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Overdraft – Where the Blame Falls

The 2016 story about a college student who spent $4 million in luxury goods, due to an overdraft error her bank failed to catch until later, isn’t a new one for many. The wide-eyed young woman posing with her expensive bags and using various photo filters has sparked much conversation between people who hear the story. Some look at the bank and scold them for catching this nearly a year after it happened, others blame the young woman for being so reckless with her spending.

The story came up in my Facebook feed and I read it, surprised but amused since it doesn’t sound real. (Maybe it’s because the average individual only dreams about going wild on a shopping spree where sky’s the limit.)

I did note before sitting down to write this post that there was no mention of the young woman’s parents and how they were handling the situation. A few mentioned that they had money back home in Malaysia and would transfer a monthly allowance to their daughter while in Australia. While I do not know any of the parties personally, one predicts that a case of kids copying adults probably influenced her as she grew up. In other words, if she was used to seeing her parents spend their money on luxury items and her parents giving her what she wanted, she was mimicking their spending patterns in terms of how it was used. That is a red flag for me – most parents strive to teach their children the value of money and try to establish rules with asking for things and encouraging them to earn money in order to work for things. (Usually people have shown to have more appreciation for the things they earned the money for, versus those who simply have it handed to them.)

However the majority of the blame should not be on her parents for poor financial management skills – the bank employees managing her account should have done their due diligence on routine checks. We entrust banks to keep our accounts and money safe and hearing stories where they didn’t actively check the status of the accounts for fraudulent or suspicious activity lessens that trust. Who wants to do business with a establishment that cannot protect your money from thieves, fraud, or other incidents? There’s a reason why those mocking the bank in this case are laughing at them for being so careless to oversee the error.

While the young woman had the charges dropped and the bank is working to rectify things after the loss, you wonder if the former and her family learned their lessons. (The young woman for exercising caution and checking the validity of the funds and the family for giving her what she wanted with little instruction on the value of money.) The bank likely required staff to undergo training to learn how to spot suspicious activity and what to do if it happened again, but their reputation is already tarnished as a trustworthy bank.

Where do you fall on this case?

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