Banking Gone Bad


There was an interesting news story on Digg today, coming from the Daily Telegraph. The subject of the story was a couple who inadvertently ended up becoming rich. Very rich.

But the question is whether or not they shall remain so. The couple has been brought before court by Westpac, the bank which “accidentally” ended up lending the couple $11 million dollars.

The question posed by the blogger is whether or not the couple should be allowed to keep the money. $11 million dollars is a lot to lose, whether or not you’re a major business. Nonetheless, the people — knowledgeable at the time or otherwise — are in no way responsible for the bank’s problems. On a personal level, I would have to say that I don’t believe the people should have to pay it back. If I hand a friend $1, and they use it, is there not an unspoken understanding that they do not have to pay me back? This, assuming that there was no prior agreement that I would be lending the money, as opposed to giving it. The relationship between the bank and its customers, while hardly personally intimate, is still one in which the pre-decided agreement stands. Without one, it would seem to me that the money was given to the people, clause-free.

But then, that’s what it eventually comes down to, particularly in a court. The clauses. What will almost certainly be the deciding factor in the case, if I don’t miss my guess, is whether or not the bank has required a signature on any document stating that money placed in the account by the bank is to be repaid, period. I should know, of course, since I have a bank account myself, but because no one reads the fine print, it will probably take further investigation on the part of the people responsible for the situation to determine yay or nay.

What will most certainly ensue, however, is that banks will begin to demand this change of clause so that they are better protected. Surely if McDonald’s feels justified in placing warnings on their coffee cups, banks will jump all over the opportunity to defend themselves against something of a far larger risk.

Regardless of the ensuing semantics, however, it’ll be interesting to hear who wins the battle!

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2 Comments (+add yours?)

  1. blackberry guy
    Aug 23, 2007 @ 16:27:00

    Yes, the bank should sue. Yes, the doofus should be forced to return the money.

    Imagine the reverse situation: the bank accidentally took money out of someone’s account. Wouldn’t they have to pay it back?

    Ollis obviously knew he was receiving payments he wasn’t entitled to. There’s an onus on him to phone someone up and say, “Oops — thanks, guys, but you’re too kind”.

    I don’t know exactly how the law addresses a situation like this, but I don’t think he’ll get away with acting all innocent: “If the bank can’t do their job properly, it’s their problem.” Nu uh, it’s your problem now, buddy.

    Reply

  2. Knotwurth Mentioning
    Aug 23, 2007 @ 16:50:00

    The bank has the money in everybody’s account. That’s the way the system works. If they failed to return the money when it was demanded, there would be issues, of course. But that would be covered by the legal side of it.

    All semantics aside, it really comes down to the legalities of it. I’m sure that banks have to bind themselves to being responsible with their customers’ money. If the law doesn’t state that the banker has to repay the money that the bank gives him, however, then that’s the bank’s problem. Surely it has happened before that a bank has given away $3 to a customer. The question is whether the bank did something to prevent that from happening again, or if they let it slide, thinking that such a piddly amount is worthless.

    In the former case, then they should be suing. In the latter, then it’s their problem. Let them suffer for a lack of foresight. Banking is a business, and when operating a business you’re going to face the consequences of your actions.

    Reply

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