Finance News & Insights

They did what? Biggest bank blunders ever

You probably get pretty aggravated when you spot an error on your company’s bank statement. But we bet whatever you found wasn’t this big.

True, sometimes there’s a major systems glitch behind the screw-ups; other times it’s as simple as human error causing these monumental mistakes:

  1. Early retirement for one New Zealand couple who applied for a $7,800 overdraft from their bank and wound up having $7.8 million deposited in their account! The bank said it was a human error, not a computer one, responsible here. No such thing as free money, though. The couple took the money and ran – and are currently being pursued by authorities.
  2. Forget egg – the largest (and most scandal-prone) bank in Ireland wound up with an entire omelet on its face in 2004. Turns out the financial institution had been overcharging customers for years. The bank tried to claim it was merely a technicality – most overcharges were for less than $38 and the bank still had the lowest rates around! Bet the CFOs of those overcharged customers didn’t think that mattered!
  3. This made for some grumpy employees: A full 10% of the people in New Zealand paid by the largest bank’s corporate banking system woke to find no payment in their accounts. To blame this time? “Operator error during the bank’s overnight batch processing.” But we know who probably got most of the blame: Each company’s payroll folks!
  4. These folks served and protected our country, and in return … they get slapped with bank fees and penalties for bounced checks! That’s just what happened when more than 450 veterans tried to present checks from the Veterans Affairs Department. A Citibank employee had changed a contract arrangement between the bank and the department, placing stricter limits on the amount of time veterans had to cash government checks for reimbursement of certain expenses. When the checks were presented outside that window of time, they bounced. Citibank had to reimburse the vets for the checks and the extra fees!
  5. The government may want banks to disclose more about their own financial situations. But they probably shouldn’t be this forthcoming with details about their customers. When Stephanie McLaughlin asked Halifax for a copy of her own bank statement, she was shocked to receive 2,500 pages containing the account details of more than 75,000 of the Scottish bank’s customers. The bank apologized for the “isolated incident” but still lost Ms. McLaughlin as a customer (and probably 75,000 others!)

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