She should give the bank one more call Tuesday. If they still don’t don’t fix it she should shunt the money to a savings account somewhere else, don’t touch the principle for at least a couple of years, skim the interest. If the bank says something give them the money back, if 2014 or 15 comes around and they still ain’t said anything it’s her money.
I don’t have any experience, but it seems to me the simplest course of action is to contact her company. They will be motivated to correct the error, and chances are will have the resources / expertise to execute whatever process needs to occur in order to make that happen.
Don’t move the money anywhere. The bank will fix it and she needs to keep records of who she talks to and when she talks to them. It would also be a good idea to talk to her employer just so they can’t say that she didn’t.
Keep documents and call logs? There will be IRS notification and also contact whomever does her taxes, if she uses a CPA? Paperwork is her best defense and everything should be saved to verify it? It will be on her to prove it was not her error? I am not a tax advisor, nor am i representing one, just giving my two cents. Please do your own due diligence and proceed accordingly.
Tell her not to touch the money! But she should let her employer know whats going on & that the bank has been contacted.
She should still notify her company's HHR and accounting departments of the bank error and concerns she has about it. The company will of course contact their bank to ensure that the check is honored only for the amount it is written for.
In the meantime, she should be prepared for bounceback on her account. The clearance center may place a ‘hold’ on the check, debiting the full amount out of her account (including the million dollars the bank ‘corrected.’) She should assume that there is no money in that bank account for right now, and if you're in a financial situation to assist, provide her with temporary funds to tide her over until the error is corrected.
She should be prepared to answer questions from her company why she waited so long to notify them of the problem as well.
She should report it to her boss, and if the bank is still stupid, it might make sense to show the error to the prosecutor, in case the bank gets “embarrassed” and decides to put the blame on her. The banks have audits, so the loss will be discovered. A teller once gave me $200 too much. When I called to report the error, the teller told me they were getting ready to call me. This was within a couple hours of my cashing a check. Honesty is always best, even with stupid banks.
I went through the same thing with a smaller amount. Bank personel are rather arrogant about their jobs. They kept telling me that it must be an error on my part. I had to go to the bank and go through the account with them item by item and it still took them a bit to figure it out.
I would place the money in an escrow account just be sure, and make sure EVERY communication is recorded like say...sending them an e-mail to BOTH banks and company that “I have or plan to place the large amount in an escrow account as it is not mine”.
Make sure everything is black and white and recorded in case the IRS come knockin’. Protect yourself.
Do absolutely nothing. Do not touch the account, do not withdraw nor deposit funds to the account. Ten working days after that deposit has been made, if the money is still in her account, the money is hers. That is black-letter law.
This is one reason why I don’t have direct deposit. Plus, I’m self employed.
The savings account is not likely any more safe than checking.
If she has direct deposit, her employer can automatically remove the funds. If not, they will come looking for it.
She needs to notify the bank and her employer. If she is very worried, write a letter of notification and have the bank manager sign it, ditto with her HR director.
After she does that, I think she is fairly clear of liability.
Tell your daughter to withdraw the money (in small unmarked bills) and send it to me. I know just how to correct the mistake and clear this all up.
OK, seriously, keep detailed records of everything done to return the money. DO NOT move the money around. They'll figure it out soon, and she doesn't want to give anyone the impression that she is trying to obstruct the return of the money.
If they don't correct the problem soon, consider getting a lawyer to handle it. It sucks that she (or you?) might have to pay for a lawyer when it isn't her fault, but I would feel much better having a lawyer representing my interests in a situation like this.
I would check to see if there was any way you could turn your daughter in for some kind of reward.
I would notify the bank and the company in writing, registered mail, asking them to sort it out.
Don’t touch the funds.
She needs to work with her employer on this, namely the payroll and/or accounting departments. Her direct supervisor (boss) may want all conversations to go through them or may want her to just talk with corporate herself.
Her employer, like every large company, will need to reconcile at the end of the month. If the pay week was partly in September, they also will be reconciling a Quarter-end, as of 9/30/2011. Part of this will be reconciled for 10/31 month end (the bank reconciliation).
Reconciliation needs to be between payroll and G/L, and payroll and cash (for the net pay). Also, the company will transmit payroll data to the Federal and State government probably every week or at least every month. This needs to be reconciled with the payroll data they have on file, i.e., what they send to the Federal and State governments needs to match their records.
If the check was correct but the bank cleared it for the wrong amount, only G/L Cash and Payroll Net Pay will not agree; it will also be a reconciling item on the monthly bank reconciliation.
This will require people at her employer to work on cleaning this up. She may actually have to write a check to them to give them the money back, since an electronic withdrawal is designed for regular payments, not one-time payments, i.e., it requires authorization. Her check would necessitate an oddball accounting entry being made to accept it and set things right.
Of course, if the check was made out for exactly the correct amount, and she were to return the excess funds by making out a check for the total minus the exact net pay she was to receive, then she will not need have another pay check cut - and all will be done with all the reconciliations in payroll; only the bank rec will have a reconciling item. This is by far the easiest route because Federal/State 941 (quarterly payroll), i.e., all payroll records will stand correct as is.
This may take accounting and payroll some time to get it right; I’d say be patient and cooperative but keep calling corporate payroll and / or accounting all the time to get it resolved so it does not fall between the cracks. Who knows, they may try to “fix” the check by reversing it or something.
If the check was for the wrong net pay amount, then, of course, there’s fixing in payroll to do, which must then be adjusted in government reporting and in G/L.
Keep a careful record of every communication, including voice, email, paper letter, etc.
I like to start at a high level as such issues receive much better attention and get resolved with much less pain.
IMHO...
Leave it in the account. Pretend it is not there. Eventually, the bank will figure it out and draw it back out.
Regaring my prior post, bank reconciliations are done by a department in the company usually called something like Treasury or Cash Management.
Many companies use a banking feature called positive pay for paper checks; it’s an electronic file of the payments which the bank is supposed to verify when honoring checks they cut. Since it looks like her employer’s bank honored the check, if they use positive pay, the file had that amount in it. Maybe they don’t use postive pay. If the pos pay file was correct and the bank honored the wrong amount, her employer may not be liable for the difference, their bank may have to eat it.
I have been through this before. Now that the check has been deposited your fastest route to correction is often going to the payroll department / accounting and asking them to withdraw the excess funds.
Ok, just kidding. Just don't spend it and get it squared with the bank. Maybe don't call but go in and find a manager who maybe went to grad school or at least has an above room temp IQ.