Employer Direct Deposited to Wrong Closed bank account

[justalayman]

The Account was closed in 2011.

How can an account that is closed recieve or distribute money? It can’t because it’s closed. The sender would recieve a notice that the account was closed and the funds would be rejected. I suspect it was deactivated it remained open due to the debt owed by you.

 

[justalayman]

Think about it? The employer deposited to a wrong bank account. One that no longer existed for the OP. Had that bank account never been the OP's the employer absolutely would have been liable. If would have been up to the employer to recoup the money from the bank.

The bank took advantage of that mistake and kept the money. There is a definite question as to whether or not the bank actually had the right to do so.

The employer properly replaced the money to the OP via a paper check, but now wants the money back from the OP.

Potentially, no one's hands are clean here. The employer because they made a flat out mistake, the OP's because he had an outstanding debt that had not been resolved, and the bank's because they may not have had the right to do that. (statute of limitations etc)

You are thinking about it from the employer's side and viewing it as the OP being paid twice, and that is perfectly understandable, but its just not that black and white. The employer made a flat out, and serious, mistake. OP needs to consult a locate attorney.

what makes you think any statute of limitations might be applicable? Sol’s apply to being able to sue a party for a debt. The debt remains a debt forever and is owed forever.

 

[LdiJ]

How can an account that is closed recieve or distribute money? It can’t because it’s closed. The sender would recieve a notice that the account was closed and the funds would be rejected. I suspect it was deactivated it remained open due to the debt owed by you.

It still should not have been able to receive or distribute money.

 

[not2cleverRed]

He isn't the only other one. Chyvan is bringing up the same points I am, but more specifically what the bank had to do to take the money.

And, its not a question of whether or not I think that the OP has to pay. Its my uncertainty just who did the most wrong here and therefore has the biggest liability. The bank very well may have taken money they were not entitled to get. The employer certainly made an egregious error. If the bank was not entitled to that money then the OP did NOT get paid twice.

I know what kind of liability comes with arranging direct deposits, because I arrange direct deposits of tax refunds on a daily basis...and just like every other organization out there we make the occasional error...its rare, but it happens. If we had made this kind of error, we would fight the bank tooth and nail to get the money back. We would consider it to be our error, our problem.

That's kind of what I've been thinking.

The employer made a mistake. The bank, however, is a bit dodgy on this one. The bank should be able to return the money to the employer - the employer didn't owe the debt, and the attempt at a direct deposit into a closed (or at least delinquent) account should have been flagged.

OP has not shared what the source of this debt was, or whether the pay check covered it entirely. I have had banks try to charge me a monthly fee after closing an account, for "falling below the minimum balance". The moment I've noticed that, I've made a fuss, and the bank has corrected their error. (I can only tell the bank I want to close an account, and fill out what paperwork I'm told to - it's on them to process it.) However, if you don't catch it early, those fees would add up over the years. If something like this is the source of OP's "debt", then the bank is just being greedy.

 

[justalayman]

I didn't say here is no moral duty to pay it back....but when TX added direct deposit provisions to the law in .017 they imposed mandatory steps upon the employer ...and the employer failed to follow the steps .and they deposited it in the wrong place.

I am uncertain about if a person owns a closed account or if the account was actually closed ...but OP is pretty clear that it was closed in 2011....so I'm taking him at his word . At least as posted, the employer sent it to an non existing bucket .

Under .016 if employer had used a paper instruement and it was not honored on its face it would not count as a wage, so the law says, but when they updated .017 they did not address electronic instruements in 016 ....there may or may not be interpretation in Tx on point.

WHat may have happened is OP apparently used the same bank for the new account ..and the fine print in bank contract ( which few read or understand) contains a right of offset which the bank used .....

