Theft, or lucky break?

[sirjamesp]

An Irish guy has suddenly become very rich after a bank error: his bank was meant to transfer the equivalent of 300,000 pesetas into a Spanish account, but, due to an admin balls-up, his Spanish account was credited with 300,000 euros (over a quarter of a million US dollars).

The first he knew about it was when the bank informed him that they were sending an official to collect the cash; he went to the police station to explain what had happened, and was arrested and dragged before a court. He now must report to the court fortnightly until the situation is resolved.

His response has been that since the bank has resorted to strong-arm tactics, he intends to KEEP the money.

A news report can be found here.

Now, I am not sure what to think of this. Is he right or wrong?

My thinking part of the brain (the small bit) knows that it’s not his money, and it will only hit other account holders if he does not return it.

On the other hand, since banks take us all for a ride, it seems only fitting that they should get a bloody nose for once.

I know he can’t keep it all, as the bank will find a way to reclaim it eventually. But my solution would be for him to return the money, minus a substantial “admin” fee.

So, a GQ is: can he get away with keeping all or some of the cash?

And the question that verges on a GD is: should he?

[The_Ryan]

Suppose you were to give the bank 300,000 euros instead of 300,000 pesetas. Would the bank have any obligation to return the money? I don’t see why the bank should have different standards than individuals.

As for “should”, well, that really depends on deatails that we don’t know.

[Ned]

This kind of thing can result in criminal fraud when the party knowingly removes the funds to prevent the bank from correcting their mistake. Obviously the authorities have not decided to press charges in this case but charges have been laid in similar cases.

Finders keepers isn’t much of a legal strategy these days nor can one charge administrative costs outside of a contractual relationship providing for such charges. In the US and Canada the bank would sue for money had and received which is commonly used for moneys paid by mistake.

If this happened here I would have an order that the funds be paid into court within a matter of days. If he continued playing his silly games I would have him locked up for contempt.

[Typo_Negative]

Should he get to keep it. No freakin’ way.

The bank making a good faith error doesn not mean a windfall for this guy. It’s not his money and he knows it(hence, his ‘I’d of given it back, minus a finders fee’ stance). For him to withdraw it, knowing it was not rightfully his, is theft.

[sirjamesp]

*Originally posted by Ned *
Obviously the authorities have not decided to press charges in this case but charges have been laid in similar cases.

The authorities and bank weren’t quite so noble; according to the TV report I saw, he was arrested when he went to the police station to explain what had happened. He then took the decision to withdraw the funds because the bank took him to court rather than simply asking for the money back.

*Originally posted by The Ryan *
Suppose you were to give the bank 300,000 euros instead of 300,000 pesetas. Would the bank have any obligation to return the money? I don’t see why the bank should have different standards than individuals.

Of course the bank would have an obligation to return the money - though my first action on discovering the mistake would not be to threaten the manager and have him arrested. As you say, the bank should have the same standards.

In all, it seems to me that a kick up the arse is just what the bank needs. All power to the guy who is doing it (even if his motives are not so pure and white).

[Mangetout]

This reminds me of a case where a clerk entered the date of a deposit into the amount field in the computer, so it was something like £15,122,000 (15/12/2000) - the mistake was noticed quite quickly, but IIRC they let the account holder keep the interest (which for 15 million, was quite a tidy sum - even for a single day).

Come to think of it though the whole story might be an urban myth.

[Embra]

Well, yes he should return the money as it’s not his, but banks in my experience do have a tendency to leave the customer service manual at home in situations like these. As the guy said, the bank has a disclaimer stating that it is not responsible for errors made during the transaction. I think it should recognise that a customer is not responsible for these errors either!

I had a minor set-to with my bank a couple of years ago when they were also my employer. They overpaid me in one pay-cheque, and told me they would reduce my next paycheque by the same anount to keep things in order. Fine, I said. In the end, they still had not retrieved the amount by the time I left them (it was a short contract, but they did have about 3 months in which to get their act together through the payroll). About two months later, I noticed that the amount in question had gone from my bank account. Now, since I had intended to let them have the money, this caused me no problems financially. However, I was annoyed that the bank had done it without contacting me. I did wonder if another employer would have been able to do the same thing. What if, unknown to the bank, I had been in dispute with that employer?

Anyhow, given that any of my questions and fears probably had quite simple and legitimate answers, I rang my bank to complain (my one complaint being that they had not informed me that they were removing the money). They were entirely unhelpful, and rude to the point of implying that I was a thief. Since the money was theirs and they were entitled to have it, it seemed that they felt they had no obligation whatsoever to allay and of my concerns as a customer. Bah. I suppose I’m lucky they didn’t send round an armed response unit to relieve my piggy-bank of any suspect funds…

Embra, who keeps her money in a stinky old sock under her mattress.

