Bank gave my money to someone else

[AlexandriaDumas]

What is the name of your state? California

Some time ago I discovered that a bank in which I had $4,700, in my name as trustee for my mother, closed out my account and gave the money to someone else. They refuse to give me back my money instead telling me to get it from the person to whom they gave it.

After quite a bit of back and forth with the bank, over many weeks and many telephone calls, I finally was given a copy of the withdrawal slip. The signature is not mine, in fact the signature is the exact signature of the person to whom they gave the money, i.e., the bank didn't even check to see if the signature was correct. The drivers license used as proof of identity was this same person's. There was obviously no overt attempt by the person who got the money to defraud and the bank just made a terrible mistake. However, once the check was in this person's hands, he forged my signature on the back of the check, deposited it in his own account and spent it. (BTW, he's dead now.)

Because of certain complications involved (which I won't go into here, it's a sad story and too long, involved, and boring), I don't think I'll be attempting to get my money back; however, I'd like to know about banking laws regarding a situation like this. I think the bank should be reported to the proper banking authorities, but who are the proper authorities? I've researched this and am more confused now than when I started. There are apparently different types of banks--state, federal, etc. The bank which did this to me is called Pacific Premier Bank, formerly known as Life Bank, in California.

Any thoughts?

 

[Debt Guy]

Was this other person an authorized signer on the account? If so, they have every legal right to withdraw the funds from the bank. In that situation, this becomes a matter between you and the other person.

On the other hand, if the bank gave money to someone who was not an authorized signer on the account -- and they did not have a court order directing the release of the funds -- then the bank is at fault and you have every right to demand the return of your money.

Now, your post is confusing and requires a lot of guesswork. It sounds as if the bank check was made payable to you and the other person forged your signature to cash the check.

If so, that is fraud and you must report the fraud to the bank in a timely manner and in the prescribed fashion. The bank should refund the money and send the fraud check back to the bank of first presentment (who will eat the loss).


So, be more specific in the detail and you might get more specific advice.

 

[AlexandriaDumas]

Thank you very much for replying, Debt Guy. The only authorized signer on the account was me. The bank made a mistake and gave the money to another person (my father, actually, and he's dead now). I have a feeling he had an account or accounts at that bank, and since our last names were the same, the teller just made a mistake. Unfortunately, instead of informing them, my father took the check which was made out to me alone, signed the back by forging my signature and signing his signature,, and deposited it into his checking account.

Here's where it gets tricky. On his checking account I was also a signatory. However, at that time and continuing for almost nine months thereafter, I had never written a check or had anything to do with his checking account. He told me he put me on it so that if he got sick I could write checks, which in fact, did happen at a later date.

The facts above are why I am probably not going to pursue this with the bank any further than I already have. They say I should go after his estate (there are no funds in his estate) or the bank he deposited the money in, and in any event, since I was a signatory on the account it was deposited into I have no standing. Although I believe they're wrong, I would have to take them to small claims court since it's under $5,000 and no attorney I've talked to wants to mess with something so small. I feel in court the bank would be able to muddy the waters by the fact the check was deposited into an account which had my name on it, even though my signature was forged and I received no benefit. The statute is also running, I think it's two years, and I only have until September.

In any event, I would like to report them to banking authorities. It's unbelievable to me that a bank could close out someone's account by mistake and not make good on it.

I have researched California's banking statutes, and it's incredibly confusing, leading me to find there are federal banking authorities and state bank authorities, and honestly, I'm more confused then ever. I have yet to find anything that says if a bank gives someone's money to someone else, by inadvertence or mistake, they must replace it. Something so simple cannot be found by me.

Thanks for listening.

 

[Debt Guy]

There may be more to this than is apparent to me. You may want to direct your query to Veronia -- just search for her. Veronica is the banking expert.

But, here are my thoughts.

1. The bank erred in allowing your father to make a withdrawal from your account. The mistake may have been innocent but a mistake is still a mistake. The similarity of names is a confusing factor but does not release them of their duty to make positive identification when paying out money.

2. It seems that a long period of time has passed since you discovered this mistake -- that weakens your position.

3. Your father committed fraud. This is criminal.

4. You should have immediately filed a police report when you first discovered the mistake. A crime was committed and it was your responsibility to report the crime. Personally, I would go ahead and file the police report now. Having done so will, in my opinion, improve your position slightly (assuming you did not know earlier that you needed to file the police report).

5. The fact that your father deposited the funds into an account that also had your name on the account is, in my opinion, not meaningful. But, I understand why the bank would make the argument that you really were not harmed since the money remained under your legal control. I think it is a weak argument.

6. You can sue the bank in small claims court. You don't need a lawyer. Just go down to the courthouse and ask the court clerk for the papers to complete and file. You must serve a copy of the complaint on the bank -- which you can do by certified mail. The bank may file a motion to move the case to state or federal court. You will have to make the best arguement you can to the judge why the motion should be denied. Expect the bank to use all their lawyers to defeat you. Your story should be simple and you just need to tell your story to the judge in open court.

7. Personally, I don't think it is your responsiblity to seek recovery from your father's estate. The bank should reimburse you and then they and the district attorney should seek recovery from your father's estate.

8. You can file a compliant with the banking regulators. I won't mean squat but if it makes you feel better, then do it. National banks are supervised by the Comptroller of the Currency. State banks are supervised by the state regulatory agency (call the Governor's office and ask the name and phone number of the state regulatory agency). Again, no one will care that you did this and I think the regulatory agency is unlikely to investigate the bank.

9. Another idea is to write your state representative, state senator, US congressman and US senator. They will likely at least write a letter to the bank and ask what is the deal. If they have a local office, go to the office and meet with whoever you can talk to. Understand the that the most they can do is try to embarass the bank into doing the right thing as they have no authority and cannot threaten the bank with any sort of punishment.

I'm out of ideas.

 

[AlexandriaDumas]

Some excellent ideas. I owe you a big one. Thank you very much!