A bank error in your favor is not your ship coming in

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bank error, hands counting money

We’ve all done it: fantasized about what we would do if we won the lottery. A cool million would easily divide among us and our kids. With our cut, what would we do? Pay off the mortgage? Take a trip? Throw a party? Well, for one Pennsylvania couple, a bank error felt like winning the lottery.

The couple were living with their four children in the home of the husband’s father when their bank mistakenly deposited $120,000 into their checking account. Typically, the two had about $1,000 on average in their account, so seeing this money appear must have felt like Christmas.

However, they knew the money wasn’t theirs and that there must have been a mistake. So before making a single withdrawal, they contacted the bank and reported the error.

No, that’s not really what they did.

Spending spree

What they actually did was to go on a shopping spree. We’re not talking about getting a new pair of shoes or winter coats for the kids (which they also may have done), but instead they bought a used SUV, a couple of four-wheelers, a brand new race car and a camper. They probably bought some groceries, paid some bills and treated themselves to dinner at a nice restaurant.

But let’s go back to the race car. The husband apparently races 4-cylinder cars in local events but was having some trouble keeping his cars on the track because of persistent engine troubles. Imagine finding this money, exactly what he needed to finance his passion. Imagine the mental calisthenics he must have done to justify using the money for a new engine block and motor. Perhaps part of that justification was to give $15,000 of the bank error deposit to friends who were in need.

Bad advice

I have to admit, I’m right there with them. The amount of money they discovered in their account may have been two or three times what I could earn in a year. And someone else’s mistake, egregious mistake, should not be my problem.

To correct the mistake, maybe the bank should’ve withdrawn the money from the teller’s account instead of from the couple’s. (The bank did attempt to withdraw the money, leaving the couple with an overdraft of more than $100,000.) And besides, weeks had passed before anyone even noticed the bank error, so they must not have missed the money that much or needed it as badly as this Pennsylvania couple did.

I’m guessing these are the kinds of things their friends (perhaps the very friends with whom they split $15,000) said to them to encourage them that to keep the money was the right and just thing to do. However, I’m not sure they needed much convincing. Turns out the husband already had several convictions for theft, passing bad checks, receiving stolen property and other crimes.

What should you do in case of a bank error?

Here’s the bottom line: If something looks wrong with your bank account, contact the bank. When you regularly balance your account (note to self: balance checking account ASAP), you will notice if a bank error results in a large sum ending up in your account. If your mom is not one of those who sneaks a little spendulicks (as my grandmother used to call spending money) into your account, you can assume it is a bank error.

After contacting the bank, keep a careful log of everything that happens from that point. Every conversation with the bank, every transaction you make, every dime you spend.

Be aware of your original balance, and do not spend ANY of the extra amount. The bank will reverse the deposit mistake even if it overdraws your account. Like the Pennsylvania couple, you may end up facing severe overdraft charges and potential criminal charges for spending money from a bank error.

Finally, if your bank is careless enough to make mistakes with the deposits of people’s hard-earned money, you may want to consider banking elsewhere.

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