Category: Mistaken payments

A trillion here, a quadrillion there …

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| General, Mistake, Mistaken payments, Restitution

1 to one quintillion… and pretty soon, you’re talking real money (to rework Senator Everett McKinley Dirksen’s apocryphal remark).

The last time I blogged about Citibank, it had made a mistaken overpayment of nearly US$1 billion (their restitution claim was successful on appeal). The same post noted another bank’s mistaken overpayment of US$50 billion (the payee co-operated in the reversal of the transaction). These are staggering numbers. But they pale into insignificance beside a Citibank overpayment in the Irish Times today:

Citigroup erroneously credited client account with $81tn in ‘near miss’

Citigroup credited a client’s account with [US]$81 trillion (€77 trillion) when it meant to send only [US]$280, … The erroneous internal transfer, which occurred last April and has not been previously reported, was missed by both a payments employee and a second official assigned to check the transaction before it was approved to be processed at the start of business the following day.

A third employee detected a problem with the bank’s account balances, catching the payment 90 minutes after it was posted. The payment was reversed several hours later, … No funds left Citi, …

The Guardian put the figure in context:

Citigroup credited client’s account with $81tn before error spotted

US bank meant to send $280 but no funds were transferred despite ‘fat finger’ mistake

… A transaction of [US]$81tn (£64tn) would be so huge that it would be unlikely to go through any bank’s systems.

…

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An overpayment into your bank account is not money for nothing; an overactive ATM does not dispense free money

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| Mistaken payments, Restitution

Cial logoMuch and all as it is fashionable to complain about Google now, sometimes the algorithm gets it just right. Over the weekend, my feed served me this headline: Man who was accidentally paid 330 times his salary quits and disappears (Unilad, 19 July 2024). Perhaps it is not my usual sort of news source, but it is certainly my usual sort of news – it is another example of mistaken overpayments on which I have regularly commented on this blog. As I have observed in that context, many have often adopted the approach of one of the white mice (who were, in fact, hyper-intelligent pan-dimensional beings) in Douglas Adams‘ The Hitchhiker’s Guide to the Galaxy (1979): when faced with a choice between doing the right thing, “and on the other hand just taking the money and running, then I for one could do with the exercise”.

That is precisely what the overpaid employee did here. A Chilean meat-producer, Consorcio Industrial de Alimentos (Cial), sent a payment of CLP$165,398,851 (€160,283) to him, instead of his usual salary of CLP$500,000 (€485). It is a bizarre amount of overpayment; usually, a payment is made twice, or additional digits are added to a payment; but there is no obvious connection between the amounts of the salary and the overpayment here; it may be that the larger amount was meant for another account, or that somebody just entered a wrong random number.…

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Another Tale of Two Toms – Restitution of Mistaken Payments, and Interceptive Subtraction, again – updated

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| Mistake, Mistaken payments, Restitution

Toms: Holland/er

Actor Tom Hollander (imdb | wikipedia | image source) told an anecdote to Seth Meyers on the Late Night tv show (geoblocked NCB clip | YouTube clip), about when he received a bonus payslip meant for actor Tom Holland (imdb | wikipedia | image source). At the time, the two actors shared an agent, who obviously mixed up his own clients, so it’s not a surprise that the rest of us do too. For example, after the casting of Captain America: Civil War (2016 | imdb) was announced, I thought it was a brave decision to have Mr Collins play Spiderman! Hollander’s story relates to one of Holland’s subsequent outings as Spiderman. Hollander told Meyers that he got an email containing Holland’s first box office bonus payslip for The Avengers: Infinity War (2018 | imdb). Hollander said that it was for an “astonishing amount of money”.

Writing in The Guardian, Stuart Heritage commented that this is “a nice little insight into the world where there are too many famous Toms with similar surnames”. Indeed, not only are there too many Toms with the same surnames, sometimes they receive each other’s money, not merely the payslip.…

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Couple mistakenly paid Aus$10.5m by Crypto.com claim they thought they had won a contest

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| Mistaken payments, Restitution

Manivel & Singh via 9news.com.auA little while ago on this blog, I noted the mistaken payment case of Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 (26 August 2022). It has been a recurring theme of my notes on these kinds of cases that the recipients of mistaken payments not only must make restitution of those payments, but also that they run the risk of criminal prosecution. Now comes the unsurprising news that the key recipients of the money at issue in Foris v Manivel have indeed been charged with theft:

Couple mistakenly given $10.5m from Crypto.com thought they had won contest, court hears

Money from crypto exchange was allegedly used to buy four houses worth $4m, vehicles, art and furniture, police officer tells court

A Victorian woman accused of theft over a $10.5m mistaken cryptocurrency refund has been released on bail as she awaits trial, despite claims she allegedly tried to flee the country. Thevamanogari Manivel and her partner, Jatinder Singh, appeared by video link from prison in Melbourne magistrates court on Tuesday when they were committed to stand trial on theft and other charges. …

The Crypto.com account was in Singh’s name but the transfer may have been sent to Manivel’s account as he used her bank card to buy cryptocurrency, the court heard.

