Ethics of banks

I was at my grandparents’ house a few days ago and they were telling me of some banking issues they were having. Apparently someone else had used their debit card number to make a purchase that was over $100. It was some pipe company with which my grandparents have no affiliation. This part really irritated me. The bank said that for a $15 fee, they could call the company and ask them to put the money back into the account. If the company refused, they would be out of that money plus another $15. If it was me, I’d tell the bank I’d call them myself and that I’d be there the next day to close my account and move my money to a bank that cares about its customers. I have three questions, at least two of which are debatable. First, do you consider this to be moral? I think it’s highly immoral to make them pay for it when the bank shouldn’t have let this happen in the first place. Second, is this legal? In other words, could they sue or bring the law into it another way? Third, is this commonplace among banks? I feel I can’t trust any banks that would make me pay for their mistakes. I hope there are banks that agree with me.

The title reminds me of a reputed chapter in a guidebook to Ireland.

XVI Snakes of Ireland

There are no snakes in Ireland.

This story sounds a little strange. I have never dealt with a bank (to be sure, I’ve probably only had meaningful dealings with a half dozen banks in my life), nor have I heard of one who would tell a customer that unauthorized charges against their account are not the bank’s responsibility.

As for moral to charge for this service - the bank is incurring costs while they investigate, so that’s not beyond reason for them to charge for services that they incur costs on.

However, I would argue that they also have the obligation to protect their account holders’ funds from theft, mistakes and fraud, any of which your family’s situation may fall into.

In this instance, I couldn’t say that it’s intentional theft or fraud, but certainly is a mistake (at the least) and I would argue that it’s the bank’s responsibility to rectify the account because this is a mistake your family clearly (from your story, which I assume to be all the relevant facts) did not make. And in this instance, I think it’s a matter of the bank’s due dilligence and they should not charge for the correction.

As for what to do, IANAL, so I’d recommend going into the bank and discussing the situation with a manager. Being polite and etc. would be important and I wouldn’t leave until the charge was removed.

And then I’d get a cashier’s check for the balance and find a new band ASAP.

I’m glad someone agrees with me. It blows my mind that they would do it. I’ve also heard of this banking charging to research one’s account to see if they made a mistake. I can understand charging if it’s found that there was no mistake, but if there was, then the bank needs to own up. I didn’t believe that one before since it was just hearsay but I’m starting to.

I should also add that your grandparent’s bank may have a “terms of service” type agreement that opening an account would require consent to. There m ay be something in that re: fees in this instance. I would suggest they look through their documents before going in and talking to the bank.

Assuming that such documents exist and they have the most current version, there may also be something about the bank’s obligation in situations like this.

I concur with “find another bank,” and “check the terms of service.”

We’ve had one experience with a similar occurrence. Checking the monthly statement, I found an ATM withdrawal in a city that I was pretty sure neither of the card-holders had been in at the time. Called the bank, told the story, and the charge was removed. No charge, no hassle other than having to fill out and sign a one-page form. We are not liable for unauthorized use of the card.

Another time we found a small debit to the account that was not properly explained and, as it turned out, not properly documented, either. Some clerk had apparently made an error of some sort in entering a deposit. The bank was able to tell who the teller was, and it was determined that this person was no longer an employee. They credited back the money since they could not document the charge. It may well have been a legitimate debit, but since they couldn’t document it, they put the money back in our account.

This was Commerce Bank, BTW.

They need to change banks.

My bank not only handled all of the fraudulent charge problems I’ve had quickly and without any fees, but they credited my account with the money I lost until they resolved the issue.

I can’t tell from your OP exactly what kind of unathorized charge was made (if it was debit card, usually a PIN is needed, if it was a “visa check card” that’s also a bit different, but this sounds like an “ACH”, in which the person doing the debiting just needs your account number).

Regulation E (Link) probably covers this; see “Sec. 205.11 Procedures for resolving errors.” for the pertinent language.

I’d suggest (not a lawyer, not your lawyer, etc), especially if the bank doesn’t want to play, that you make a detailed dispute in writing quoting chapter and verse of whatever regulations seem to apply; this starts clocks running and forces them to respond in writing, even if you are in error about the right regulations or the nature of the problem.