A few weeks ago, I heard a sad story about the lack of corporate loyalty—about the actions of a national bank towards one of its customers. It seems a friend of mine was trying to sell his car on craigslist. Craigslist is a pretty neat way to sell your car or furniture—it is essentially an online community with point of presence in several major cities: San Francisco, Washington, DC., New York, Boston, and a few others. Well, he put an ad out for a car that was just bought last year.
As part of one of the responses, he got a cashier’s check for $20,000. The strange part of the story is the check was for $7,000 more than he was asking for the car. He was told in an e-mail that the person who had mailed him the check was doing for a client and the client had requested that my friend wire the $7,000 overpayment immediately, and mail the title of the vehicle once the cashier’s check had cleared his bank. The situation didn’t seem right…
He went to his bank—which will remain nameless. He told the bank that he had some serious questions about the cashier’s check and wanted them to verify it. The bank officer called the issuing bank and confirmed the check was legitimate. When he asked the bank what to do to with the check, he was told to deposit it. Not sure, he went to another branch of the bank and went through the whole thing again. The bank officer at the second bank told him to cash the check, and not to worry as the check had passed muster. This time, my friend decided to cash the check. He then got a cashier’s check made out to the bank he had financed his car through, so he could pay off the loan and have the title free and clear. He deposited the balance of the cash into his account.
He mailed off his bank’s cashier’s check to his auto finance company. A few days later the title arrived in the mail. He was at his bank, the day the title arrived and noticed his bank account’s balance was now almost $17,000 in the red. This was about $20,000 less than his account’s original balance. Where did the money go? Well, it turns out that the cashier’s check he had been sent—was in fact bogus. This same check he had serious doubts about, and had been told was good by two different bank officers. Apparently—the bank now realized the check was counterfeit, and since they had no idea who actually had sent the check to my friend—they decided to take the money from his account—the account of a loyal customer, who had in good faith questioned the validity of the check and asked them about it.
When he went into the bank to discuss what had happened to the money in his account, he went with a mutual friend. This mutual friend is a television producer for one of the local network television stations. Our friend asked the branch manager, “What would have happened if they had just cashed the cashier’s check?” The bank officer replied, “They could have walked out of the bank with the $20,000, and the bank wouldn’t be able to do a thing.” Our friend then asked the bank, “So, he is being punished for being a loyal bank customer?” The bank officer said that wasn’t the case. The producer said that it surely seemed that way, since the bank was taking the money from a customer’s account after assuring the customer the check was okay to cash. The bank said they would look into the matter and take appropriate action.
A few days later, my friend found his account at the same balance it was before he cashed the check. He was out the balance of the cashier’s check, but there was little he could do about it. He closed his account that afternoon—a loyal customer who had been burned by his bank. The person who had sent the check, e-mailed and asked where the balance and title were. My friend told them that since the check was deemed counterfeit, he had contacted the FBI and Secret Service. He was able to sell the car a few weeks later. He didn’t hear back from the mysterious customer again.
The bank had been told of the doubts about the check. The bank had verified the check—said the check was legitimate—and recommended it be cashed twice. The customer cashed the check, per the bank’s recommendation. The check turned out to be bogus.
My questions:
Was it ethical or appropriate for the bank to try and reclaim the money from their customer’s account, given that he had taken precautions about the cashier’s check and deposited it in good faith at their recommendation?
The actions of the bank are questionable at best—at worst, unethical and illegal—given the customer’s initial misgivings and the reassurances the bank had given the customer.
Would you use this bank, given how they acted in this instance?
One would have to think twice about using this bank, given the circumstances above.
Would the bank have refunded the customer’s original balance if the possibility of a local television news report on the incident hadn’t been present?
Given their initial actions, it is improbable the money in the customer’s account would have been returned if extenuating circumstances hadn’t been present.