…

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Restitution of mistaken payments, again: Chase quickly recovers $50billion; while Citibank eventually recovers (a mere) $500million, defeating defences of “discharge for value”

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| Mistaken payments, Restitution, Restitution, Subrogation

RepaymentIn my previous post, I looked at Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 (26 August 2022), in which cryptocurrency trading platform Crypto.com accidentally transferred Aus$10.5m [€7.35m; US$7m; St£6.3m] to an Australian customer when processing an Aus$100 [€70; US$67; St£60] refund, by mistakenly entering her account number into the “payment amount” field. Elliott J held that part of the proceeds could be traced into a property gifted by the customer to her sister, who held the property on trust for the payor.

In this post, I want to look at two other computer-enhanced mistakes. The first is almost unbelievable:

Dad becomes 25th richest man in world after €45 billion lands in account after bank error

A family were made multi billionaires when a banking mishap saw [US$50 billion] €45 billion deposited into one lucky dad’s account, momentarily making him the 25th richest man in the world. … [He] was alerted to the huge sum by his staggered wife, …

The dad-of-two, from Louisiana in the US, … admitted to what had happened and arranged for the money to go back to its rightful owner. … When he alerted [his bank] Chase, they immediately began work to get the funds back, but never said where the money came from, or how the error came about.

…

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Fortune favours the brave, but not the foolhardy – recipients of mistaken payments must make restitution, or face the consequences

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| Mistaken payments, Restitution

Oops key on keyboard, via Flickr (modified))To err is human, but to really foul things up requires a computer, so we are told. And it gets really dreadful indeed when computer buzzwords like “crypto” get included. And so it is with cryptocurrency trading platform, Crypto.com. In May 2021, it accidentally transferred Aus$10.5m [€7.35m; US$7m; St£6.3m] to an Australian woman, Thevamanogari Manivel, when processing an Aus$100 [€70; US$67; St£60] refund. Although computers were involved, the problem was plain old human error: Manivel’s account number had been accidentally entered into the “payment amount” field. Worse, they failed to notice the error until the following December, seven months later, by which time much of the money had already been given away to six other family members or spent on various luxury purchases, including an Aus$1.35m [€945,000; US$900,000; St£810,000] home in Craigieburn, Melbourne, for her sister, Thilagavathy Gangadory. [Update: Crypto has company – a Texas bank made the same mistake to deposit US$37m in a customer’s account; but, unlike here, the Texas customer alerted the bank and returned the money].

Gangadory Craigieburn propertyThis sounds like a classic exam question, but it is in fact the scenario faced by Elliott J in the Supreme Court of Victoria, Australia, in Foris GFS Australia Pty Ltd v Manivel [2022] VSC 482 (26 August 2022).…

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Some practical perspective on the recovery of misdirected payments

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| Mistake, Mistaken payments, Restitution

Chips, via WikipediaI’ve written quite a bit on this blog about payors’ rights to recover mistaken payments from recipients. However, a column in today’s Irish Times makes an important practical point about it. A client of bank who had sought to make a payment of €20,000 into his daughter’s account in a different bank. He had the right details, but the payment never arrived in his daughter’s account. Dominic Coyle dispensed his usual sage, common sense, advice, and the banks are now being helpful, so the enquirer and his daughter will probably track down the money. Meanwhile, Dominic added, almost en passant:


By the way, not that it is relevant here, in cases where there has been an Iban error on the part of the person making the payment, repayment will be requested from the inadvertent recipient. However, I am told, somewhat surprisingly, that that depends on the recipient agreeing to the repatriation of the funds. Otherwise you’re apparently looking at legal action which could make your €20,000 look like chips.

So, he’s right that, where there is a mistake, the recipient of the mistaken payment must make restitution of the mistaken payment. However, he’s also right that, if the matter has to be vindicated in court, the costs could be prohibitive (even if, in principle, the costs should follow the event, so that the plaintiff would recover the mistaken payment and also be entitled to costs).…

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Mistaken payments and criminal liability – a cautionary tale from South Africa

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| Mistaken payments, Restitution, Restitution

I have warned many times on this blog (especially here, here, here, here, here, here, here, and here – with examples from Ireland, the UK, Australia, New Zealand, and the US) that the recipient of a mistaken payment not only has a duty to make restitution of that unjust enrichment but also faces potential criminal liability for theft if the payment is kept (and, worse, spent) rather than returned. A recent cause célèbre from South Africa provides another cautionary tale:

Sibongile Mani sentenced to 5 years’ imprisonment for theft of NSFAS funds

Sibongile ManiWalter Sisulu University (WSU) student Sibongile Mani [left] has been sentenced to five years’ imprisonment for theft relating to R14 million [€870,000] accidentally credited to her account by the National Student Financial Aid Scheme (NSFAS) in 2017.

East London Regional Court Magistrate Twanette Olivier found Mani guilty of stealing R818,000 [€51,000] of the funds.

She was only entitled to a R1,400 [€87] food allowance and was accused of failing to report when R14 million [€870,000] was credited to her account erroneously. She instead embarked on a spending spree. …

A little more background:

Key events that led up to the sentencing and appeal of NSFAS ‘millionaire’ Sibongile Mani

…
June 2017
A technical glitch led to funding administrative company Intellimali erroneously transferring R14m into Mani’s account.

…

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