Mystery man gets $16K windfall from accounting error
Trading company suing John Doe and applying for RBC bank to release his name
It was only one digit but it turned out to be one man's lucky number. Now a B.C. trading company is going to B.C. Supreme Court in a bid to take away a $16,323.50 windfall that came as a result of an accounting error.
According to documents filed in B.C. Supreme Court this week, one incorrect number on an electronic transfer of funds prompted a months-long saga to unfold between a trading company, RBC bank, and a man we only know as John Doe.
No information about John Doe is available, and it appears he would like to keep it that way — much to the chagrin of the Alebrije Azul Trading Company.
In the notice of civil claim, the company alleges Doe was the lucky recipient of the $16,323.50 windfall last June when an accountant at a brokerage firm unwittingly transferred the funds to his RBC account.
The company claims RBC approached John Doe on its behalf to return the funds, but he refused to do so.
And RBC says it can't release his name without a court order because of its contractual and legislative requirements.
The company is suing John Doe for "unjust enrichment" and has filed a notice of application to RBC to obtain his name.
CBC News was unable to reach the company for comment, and RBC refused to comment because of privacy concerns.
Similar cases worldwide
Transferring money into wrong accounts appears to be a global problem.
An Ontario judge described a similar case in 1995 as an "unusual mix of high comedy and financial tragedy in the normally bland worlds of banking and retail sales."
In that scenario, a bank clerk had unwittingly misplaced a decimal point while transferring funds to a company on the brink of bankruptcy, thus giving it $450,500 instead of $450.50.
The company promptly sent the unexpected funds to a creditor but eventually dissolved anyway, leaving one bank to sue another in an attempt to recover the money.
More recently, a 20-year-old woman in Lancashire, U.K. was sentenced to a year in jail in 2007 after she spent a £135,000 ($224,870 Cdn) windfall on a holiday, friends, and a new sofa.
And in 2009, a man in Cairns, Australia pleaded guilty to fraud after he spent $11,000 of the $55,000 that mistakenly landed in his bank account.
The 26-year-old man, who was jobless and had a wife and baby to support, waited a year before spending any of the unexpected funds.
"My family was about to be out on the street. I'd lost my job four weeks before, the bills had piled up, I was getting into debt and trying to dig myself out," Ronald Blaise Myors told the Courier Mail.
In 2014, The Guardian reported that some banks in the U.K. were changing their policies so they could directly access accounts to remove the misdirected funds.
Despite all these examples, Hasan Cavusoglu, an associate professor at the University of British Columbia's Sauder School of Business, says the issue isn't all that common.
"It happens, but I don't think it's common to the point of creating alarm," Cavusoglu said.
He said he can't speak to this specific case but noted that most banks know these types of mistakes can happen, which is why they ask the sender of the funds to provide the recipient's details like a name and address.
If the account doesn't match the provided details, the funds don't get deposited.
"In most cases it will be flagged by the recipient bank," he said, adding the bank sending the funds has the ability to check as well.
"It's not an automatic transfer. Even if it's electronic, there's some level of intervention that takes place."
Occasionally, however, mistakes slip through the cracks. Cavusoglu said it depends on the sending or receiving institution's level of protection or control mechanisms.
"It really depends on the bank and how regulated the industry is," he said, adding that most banks generally have controls in place.