..but the point remains the employer failed to follow the mandatory provisions of .017

have you ever tried to deposit money into a closed account? The bank doesn’t just accept the money and put it somewhere. Anytime I’ve done that (granted it’s only once or twice trying to give my kids money) the bank rejected the funds and returned them to me. Why? Because there was no active account in which to deposit the funds

 

[ImyourTA]

The old closed account was Chase Bank. Chase told me the account was closed in 2011 and charged off. Then it was sold to a collection agency. The amount deposited by the employer was not enough to pay the balance. The bank account that the employer was instructed to direct deposit my pay after I was hired back last year is US BANK. This routing number and account number was emailed to them with an attached blank check to assure accuracy. A return email from the payroll manager confirmed acceptance of the new bank info. I closed the Chase account because I moved to a city that had no Chase bank location. Chase has yet to tell me what the balance was for. Still waiting for a list of those charges. I only used a debit card on that account. So it wasn't for returned checks.

 

[Chyvan]

The bank doesn’t just accept the money and put it somewhere.

This is a bank thing. They can if they want. The direct deposits come in on a file. The ones that are accepted by the computers post. The ones that are rejected can be manually processed or rejected.

 

[Zigner]

This is a bank thing. They can if they want. The direct deposits come in on a file. The ones that are accepted by the computers post. The ones that are rejected can be manually processed or rejected.

The OP had money deposit for him in to his account. That money was used to pay a debt. The OP BENEFITED from the money and now owes the excess money back to the employer. The bank isn't going to refund this.

 

[justalayman]

Then it was sold to a collection agency.

if you can confirm this then the bank acted entirely improperly. If they sold the debt they no longer can collect on the debt, simply put, because they have already been paid for the debt.

 

[justalayman]

The OP had money deposit for him in to his account. That money was used to pay a debt. The OP BENEFITED from the money and now owes the excess money back to the employer. The bank isn't going to refund this.

If the debt was actually sold I disagree with you. The bank was owed nothing if they sold the debt to a junk debt buyer. They have been paid and as such there is no debt for them to collect on, at least as far as they are concerned.

 

[LdiJ]

If the debt was actually sold I disagree with you. The bank was owed nothing if they sold the debt to a junk debt buyer. They have been paid and as such there is no debt for them to collect on, at least as far as they are concerned.

I have been leaning that way through this entire thread. If the employer would put enough pressure on the bank they would likely get the money back.

 

[Zigner]

If the debt was actually sold I disagree with you. The bank was owed nothing if they sold the debt to a junk debt buyer. They have been paid and as such there is no debt for them to collect on, at least as far as they are concerned.

I'd bet that the debt was not "sold", rather, it was "placed for collections". I do agree that if it was truly sold, then the bank acted improperly...but if it was truly sold, this wouldn't have happened in the first place.

 

[justalayman]

I'd bet that the debt was not "sold", rather, it was "placed for collections". I do agree that if it was truly sold, then the bank acted improperly...but if it was truly sold, this wouldn't have happened in the first place.

Your take is most likely correct and the bank simply mistated the action taken by the bank.

 

[PayrollHRGuy]

There are rules for ACH transactions. #2 is the one that would have been in play here.

Had the account been actually been closed the return would have been automatic.


National Automated Clearing House Association (NACHA) rules cover if and when a simple reversal is allowed, and there are only three situations that qualify.

1. Wrong dollar amount: if the wrong amount was transferred (for example, $200 instead of $150)

2. Wrong account number: if a transfer had the wrong account number and the sender or recipient was not the right account.

3. Duplicate transaction: if a transfer goes through more than once, the duplicates would obviously be reversed.

In the situations above, the reversal must take place within 5 days, and the affected bank account owner must be notified that her account was debited.

 

[Zigner]

There are rules for ACH transactions. #2 is the one that would have been in play here.

Had the account been actually been closed the return would have been automatic.


National Automated Clearing House Association (NACHA) rules cover if and when a simple reversal is allowed, and there are only three situations that qualify.

1. Wrong dollar amount: if the wrong amount was transferred (for example, $200 instead of $150)

2. Wrong account number: if a transfer had the wrong account number and the sender or recipient was not the right account.

3. Duplicate transaction: if a transfer goes through more than once, the duplicates would obviously be reversed.

In the situations above, the reversal must take place within 5 days, and the affected bank account owner must be notified that her account was debited.

It was not an incorrect account number with an incorrect recipient. The account number belonged to the recipient.