that I would not file any charges and would hold the Credit Union blameless. I said no, the response was sign or no money. My response was would you like to add extortion to the charges? They caved.
Steve · December 10, 2024 at 9:15 am
They were counting on the interest over the 10 days they illegally had your money. As an individual, that isn’t a large amount, but if an organization does that across a number of accounts, the little amount adds up. My bank did the same thing for clearing checks. Your account would have the check ‘deposited’, but not ‘cleared’ until 10 days had passed.
JimmyPx · December 10, 2024 at 2:26 pm
16 years ago I worked for Megolobank. It is WAAY more than interest, in the banking World they call this the “float”. They have Float Managers whose sole job is to make money off of the float.
For example for most people your paycheck is sent to your bank on Wednesday afternoon and you have access to it Friday morning. During this time interval they are investing your paycheck in very short investments on Wall Street and making money. This adds up to major money for the bank and is very important to their bottom line.
Also a dirty little secret in banking .. ever notice that when you make a credit card or debit purchase, you can login to your account and there is the transaction and the money taken out ?
DITTO for deposits but they BS you about holding it for days to clear so they can make extra money off of your deposit. It was true in the old old days before computers that they needed days for the check to clear but not today.
Rick · December 12, 2024 at 6:41 am
This is exactly why I suggest filing a suit. The cherry on top, make it a class action.
No, I am not kidding.
It's just Boris · December 10, 2024 at 9:42 am
$41,000 x 5% APR x 14 / 365 = ~$80.
(Assuming 10 business days is 14 calendar days.)
By itself not a huge amount for a corp … But do it often enough and it will add up. And even if they weren’t “really” stealing the principal, they certainly are trying to cheat you out of the interest you would have earned.
Rick · December 12, 2024 at 6:44 am
I think the fraudulently added amount fattens the balance sheet to look good to the regulators.
Steve S6 · December 10, 2024 at 9:56 am
You could probably get them charged for attempted money laundering.
oldergent · December 10, 2024 at 12:35 pm
I have come to realize far too many time that people like this are far too worried about the process than they are the outcome.
Silverfox · December 10, 2024 at 1:19 pm
And likely buried deep within the Terms of Account- Is a Binding Arbitration Clause.
Divemedic · December 10, 2024 at 3:21 pm
They are still controlled by banking regulations and regulators. I don’t need to sue them, I just need to file a complaint with the Banking Commission.
Ozborn · December 12, 2024 at 7:45 pm
Correct. I’d also suggest dropping a note to the FDIC. That will focus the federal regulators on that bank’s ACH controls at the next exam. You can do it online, anonymously or (if you want to hear back from them). https://ask.fdic.gov/fdicinformationandsupportcenter/s/?language=en_US
oldvet50 · December 10, 2024 at 2:35 pm
That is precisely the reason I give no one the ability to withdraw funds from my banking accounts – ever. I use the Bill Pay feature where I authorize funds to be sent to others instead of them taking it out of my bank. I lost a $10/month discount from TMobile for that reason (they used to accept charge card payments for the discount, but they stopped that in favor of using bank drafts only that THEY initiated.) A $1,000 mistake would hurt me, so I can’t imagine what a $40K mistake is doing to you. I was also informed by the bank that any mistaken withdrawal would not be prosecutable since I gave them ‘carte blanche’ privileges (which is what an ACH authorization is). I would have to fight in court to prove fraud if the money was not returned in a timely manner – I guess they determine what ‘timely’ is.
Divemedic · December 10, 2024 at 3:24 pm
1 Large bank transfers require specific signed permission. They had that for the first transaction, but not the second.
2 You can’t do bill pay for large amounts.
Phil B · December 10, 2024 at 3:43 pm
But … but … doesn’t EVERYONE have as a bare minimum $100,000 sitting around in their bank account, just on the off chance that they want to make multiple payments of over $40,000 ON THE SAME DAY?