[Typo_Negative]

Originally posted by Embra *
** I think it should recognise that a customer is not responsible for these errors either!*

But they are not asking him to responsible for the bank’s error. His withdrawl of funds that were not his is his own error.

Mr Hickey said he volunteered to give most of the money - given him in exchange for 1,500 Irish pounds ($1,675) instead of 300,000 Spanish pesetas - back to the Bank of Ireland in return for a small reward.

Maybe I’m wrong, but I read this to say he withdrew the funds as soon as he saw them, and before the bank could correct their error electronically, then informed the bank he would return what he stole for a price.
IMO, the guy is a thief.

[Chupacabra]

I had this exact situation happen to me when I went to college. I opened a checking account at the local bank and deposited $1,000. I received an ATM card when I opened the account, and since it was my first ATM card, I wandered over to the nearest ATM machine within the hour to try it out. I did a balance inquiry and lo and behold, I found I had $10,000. Obviously, my first instinct was to walk back to the bank and immediately withdraw the cash, but my second instinct kicked in shortly thereafter and that one told me that withdrawing that money would be tantamount to theft. I knew damn well it was an error and I had done nothing to earn it. There really wasn’t much of an inner dialogue in that regard. The moral issues were quite clear. I immediately went to the bank and informed them of their error. Irish guy is in the same boat and Irish guy needs to return the money. I realize he might be pissed about how the bank is treating him or maybe he’s just trying to extort some cash, (probably the latter) but he knows better, either way.

[CnoteChris]

There are precedents to not giving the money back, however.

Check out this guy’s experience with a $95,093.35 junk mail check that he cashed–

The $95,093.35 Junk Mail Check

It’s a long read, but well worth it. I was thoroughly fascinated by it. Kudos to the guy for having the balls to pursue the matter and stick it to the bank. I won’t ruin how it ends, but something for nothing can come out of these things.

[Nymaz]

I think it’s obvious the money belongs to the bank. No question he should give it back.

What I wonder about is the situation with the arrest. The OP and article aren’t clear how that happened. Did he:

1. Get contacted, and make a declaration “OK, I’ll give it back, but minus a finders fee”, and after that have a warrant
   for theft/extortion/whatever sworn against him, or
2. Get contacted, wander into the police station to say “hey what the heck is going on here?” and get arrested on the spot.

Now if it’s 1, I have no sympathy for the guy. He attempted to play a game and lost and now he has to pay the consequences.
However if it’s 2, I would think he would have a case. Not for keeping any money, tho. Return the money immediately, then
turn around and sue the bank. They had no evidence he intended to steal the money, yet they made a statement to the
authorities that he had stolen the money (the police couldn’t have acted without some action by the bank).

[mhendo]

It seems that what happened was that the man had an account with the Bank of Ireland, and also had an account with a bank in Spain. He asked the Irish bank to transfer 1,500 Irish pounds to his Spanish account, but they accidentally transferred the amount in Euros instead of Pesetas. So the money was now in his Spanish account. When he was contacted about the error, and informed that a Bank of Ireland official was in Spain looking to retrieve the money, he went to the police station where he was arrested.

What is not clear from any of the reports is exactly what caused the arrest. If he was arrested, fingerprinted etc. without even being given a chance to rectify the situation, then the actions of the police and the bank seem rather unreasonable. But we don’t know what was actually said in the police station. It is entirely possible that he walked in and said “It’s your mistake, i’ve already spent some of the money and i’m going to keep the rest.” In this case, the arrest etc. would be rather predictable.

The guy’s general attitude seems to be that he has no intention of giving the money back.

Here are a couple of print news reports of the story:

CONFUSION and costs in exchanging different Continental currencies are often cited in favour of the euro, but one bank customer found himself nearly pounds 185,000 better off this week as a result of a muddle over punts, pesetas and euros.

Lucky Dubliner David Hickey gave Bank of Ireland about pounds 1,200 to exchange into 300,000 pesetas. But a bungling bank clerk issued Eu300,000 instead, worth nearly pounds 186,000.

Now Mr Hickey, who is resident in Spain, may be thanking the luck of the Irish after the failure of the bank’s first attempt to retrieve the money. But institutions on the mainland, including the Consumers’ Association and British Bankers’ Association, argue that customers should not celebrate prematurely when a bank makes an error in their favour. Bank of Ireland officials called in police and even sent an investigator to Spain in a bid to track down their customer. Mr Hickey, 49, said he had no idea of his new-found fortune until he got a call from the bank last Sunday, alerting him to the fact a Bank of Ireland official was in the country.

After the call, he went to a police station in the resort where he lives to explain the situation. But he soon found himself under arrest, in handcuffs and being interviewed through an interpreter.

He was released but asked to report every two weeks until a decision was made about how to proceed with the case. Police sources said the man was guilty of no offence and they could not help the bank. One said the problem was of the bank’s own making and written consent was needed from the customer before they could retrieve the money.

