Monday, December 28, 2009

Bank errors

Many people don't bother checking their bank statements because they trust their bank not to make errors. In my experience this is a bit optimistic. I check my statements and have found errors. In one case many years ago my bank failed to record a deposit. Although it was a fairly significant amount of money (2 weeks pay if I remember correctly) I might not have noticed if I hadn't tried to reconcile my statement.

I recently discovered another error. It is a bit annoying since it is too late to do anything about it and it cost me $100. I have been entering old data into Quicken and found in 2006 I apparently failed to add up several items in a deposit correctly. So the deposit was recorded as $100 less than it actually was and the bank failed to correct the error. Note simply checking that the balance on my statement agreed with my records was not sufficient to detect this error. I wonder whether it was the bank or the teller who received a $100 windfall.

Of course another reason for checking statements is to detect other problems such as erroneous or fraudulent credit or debit card charges or forged checks. I haven't encountered these but they seem to be fairly common.


  1. If that's the only mistake you made in your life, that's not too bad...

  2. I conjecture that the distribution of balance mistakes banks and other companies make is non-symmetrical, and biased towards the customer being the loser.

  3. Yes, people have less incentive to catch mistakes in their favor. In this case I suspect that the teller may have noticed my error but just paid themeselves an extra $100 (I was getting some cash back) instead of correcting me as they would have done if the error had been in my favor. This would have been made easier by a recent (in 2006) change in the receipts my bank provides. Instead of listing everything they now just gave the net deposit. At a minimum the receipts should specify the cash back which would make it harder for the teller to steal.