This story tells of a Wells Fargo bank teller who stole $185,000 from a homeless man.
In this case, the account holder was not allowed to make a deposit to his own, dormant, account. First question: Why does it matter if an account is dormant, if someone wants to make a deposit to it?
Second question: It seems to be a policy of banks in general that third parties are not allowed to make deposits to someone else’s account. Why? If Joe Blow from Kokomo wants to deposit a gift of a few kilobucks into my bank account, I’ll gladly take it! Why does the bank care?
I deposit money for my kids…done it many ( too many ) times. My older son has his banking in a credit union. The girls have regular banks. Neither institutions know me except for deposits. They are not where I bank.
As a bank employee for many years, I can tell you some of the reasons for this.
This is (or was) a common method for online scams to work: people were told to deposit their down payment in account #xxx, and then the online seller would start transferring the title into there name …
Renter X claims he deposited the rent in cash at month end, so the landlord (account owner) comes to the bank wanting confirmation. But 12 deposits of that amount were made on the last day of the month, was one of them from this tenant? Bank systems are designed to record the date & amount of deposits, not so much who made them (nearly all are from the account holder). So it takes work from bank employees to dig out this info for their customer.
This is often being done by someone far away, from phone conversations (kid calls parents desperate to have them put money into his account before his rent check bounces). They come in without a deposit slip, only the account number written down. Often incorrect number. And they don’t know the name on the rental company’s bank account, so they don’t notice that it’s going into a different business account.
As above, it’s often used for illegal money laundering.
Sovereign citizens & other troublemakers can mess up a judges’ account by depositing many bad or fake checks into it, thus causing many fees to accumulate on it. (Which the bank eventually has to forgive.)
The common feature of all of these is that it takes time & effort for bank employees to deal with the after-effects of these situations. In many cases, they can fix the problem, but it takes their employees away from other tasks, thus increasing the banks’ costs. They have to do this, to work with their customer (account owner), but with no corresponding income to the bank. So in the end, these situations are a drag on the banks profits. Easier to just not allow them in the firs place.
Interesting. For over a decade I have been handling my mother-in-law’s finances (my wife has POA). Many times I have deposited checks made out to her (either ones I wrote or ones she received from another party) into her checking account (joint account she has with my wife, I am not on the account). I just endorse them “For Deposit Only”, fill out a deposit slip, and hand them to a teller. I have never been asked for any sort of ID, asked why I was depositing money into an account that’s not mine, or had any hassle at all. I do very little business with this bank, so the tellers don’t know me from a hole in the ground. This is a fairly sizeable bank (a subsidiary of RBS).
Likewise I have never been asked for identification when I make a deposit at my own bank, unless I am requesting cash back from a check deposit.
Banks are there to make money (by getting it from their customers, mainly).
The job of Tellers is to do things that make money for the bank. (That’s why most of them have been replaced by ATM’s, which work for no salary or benefits and do so 24 hours/day.)
A third party check is one paid out to customer Y, who then signs it over to Customer X to be put into Customer X’s account. Banks don’t often accept them because they don’t have a relationship with Y and have no reason to trust said check.
Someone else depositing money into your account is just that.
Isn’t the lender supposed to check on the source of the money? (In Canada, it’s common to get a loan from family and call it a “gift” so the bank doesn’t know your real debt ratio. In other words, the bank doesn’t really check.)
I think it’s because the account holder didn’t have an ATM card or ID. How would the bank know this customer was even theirs?
(I also think there should be some sort of national ID backed up by a fingerprint. Yes that will raise hackles in some quarters, but if you lost your ID, you could show up at a government office, get fingerprinted and get a replacement, instead of having to jump through a lot of hoops after getting robbed.)
The last time I opened up a new account, the bank wanted to know if I was going to deposit the money for someone else. I assume they wanted to avoid money laundering, hiding assets from legitimate seizure, etc.
