Topic: Business & Commercial

When Stupidity Trumps Honesty: The Bank, the Money, and the Starbirds’ Dilemma

I once had an argument with a nasty 7-11 clerk, who adamantly insisted that the change on a fifty cent payment on a forty-eight cent charge was one cent, not two. A few days later the same clerk gave me fifty cents too much, and again, refused to admit or believe that she was in error. Finally, I just accepted the money and left. I decided that I had met my ethical obligation by flagging the mistake, but that I was not obligated to battle an intransigent moron forever to correct it.

So I am very sympathetic with the plight of Herbert and Becky Starbird, a retired couple from Altoona, Pennsylvania, who were unsuccessful in their efforts to convince the First Commonwealth Bank that it had mistakenly deposited $280,000 in their account. The bank, who may well have hired that 7-11 clerk, adamantly refused to admit its mistake, so finally Herbert and Becky gave up. And began spending the money, $177,000 worth.

Now the bank has figured out that the Starbirds were right, and it wants its money back. Not surprisingly, the law governing mistaken bank awards doesn’t include a provision that when a bank is so inept and arrogant that it refuses to accept the errant funds when the recipient offers them, it has waived the right to get its money back. But it should. Why should the Starbirds have to hold on to a large amount of money some former 7-11 clerk deposited in their account, once their efforts to return it have been rejected? Why should it be their responsibility to keep the bank’s money safe, when the bank not only deposited it in the wrong account, but refused to take responsibility for its error?

The bank is actually suing the Starbirds for the full amount. Shame on the bank. It was at fault and made the initial error; it rejected the efforts of honest people to address that error, and now is playing the role of the victim. The bank has the law on its side, but it left ethics behind long ago.

What the bank should do is accept what is left of the money as full payment of the Starbirds’ obligation, and accept responsibility for the losing the rest. It should apologize to the Starbirds, thank them for their honesty in making a good faith effort to return the funds, and apologize for hiring employees who are incompetent fools. That would be the ethical approach, and the right, fair, and generous way to treat two honest people that the bank’s incompetence placed in an ethical and legal dilemma.

Instead, the bank wants to go to court. I, for one, hope that the Starbirds take their tale in front of a jury, which may well decide that the law shouldn’t penalize people like them when financial institutions make dumb mistakes.

But their lawyer better keep 7-11 clerks off of the jury panel.

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