Australia Markets closed

Why you should never spend money accidentally transferred to you

You really shouldn't touch that money. Image: Getty

An American couple is facing charges after allegedly spending US$120,000 (AU$175,000) that was accidentally deposited into their account within weeks.

The Pennsylvania couple received the money due to a teller’s mistake, but allegedly went on to buy a car trailer, a camper, two four-wheelers and an SUV within two and a half weeks, after receiving the money in late May.

The couple also allegedly gave $15,000 to friends in need before they were contacted by the bank on 20 June and told they would be required to pay back the $107,000 in overdraft fees they had accrued, WNEP reports.

However, after one more phone call, the bank did not hear from the couple again.

“That is kind of shocking, with all the procedures the banks have set up, checking and double-checking and triple-checking, there’s no way anybody gets away with that stuff,” neighbour Nate Weaver said.

The couple are now facing felony charges.

‘Bank errors are never in your favour’: Reddit responds

Redditors took to the forum to share their experiences and lessons from accidental deposits.

“This happened to my dad in the 80s for a little over $10k,” shared user wickedgoogely.

“He went in and told them it wasn’t his. They insisted it was. He went to the main city branch and told the regional manager it wasn’t his and they basically said ‘We don’t make mistakes’. Dad said put that in writing. He did.

“Then dad closed his account and got a certified check. Three months later they called for the money. ‘Clerical error’. Dad said, ‘Here’s a copy of my letter. You can work through my attorney.’ He never heard back.”

No, that bank error is not in your favour. Image: Getty

Another user who worked for a credit union shared a story of a lucky - and clever - account holder who had a $200,000 wire transfer accidentally processed twice.

When the bank realised the mistake after a year and a half, they called the account holder who told the bank that he said expected the call.

“He said, ‘Yeah, I figure you’d call me about that eventually. I noticed it and gave it three days before I moved it to a high interest online banking account. Give me three days and I’ll have it back in my account and you can withdraw it and do what you will with it. I’m keeping the interest I earned on it, though,’” user Thecardinal74 shared.

“Now that’s a smart person right there,” one user responded, while another said that if he’d put it into an account for 18 months earning 2.2 per cent interest, he would have scored $6,703.86 in interest.

User jezebel_jessi was more blunt: “They bank’s error is never in your favour. In fact it usually means you're going to have a really sh**ty week.”

“The idea of ‘Bank error in your favour’ from Monopoly gets a lot of people in trouble apparently,” concluded zZSaltyCrackerZz.

So, what’s the law in Australia?

Australian man Luke Moore in 2010 received $2.1 million after a bank error, and went on to spend it on jewellery, paintings and exotic cars before being jailed for fraud. He was convicted of having obtained financial benefit by deceiving the bank.

However, the conviction was in 2018 overturned by the NSW Criminal Court of Appeal after the court found that Moore could not have known that he was deceiving the bank. Moore did, however, spend five months in jail before he was granted bail.

And in 2016, chemical engineering students Christine Jiaxin Lee was arrested at Sydney Airport after spending millions on handbags and luxury goods. She had been accidentally transferred $4.6 million.

The Yahoo Finance’s All Markets Summit will take place on the 26th September 2019 at the Shangri-La Hotel, Sydney. Check out the full line-up of speakers and agenda here.

Yahoo Finance All Markets Summit