Bank deposit error in your favor? Give it back
Remember when Uncle Billy in It's a Wonderful Life loses the bank deposit, and George's troubles ensue (and a holiday classic is born)? Or when Loretta Castorini in Moonstruck forgets a bank deposit as part of a series of comedic misunderstandings? Bank deposit bloopers happen in real-life as well, but the dollar amounts are considerably higher and the bank deposit bloopers are often caused by the bank, not the customer. And, the end-results of these bank deposit bloopers are, unfortunately, not always as heartwarming as in the movies.
Take Randy and Melissa Marie Pratt, whose perceived windfall turned into jail time, when they took an erroneous bank deposit and ran. Melissa made a bank deposit to FNB Bank in the summer of 2008 of $1,772.50, but the bank read the check as $177,250. When the central Pennsylvania couple saw the difference in their bank balance, they wrote checks to another account, quit their jobs, bought a new vehicle and moved to Orlando, Fla. They were in the process of buying a house before the bank deposit mistake was traced.
When a New Zealand bank worker mistakenly changed Leo Gao's overdraft limit this May from $62,000 (USD) to $6.2 million (USD; NZ $10 million), he and his girlfriend withdrew $2.3 million, closed their failing gas station and fled to Hong Kong, where the police pursued them. The couple is still on the run and have developed an online following, inspiring Facebook fan groups as well as a parody song on YouTube.
James Falzone made a bank deposit of $630 at Barnett Bank in New Port Richey, Fla., back in May 1985; a teller marked the bank deposit as $63,000. Falzone withdrew $47,000 four days later and paid off his MasterCard debt and some loans from Barnett and other banks (hey, at least he was financially responsible, right?). He was charged with grand theft.
In 2000, Susan R. Madakor received bank deposits of $701,998. Foreign governments were trying to contribute to a United Nations environmental program account that was one digit off from Madakor's Chase Manhattan Bank account. Madakor, from Brooklyn, claimed she believed she won an international lottery and had spent about $250,000 to invest in a laundry business, set up a college fund for her son, pay off credit card debt, and lease a minivan before Chase realized the bank deposit error and froze the account. Madakor's request to a State Supreme Court judge that the assets be unfrozen was denied. She was later convicted of bank larceny and bank fraud, sentenced to two years in prison and ordered to pay restitution to Chase.
When Herbert Starbird from Altoona, Pa., found an erroneous bank deposit of $280,276 in his First Commonwealth Bank account in October 2007, he spent more than half the money before the bank contacted him. He said he only spent the money because First Commonwealth told him it wasn't a bank deposit mistake. The bank said they never told Starbird the money was his, and he never contacted the bank. Starbird faces civil charges as well as criminal charges of theft and receiving stolen property. This February, Starbird expressed anger to the Altoona Mirror that the charges were deterring him from getting work and once again stated his belief that the money was his, saying, "I paid every bill I owed. I took care of my kids, my family and everything. I wasn't extravagant." In early November, his attorney requested a dismissal of the criminal charges.
Moral of these stories: Getting an erroneous bank deposit is not the same as winning the lottery. It's not mystery money. It's theft. And that holds true whether you're pocketing an erroneous bank deposit of $2 million or $2. Just because it was the bank's error doesn't mean you have an excuse.
Allan Mattei, managing director of Novantas LLC, a strategy consulting firm specializing in the financial services industry, says banks will aggressively pursue anyone who does not return erroneous bank deposits. "If you made a bank deposit that didn't show up, and the bank just said 'sorry,' you would aggressively pursue your money, right? The bank's attitude is, it's an error, but if you refuse to return it when you're asked, that moves [the issue] into a different realm. The joke is 'bank error in your favor,' but if you see money magically appear in your account and think it's yours, that's just wishful thinking."
Mattei says if you see a bank deposit error, whether to the positive or negative, you should contact your bank immediately to find out the underlying reason. "Most people are honest about this sort of thing," he says. And if you're not? "All these banks have entire buildings full of lawyers. That's difficult for one individual to stand against."