Honest Virginia man rectifies $1.8 million bank error

Nov 26, 2004, 12:29 pm

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Last week, Mike Kainrath opened his mail and found a notice from his bank: We credit your account $1,789,830.61.

Some people might start jotting a wish list: pay off mortgage, start (and finish) taking care of the childrens college, buy a new car.

Kainrath had only one thought: Oh, no!

Not again.

Kainrath, a Suffolk resident and marketing research manager at The Virginian-Pilot , got a similar notice two Novembers ago when his checking account was credited with $2,700. In April 2003 , it happened a second time, an extra $115,661 had been wired into the account.

Then, on Nov. 17 , he got the paperwork for the biggest amount yet. Was it really there? He called the automated number for the Bank of New York , where he has kept an account since moving to Hampton Roads four years ago.

You have a current available balance of one million, eight hundred thousand and... the voice said.

He saw that the transfer had taken place on Nov. 12 , but as with the other two mistaken wires he had to phone and notify the bank.

Kainrath wanted the mistake fixed quickly. He called the main number and said he wanted to find out about some money misdirected to his account.

Go ahead, the voice on the other end said, sounding bored.

Kainrath gave his name and account number and heard the woman type it in, then hit what he thought was the key that popped up his information. Her tone changed.

Oh , how can I help you?

The money, according to Kainraths notice, was supposed to be transferred between a different bank in New York and one in the Netherlands Antilles . Kainrath wanted it out of his account as quickly as possible if it was some sort of money-laundering scheme, he didnt want a man showing up at his house looking for the payoff.

Still, he did have some fun with the bank error. He played the automated recording about his available balance for several co-workers. He showed his account statement to someone else, told her he had won the lottery and would be quitting soon. He fantasized about paying off his mortgage, paying off the mortgages of his family members, taking care of college for his two daughters. And he wondered:

That whole weekend, Im walking around as a millionaire, he said. What would happen if something happened to me?

Where would his wife have thought he got all that money?

But the phone call took care of his problem.

Kevin Heine, spokesman for the Bank of New York, said that sooner or later the error would have been caught when banks reconciled their transfers to each other. The money should have never gone to the Bank of New York, he said.

Kainrath is going to take care of one other thing next time hes in New York, just in case another huge sum lands in his account again, even for a few days.

Im going to change it to an interest-bearing account.

Virginian-Pilot

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jim695

Columbia City, Indiana
United States
Member #3034
December 9, 2003
381 Posts
Offline

Posted: November 28, 2004, 6:39 pm - IP Logged

Actually, a good case could be made if Mr. Kainrath wanted to keep the money.

According to the story, the same bank made the same error at least three times in two years. This establishes a "history of willful intent," which implies that the bank has demonstrated either a willful desire for Mr. Kainrath to be paid extra money, or that, through their repeated negligence, the bank is liable for its own deficit, since there was no fraudulent intent on the part of Mr. Kainrath.

I went through a similar situation with Sprint a few years ago, although the amounts in question were vastly different. Sprint has a bad habit of losing customer payments. The first two times, I wasn't upset about it. "These things happen," I told myself. I succumbed to their demands and faxed them copies of my canceled checks. My bank charged me three dollars for copies of each of my checks, and another four dollars each to fax them to Sprint (back then, I didn't have a fax machine at home; few people did). It took about two months each time, but my account was dventually credited (the second time this happened, they disconnected my service, and then charged me a reconnect fee of $35.00).

When it happened a third time, though, I refused to furnish them with proof that I had paid my bill, and suggested that, if they couldn't keep track of their customers' payments, maybe they should start a lemonade stand and leave the telecom industry to those who know how to run it.

When they threatened to sue me, I told them to go ahead; I thought it was an excellent idea. They explained that, if I lost, I would also be liable for their legal fees, to which I countered, "Yes, but if I win, you'll be liable for mine." I went on to explain that I would be happy to show my canceled check to a judge, but that if Sprint wanted a copy of it, they'd have to pay me the $49.00 I was out for the two previous checks and the reconnect fee, plus the three bucks I had paid to get a copy of the last check, plus the four dollars it would cost me to fax it to them. "Don't be ridiculous," the woman told me (her exact words), "we're not going to pay you $56.00. You owe the money, and if you don't pay us, we'll sue you and disconnect your service." Our conversation ended there.

I went to my county seat, spoke with a judge, and obtained an injunction, which prdvented Sprint from disconnecting my service for ninety days, even if I didn't pay my current bill (I continued to send my payments). Within a week, I was served with papers to appear in court; Sprint was suing me for non-payment, but my injunction was still in force.

To make a long story a bit shorter, I took all my copies and receipts with me, gave the folder to the bailiff, who handed it to the judge. Six minutes later, the case was dismissed. The judge chided me for not filing a counter suit, for which I could have been paid damages. He couldn't award me the money I had spent, but he did hold Sprint liable for court costs and fees. Unfortunately, I hadn't hired an attorney; I don't like to deal with lawyers unless I absolutely must, and I correctly assessed that I didn't need one screwing up this case. Had I retained a lawyer, I'm sure we wouldn't have finished in six minutes.

Lessons learned. If you're being sued for anything, find a counter claim and file it. I could have gotten my money back and been awarded punitive damages, too.

Okay, so the two situations aren't that similar; so sue me, if you dare. The point remains that Mr. Kainrath could have made a demonstrable claim to the money, had he wanted to do so. He may or may not have won, but when people or corporations continually make the same mistake over and over again, they generally get what they deserve. In this particular instance, the bank has no business, apparently, handling large sums of money.

Maybe The Bank of New York should get out of the business and start their own lemonade stand. Of course, then we'll have to worry about the two entities merging and forming another conglomerate (Sprint of New York's Big Apple Lemonade, Inc.). In no time, they'll be losing payments and giving money away again.

Come, Pinky; we must prepare for tomorrow night...

Jim

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Honest Virginia man rectifies $1.8 million bank error

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