Check Sent To Wrong Bank & Trying To Recover Funds

FAR | Apr 8, 2017 | 113 posts since 2013

Using the pay bill feature at BB&T bank I sent a $5,000 payment from my BB&T checking account to my Cit savings account. The check was made out correctly by BB&T but somehow got directed to JPMorgan Chase and they cashed it. I do not have an account at JPMorgan Chase. I contacted Chase and they said a claim to recover the funds has to be initiated by BB&T. I contacted BB&T and they said they do not call other businesses to initiate requests.

What can I do to get the funds back from Chase?

This happened the end of January so Chase has had the money for 3 months. What happens when a bank receives and cashes a check with no place to put the funds?

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Answers

me1004 | Apr 8, 2017 | 1,379 posts since 2010

I have never come across that situation nor have I researched the law on it. However, here is what I would think/hope, but it might be undermined by who knows what laws and regulations.

You might want to, and I suspect might even have to, first file a complaint with the appropriate banking regulator -- there is a post here that will tell you which one it is for those banks. File against both banks. I hope you have exchanges with them documented, and you should do so for all future exchanges, and in those even reference the previous contact about this issue. I would have to think that will solve the matter and get you your money back, but it might take a couple months, so get that started immediately by filing that online this weekend.

Other than that, and certainly if that does not solve the issue, from what you say, BB&T is the one who screwed up, sending the money to the wrong place despite your correct instructions. So, they are liable. And if they don't want to lift a finger to do anything about throwing away $5,000 of your money, sue their as%%es off. They will be liable not only for the $5,000, but for serious damages, especially exacerbated by their conduct of refusing to do anything about it. I can see very big punitive damages for that. And this possible lawsuit gives you very serious leverage even today -- use it, go up the ranks, demand to go beyond simply supervisor or branch manager to the executive office -- and let them know that you get your money back immediately or they will be subject to very serious punitive damages in addition to your money. (And frankly, no lawyer will even take the case on contingency if they are not sure of getting at least $15,000, although I expect you could get notably more for such egregious and flagrant improper conduct by the bank.)

You can also sue JP Morgan Chase similarly, and with them so clearly knowledgeable and notified that they are holding money that is not their's, is your's, I would expect some nice punitive damages would come from them too. While JP Morgan Chase did not make the mistake of sending the money to the wrong place, they cannot keep it, especially now that they have been informed of it. It might have been sent by BB&T bank, but it was sent as FROM you, and they know that. It seems to me that if it came in as a check, it was designated for someone else and so should have been bounced and returned, but they chose to simply keep it and prevent you from doing anything about it, they said doing anything about it is up to someone else even though you are the one at a loss.

So, file with the regulators. And use this information as leverage to get action from them today, rather than in two months after hearing from the regulators.

Bozo | Apr 8, 2017 | 1,375 posts since 2011

Have you looked into small claims court? Do you have binding arbitration with BB&T? Sue Chase in small claims for conversion (that's the name of the tort); no lawyers needed or allowed. File for arb with BB&T on a negligence theory. Odds are, just the initiation of the actions will be enough to "encourage" the banks to resolve their joint errors.

PS: You might find a small claims conversion action against Chase cheaper (and easier to prove) than filing for arbitration against BB&T on a negligence theory. The filing fee in small claims is generally modest; the same cannot be said for the filing and arbitrators' fees in arbitration (which is why banks love arbitration). Feel free to PM me if any questions.

me1004 | Apr 9, 2017 | 1,379 posts since 2010

Bozo, the serious issue with going to small claims court is that then you are definitely in court -- but it won't stay in small claims. The bank can and will have the case removed to regular court, because they are not going to deal with any court matter without an attorney, and then you better start bleeding money to a good lawyer, the very thing you were trying to avoid by going to small claims. Besides, in order to go to court, you first must exhaust all administrative remedies, such as the banking regulators. And, I expect there will be various legal surprises about all kinds of things, in particular regarding jurisdiction.

Bozo | Apr 10, 2017 | 1,375 posts since 2011

me1004, I merely wanted to alert OP to his or her options. I might respectfully disagree with the exhaustion of administrative remedies you raise. To my knowledge, exhaustion of administrative remedies is not an affirmative defense in conversion actions. Conversion is an extremely simple case to prove up. The burden of proof on "exhaustion" would be on the defendant, who would face a preliminary threshold of showing an administrative remedy was possible, then an additional threshold that same was required as a condition precedent to the filing of suit. Plainly stated, you don't have to go to the cops (or regulators) and file a police report as a condition precedent to suing for conversion.

As for your comment "it won't stay in small claims court", a small claims action can only be appealed to Superior Court (at least in California) after a judgment. The case is then tried "de novo", and the loser faces all sorts of downside risk. The Superior Court, should it sense a frivolous appeal, may hammer the losing side with additional damages not awarded by the small claims court. Conversion is an intentional tort. A particularly irritated Judge in the trial "de novo" could easily slap the losing party (presumably the bank, the "converter") with punitive damages. Were I counsel to the bank, I would not go down this road.

Venue and jurisdiction are interesting issues, but not too troubling. Chase has branches just about everywhere. Accordingly, jurisdiction is probably not an issue. Venue might be more interesting, but could be "plead around", by alleging the conversion occurred on the initial transfer.

Sylvia | Apr 9, 2017 | 389 posts since 2012

FAR, to whom did you direct your complaint at BB&T? BB&T should have published procedures for correcting errors. If there are none or you followed what's been communicated to no avail, I suggest your state attorney general. Mine has a consumer protection unit. Yours likely has something similar. Common sense says your bank should have promptly made you whole. How they recover those funds from Chase should not be of concern to you. Good luck.

Bozo | Apr 9, 2017 | 1,375 posts since 2011

Sylvia, my main concern with going to a state attorney general or the Feds is bureaucratic lethargy. I suspect both will regard this as a civil dispute, with reasonably simple civil remedies.

Just my $.02.

Sylvia | Apr 9, 2017 | 389 posts since 2012

Bozo, my state AG makes a big deal of going to bat for residents victimized by fraud, deception and unfair practices. Staff members appear regularly at consumer fairs, big and small, spreading the message of how their office can be our advocates. If FAR has done everything s/he can, BB&T’s offense can be perceived as fraud. Remember, state attorneys general played a big role in securing the $25 billion national settlement with the largest mortgage servicers in 2012.

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