During India’s demonetization exercise it was extremely common for poor people to open new accounts and “rent” them out to people with more money. The government wanted to tax all that black market cash, but it turns out wealthy people would rather pay account rent than tax. Especially if the account owner was an employee who couldn’t really charge “rent”.
There could also be a legal issue. If you “lend” someone $1,000 for a while for some reason (maybe you’re having issues with your own bank?) and the account holder decides not to give the money back, what are you going to do? Do you have a written agreement? Can you even prove the money is really yours?
I don’t mind if someone from Kokomo or anywhere else puts money into my account… but I’d like to know who is doing so, and why. I’d prefer a cheque (since you can put the reason on the memo line). Europe has a system called Giro which seems to do these transfers much more smoothly and safely.
I don’t think the issue is a lazy teller. I think the issue is a risk-averse bank (not that I can blame them much, especially not when a person without ID shows up with hundreds of thousands of dollars in cash!).
Right. Hence the question. Let’s assume the homeless man wasn’t the account holder. Potential money laundering aside, what does the bank care if someone wants to give someone money?
My daughter in law is a bank teller, she is basically in the service industry. I cannot see how bank tellers make money for the bank, they are handling other peoples deposits. The depositor ( or investor or loan recipient) is who is making money for the bank, and of course all the banks investments. I promise you the teller is the lowest rung on that ladder. They are there at the pleasure of the bank to serve the customer.
Furthermore if the teller is asked to do something questionable they should hand it off to a manager or supervisor. The homeless man story sounds a little farfetched , anyway.
Totally possible your DIL’s bank is different, however in many banks the teller is seen as a 1st line salesperson. They have the day to day contact with the clients, and are in a position to spot sales opportunities. The first bank I worked for, the tellers had weekly referral targets for the number of customers they referred to the dedicated sales staff with sales opportunities. For instance:
Customer comes in wanting to buy foreign cash, Bonanza - referral for a travelmoney card, or a personal loan to fund the trip, travel insurance (if your bank sells it).
Customer comes in wanting a cashiers cheque for a business you spot is a car yard - easy referral for insurance, or to talk about a personal loan rather than using their cash.
Even if no ‘related’ opportunity was spotted, the teller should try an ‘unrelated tag on’ (that was the official term at that bank) which was basically a product of the month pushing exercise.
If you weren’t meeting your referral targets that produced a performance discussion with manager regardless of how often your cashdraw balanced first time, or anything else you might regard as key for a teller.
Over here there is no restriction on transferring money from one account to someone else’s. I can pay anyone by bank transfer with a few clicks and some typing, so long as I have their account details (these are handily printed on cheques).
The problems would start if I tried to pay cash into another account. AFAIK that is not allowed for many good reasons. I can pay cash (up to £3k I think) into my account, but after that, they would want some information about the source etc. Money laundering is taken very seriously these days.
When electronic transfers first started, it was a problem for anyone receiving money to identify where it came from. My sister, who ran a club, would get subscriptions with no idea who from. That’s been sorted now, so it’s easier. Of course, any such payment can be traced back, so if I transferred some money to an official’s account in an effort to compromise him, it simply wouldn’t work.
I did the same for about 3 years. My landlord supplied the deposit slips too. All I had to do was fill in the amount and take it with my check to the bank. Always used a teller for the deposit so I had a receipt.
The issue arose because more than $10,000 was being deposited. A bank ordinarily will take a deposit of less than $10,000 into an existing account and will not ask for identification from the depositor. However, a bank must file a currency transaction report for each transaction in currency of more than $10,000. For this purpose, multiple transactions on the same business day are treated as a single transaction. In connection with the report, the bank must verify and record the name and address of the individual presenting a transaction, as well as record the identity, account number, and the social security or taxpayer identification number, if any, of any person or entity on whose behalf such transaction is to be effected. Verification of identity normally is made by examination of a document, other than a bank signature card, that is normally acceptable within the banking community as a means of identification when cashing checks for nondepositors (e.g., a driver’s license or credit card). 31 C.F.R. § 1010.312, eCFR :: 31 CFR 1010.312 -- Identification required..