Yeah, right Like that is likely or sensible and suddenly having a $30,000 overdrawn is neither here nor there and/or the overdrawn fees can be recouped by looking down the back of the sofa for the loose change.
No, unless the banks feel the pain, they are not going to change their behaviour and as pointed out above, it is to their advantage to do this. Suing them (maybe through the small claims court) for the $35 cost to stop the second payment as a minimum and for any overdrawn penalties may cause them the necessary pain and bad publicity needed.
The Southern Nationalist · December 10, 2024 at 4:10 pm
I remember hearing something about bank account funds being the property of the bank once you place your money into them, have you heard of this?
If true, its the same as robbing someone by setting a trap.
Danny · December 10, 2024 at 4:12 pm
Ridiculous … AND you had to pay 35 bucks to your bank to stop the transfer. Nickel and dime you to death …
lynn · December 10, 2024 at 8:23 pm
This is why I hate ACH with a passion. Idiots.
Boneman · December 11, 2024 at 5:49 am
Banks seem to think they can do whatever they want. My father in-law wrote me TWO checks totaling $10K when he was on his death bed. We had the same bank so it was pretty easy for me to simply deposit them, I even did so AT HIS LOCAL BRANCH.
He dies a week later and what happens? THE BANK SIMPLY CLOSES MY ACCOUNT. No fuss, no muss, no warnings nothing. They seize ALL funds…. the $10K plus what I had in the account, the DIRECT PAYROLL DEPOSIT that very morning… EVERYTHING. Just SHUT IT DOWN. ZERO ACCESS to ANY and ALL funds.
You better believe things got a little ugly when I arrived at my branch that morning. I ensured that they released all but the $10K (that took almost a YEAR to clear up) and I had to get new accounts at another bank.
And no, I have no qualms stating that Chase can still go fuck themselvesl even ten years later.
Fred Lewers · December 11, 2024 at 7:53 am
Contact a lawyer. Sue for some astronomical amount. Keep EVERY news outlet on speed dial and make EVERY effort and use EVERY legal trick to keep it a hot and burning news item for a couple of weeks. So much that the top dog gets accosted by reporters daily. Then settle for a ridiculously small amount with enormous accountability. They will NEVER toy with you again. The old “step on my toe and I’ll amputate both your legs” kind of fight. It works if you have the leverage.
Divemedic · December 11, 2024 at 8:15 am
The stop payment went through, so it only wound up costing me the $35. For now.
I fully intend on getting my $35 back.
Arbeit Macht Fweedom Fwies · December 11, 2024 at 9:16 am
They don’t consider it as your money.
See what happens when you go to get it in the planned economic wipeout.
Aesop · December 11, 2024 at 3:15 pm
Kudos. Any day you can tell a bank to unf**k themselves is a good day.
Barring your results, five minutes’ time with your attorney, and a suggestion to bank officials that subsequent phone calls would be criminal complaints to the FBI and federal regulators usually gets their heads firmly withdrawn from their asses, and you can usually hear the popping sound with any decent phone.
The FBI actually loves when bank officials admit to the original crime with the excuse that they were going to hide the fraud later; it gives them a lot of chuckles when bank officials admit to serial felonies, and it makes your subsequent civil damage suit fly right to settlement in record time.
Bonus points for having a friend call them back “working on a story” for a local news agency, and “asking for their side” of this crazy story about criminal fraud, usually cements their butts to the puckered position.
FWIW, my ex- was an auditor for a Top Ten bank, and Baby Brother wasted 25 years of his life running a branch with another Top Ten. O, the stories they’d tell.
If a bank branch ever gives you the run-around, you might call their regional or corporate offices and ask for the extension of the Branch and/or Corporate Auditing Department. When you call the branch back with the name of the auditor(s), the jig is usually well and truly up, and someone’s going to be packing their desk by the end of the week. That’s usually the last time anyone in that bank will monkey around with your account. Also, the auditing departments have both their corporate legal department and the FBI on speed dial. When someone seven levels above the branch manager yells at them, it’s amazing how quickly results go your way.
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