Bank found error after 6 years, IRA given to wrong beneficiary because bank failed to file change of beneficiary form, bank takes funds from wrong beneficiary account & puts in correct beneficiary account. Should bank be liable for damages as a result of their error?

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Originally Posted by Terry Pope

Should bank be liable for damages as a result of their error?

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Hello T:

Sure.

excon

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Originally Posted by Terry Pope

Bank found error after 6 years, IRA given to wrong beneficiary because bank failed to file change of beneficiary form, bank takes funds from wrong beneficiary account & puts in correct beneficiary account. Should bank be liable for damages as a result of their error?

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Was the change of beneficiary form properly filled out and duly delivered to the bank?

Does the bank offer any sort of excuse?

Yes, the change of beneficiary form was filled out in the presence of the bank's attorney & witnesses by a bank trust officer but was just never filed. The bank admits it's error but is only wanting to refund admin fees & our attorney fees and refuses to consider the effects on my financial situation of making all my financial plans @ decisions for over 6 years based on having $380,000.00 more than I actually had @ which they have now taken from my account. The bank ignores all mention of breach of fiduciary, detrimental reliance and other legal issues and just denies that I have damages. It appears that this is unprecedented and two attorneys are baffled at what to do. We are waiting for a ruling from the OCC but the deadline for filing a lawsuit is Nov. 2012 & I don't know if it will come back in time.

I am just grasping at straws hoping someone will know something about this apparently unique situation. I've been told to not sue the bank... that they will win.

Under the law... if you received money you should not have received by a financial institution like a bank... they are under their full right and responsibility to take it back when the error is discovered. And are actually obligated to get it to the correct person under the law..

While its unfortunate that you actually believed it was yours... the reality is it wasn't. Particularly with such a large sum of money.

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Originally Posted by Terry Pope

consider the effects on my financial situation of making all my financial plans @ decisions for over 6 years based on having $380,000.00 more than I actually had

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Were you aware that the account holder had changed the beneficiary? How did this come to light after 6 years?

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Originally Posted by ScottGem

Were you aware that the account holder had changed the beneficiary? How did this come to light after 6 years?

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No I had not been told it had been changed... my mother had it in my name only for 15 plus years & apparently changed it to my niece being cobeneficiary in Nov 2004, then she died in July 2005. My niece didn't seem to know about the change either... she did not mention at the settlement of the estate. I have not spoken to her since 2008.

What would have happened if I had spent all the money? Would I have been put in jail for the bank's mistake? For spending money that I was told I had inherited free & clear for 6 years? It is just happenstance that the money was still in their bank & so freely available to them... trusting them was my only mistake? If this is right then all inheritors beware... don't feel free to spend your inheritance because even after as long as 6 years or more if the bank happened to make a mistake you will have to pay it back. Does that really seem fair?

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Originally Posted by smoothy

Under the law...if you recieved money you should not have recieved by a financial institution like a bank....they are under their full right and responsibility to take it back when the error is discovered. And are actually obligated to get it to the correct person under the law..
What would have happened if I had spent all the money?Would I have been put in jail for the bank's mistake? It is just happenstance that I still had it in their bank for them to have easy access to.
While its unfortunate that you actually believed it was yours....the reality is it wasn't. Particularly with such a large sum of money.

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You didn't answer the question of how this came to light?

I can understand your point, but it is not supported by the law.

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Originally Posted by ScottGem

You didn't answer the question of how this came to light?

I can understand your point, but it is not supported by the law.

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I just spoke with the trust officer at the bank and she said it was found randomly in an incorrect file.
So is it the law that I would have been sued & possibly gone to jail if I couldn't pay back the money?
Thanks for replying.

Yes you could be sued for the money, but people don't go to jail for owing money. Their assets may be seized or wages garnished, but jail doesn't happen unless some sort of fraud has been committed.

You say you have an attorney working on this for you - what is his/her guidance on whether you have a case to sue the bank?

I have had 2 attorneys so far, neither of which could find a precedent for this situation. We have filed a complaint with the OCC in Feb 2012 but have not gotten a ruling and no indication of when we will get one. This error was found in Nov 2011 & we only have a year to file suit so our time is short. No one seems to know what to do... I just don't see how a person could lose their property or their income due to the bank being the only wrong party in the error. What about detrimental reliance or breach of fiduciary?I actually paid them to be the Trustee and to do their job correctly. So I lose when they mess up? I spent money based on the bank statements they sent me for 6 years and if I had not had it left they could have sued me? For what? I had no way to know that their info was wrong.iIUOTE=ebaines;3245763]Yes you could be sued for the money, but people don't go to jail for owing money. Their assets may be seized or wages garnished, but jail doesn't happen unless some sort of fraud has been committed.

You say you have an attorney working on this for you - what is his/her guidance on whether you have a case to sue the bank?[/QUOTE]