AboutMike Weikle Expertise Banking Lender Liability; Insurance Coverage; Consumer Rights; Bank Fraud; Criminal: White
Collar Crime; Fair Debt Collection Practices Act; Directors and Officers Liability
Experience Commissioned National Bank Examiner 7 years; President of Two Community Banks; Division Claims Specialist for American Bankers Association Sponsored Insurance Program; Carter Member of the Bank Fraud Team of the Office of the Comptroler of the Curency "OCC" (National Banjk Examiners); Attorney previously representing FDIC and Resolution Trust Corporation as well as consumers and commercial borrowers in claims against the banking industry; Former Data Processing Systems Examiner for the OCC; Expert Witness on variety of banking issues in both state and federal court.
Education/Credentials Certified Public Accountant;
JD -- West Virginia College of Law - Order of the Coif
Data Processing Training Old Dominion Bank and IBM
My wife and I have a pretty basic question. How can a company go into a person's checking account and do a bank draft for a withdrawal for money that is not there?
About a month ago we spoke to a rep from one of our credit cards and authorized them to do a one time draft for $250.00 on Jan 15th, 2009 which they did. Two weeks later on Thursday, Jan 29th we found that they did another bank draft for $650.00. Now, we did not have $650.00 in our account on that date and the bank let them take the money anyway which put us in overdraft status. Since that date my wife and I have been back and forth with the bank and the credit card company and have gotten nowhere. My wife called me about 45 minutes ago and said that this credit card company just did another bank draft for $650.00 thus leaving us in the hole $1300.00.
My main question here is, if there is no money in the account, how can the bank let anyone take it? If one of my clients wrote me a check for $500.00 and I went to their bank to cash it and they only had $240.00 in their account, the bank would not cash that check for me. What is the difference here? We live in Connecticut.
Thank You,
Paul and Fran
Answer Hi Paul and Fran,
Your issue is not really with your Bank. I expect the credit card company represented to your bank you authorized a draft in the amount of $650. If your bank paid the draft against an overdraft line of credit issued to you and Fran, you have no complaint against them. Even if you did not have overdraft protection, your bank apparently felt you were credit worthy. As such, your bank paid the check to protect you from the embarrassment of having a check returned for insufficient funds. So, I don't think your Bank did anything wrong if it acted on the basis of a representation by the credit card company.
As one remedy, you can tell your bank you did not authorize any draft against your account in the amount of $650 and direct your bank to return the draft as unauthorized. The Bank should then demand the credit card company to present written evidence the payment in the amount of $650 was authorized.
Also, you need to write, fax or email the credit card company a demand they return the $650 to your account. If they refuse, you have at the very least a valid conversion claim. If they had no authority to charge your account $650 in the first place, the credit card company has committed a fraud on you and your bank. As such, the credit card company may owe you damages for fraud or conversion and you may also be entitled to recover punitive damages and possibly attorney fees.
Please e-mail me directly at mikeweikle@weiklelaw.com, and I will give you my phone number to call me directly. If I cannot take the case for whatever reason, I will make an effort to put you in contact with an attorney that practices law in your state of residence.]