Mr Hickey, 49, from Tallaght, Dublin, told the Irish Independent newspaper: "I have broken no laws but I have suffered because of the bank’s mistake.

“I have taken a bite out of the cherry,” he added and explained the money had been put in “a secure place”.

A Bank of Ireland spokesman confirmed it is pursuing the recovery of the money.

(from The Daily Telegraph, London, 24 November, p. 7)

and

Christmas came early for an Irish man this week when his bank accidentally transferred nearly pounds 200,000 into his account.

Dubliner David Hickey asked the Bank of Ireland to switch IRpounds 1,500 into pesetas and put it in his Spanish bank account before heading out to his holiday home on the Costa Brava. But instead of crediting him with 316,900 pesetas, the bank gave him 316,900 euros, worth a hundred times more.

But his good fortune was short-lived. Bank officials called in police and even sent two investigators to Spain in a bid to track down their customer. Mr Hickey admits he “took a bite from the cherry” and has spent some of the money, but is not saying how much. He told the Irish Independent newspaper that the money is in “a secure place” and he believes he has done nothing wrong, because the error was the bank’s.

But when he presented himself to the Spanish authorities, he was arrested, finger-printed and taken to court in handcuffs. He was released but has been asked to report every two weeks until a decision is made about whether he has to stand trial. He now faces a charge of “misuse of property”.

(from The Guardian, London, 24 November, p. 10)

One really interesting aspect of the story that i only found in one newspaper account was the following, from the Irish Times (22 November, p. 7):

[Hickey said] “But I looked at the original transfer form and it had a disclaimer on it saying that Bank of Ireland took no responsibility for any mistakes made during the transfer. And the Bank made a big mistake. So I thought: Fine, this money is effectively mine.”

Now, i’m sure the disclaimer is intended to imply that, even if it does make an error, the bank will fix it later, but will just take no responsibility for any short-term inconvenience arising out of the error (i.e. ruined holiday etc.). But it is easy to see how someone might interpret this to say that errors in the customer’s favour are final.

And the same story also said:

According to garda [Irish police] in Dublin, however, Mr Hickey has committed no crime. The bank needs Mr Hickey’s written consent to take the money back.

While the guy is obviously taking money that isn’t his, i must confess to a certain delight in seeing a bank getting screwed.

An interesting aspect of this issue, from the Guardian story cited above:

However, Jobs & Money investigations reveal that bank crediting errors, frequently involving many thousands of pounds, are widespread, and that astute account holders have used them to their advantage.

Understandably, the beneficiaries wish to remain anonymous. In each case they have switched cash wrongly credited into their accounts to pay off debts such as mortgages and credit cards. When the bank discovers the error, they agree to repay the money - but only over a long period of time and without any interest. In effect, what they gain is an interest-free loan.

Mr W, a retired finance director in Bournemouth, looks after the financial affairs of his son, who works in Dubai. In the mid-90s, he noticed an unusual pounds 2,200 credit in his son’s account, with one of the big high street banks, but did nothing about it.

The following month the same credit, for another pounds 2,200, appeared. When the next month another pounds 2,200 appeared, Mr W transferred the cash to reduce the size of his son’s mortgage. The monthly payments continued for more than a year before the bank noticed its error, by which time Mr W had paid off pounds 34,000 of his son’s mortgage.

The bank demanded immediate repayment of the cash, but Mr W refused. "I told them I thought it was my son’s money all along, and that the money was not there to be transferred back. Instead I offered to repay the money at pounds 500 per month.

“The bank agreed, but wanted interest. I refused and they backed down. Interest rates were much higher then than today. I reckon I have saved my son around pounds 21,000 in interest payments.”

What they say

Each bank will follow different procedures, says the British Banking Association, but will always make it clear that the customer who sees a credit turn up in their account “is not automatically entitled to it”.

It is the responsibility of customers who spot an unusual credit to inform their bank immediately, they say. If the customer doesn’t notice it or doesn’t tell the bank, it may take a number of steps. Small amounts may simply be debited from the account. For larger amounts, the bank will probably call and inform the customer that it is being removed.

If the money has already been spent, the bank may agree to it being paid back over time, or, depending on the amounts involved and the circumstances, it could decide to prosecute, says the BBA.

[Boyo_Jim]

The guy COULD come up with something legally, though the money will have to be repaid.

While the money is in dispute in the courts, he can put it into an interest bearing account, and keep the earned interest. Of course, if a court finds he acted fraudently or maliciously in taking the principle, penalties and fines might cost more than the interest he earns.

There are aome anti-racketeering statutes in the US that would also lay claim to the interest as the “proceeds of ongoing criminal enterprizes”, but these are unlikely to be applied to a one-time isolated act.

This kind of thing happens often, though usually with smaller amounts.