They did what? Biggest bank blunders ever
May 29, 2009 by Jennifer AzaraPosted in: Benchmarking, Government, Internal controls, Lighter-side, Special Report
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:
- 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.
- 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!
- 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!
- 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!
- 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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Tags: Bank blunders, Bank statements, Citibank, Mistakes, New Zealand, Overdraft, Veterans
June 1st, 2009 at 12:42 pm
Here is a bank blunder that affected me. My son, 19 years old at the time, had a checking account with one of the major banks in Pennsylvania; I had custodial access to that account. One day I found an unexpected deposit made the previous day for $25,000. Where had this come from? I went to a bank branch, where a teller at first told me that this was a correct deposit. He even reprinted and gave me copy of a deposit slip from another branch of the bank, showing me an authorized deposit of this amount….in cash. I pressed and pressed, and he was finally able to get an answer from the manager of that branch. Another customer with the same first and last name as my son had taken out a $25,000 line of credit, and had arranged with the bank to deposit that amount into his own checking account. The teller had carelessly deposited it by name, not by account number.
At my insistence, they immediately froze those funds, and removed them from my son’s account.
Now, just imagine if I hadn’t noticed this error. The proper account’s owner was probably writing checks against this line of credit. Wouldn’t those checks have bounced. Here’s another thought. I have a copy of the deposit ticket, which is to all appearances perfectly legitimate and shows a deposit made by cash. Suppose I had taken those funds, insisting that the deposit ticket was correct. How long and how much trouble until the bank properly corrected the error.
Anyway, at my insistence the bank corrected the error. I still bank there, but I check my balances every day.
June 1st, 2009 at 1:06 pm
My son recently tried paying for something with his debit card only to be denied. Needless to say he went to the bank immediately to check his balance. When he got there he was met by one of the managers who was on the phone with the head office. Checking his account he found that he was overdrawn by more than $4000. (This was a bank error according to the manager, who was on the phone attempting to fix the error). Suddenly she started to laugh and asked my son how quickly he could make out a withdrawal slip. It seems while trying to correct the first error that caused the overdraw, another mistake was made crediting my son with over $300,000. I am not sure why but my son still banks there.
June 2nd, 2009 at 2:42 pm
While reconciling our company account, I found a check charged to our account written on a company that we had no relations, through a bank we did know, with an account number not like ours, written to a person we did not know. The bank had no explanations.