The biggest banks mistakes

Today’s top news in banking is about another mistake made by bank in transacting money.

Representatives of the German state development bank KfW reported that they mistakenly listed several billion dollars in four other banks. As a result of the financial operation, the bank could lose from five to six billion dollars. The reason for the erroneous translation is a technical failure. It is known that due to this malfunction some single payments were made several times in a row. The management of the bank, noticing the failure of the program, canceled all erroneous payments and began an official investigation of the incident.

KfW in 2008 also mistakenly transferred $ 300 million to the American bank Lehman Brothers shortly after he announced his bankruptcy. Translation provoked in Germany a big scandal. KfW is the largest state bank in Germany.

In terms of assets, it ranks third among German banks, second only to Deutsche Bank and Commerzbank. The Supervisory Board of KfW is headed by the Minister of Finance of the country Wolfgang Schaeuble.

We are used to believe in banks and securite of our money in them. Banks transaction systems are build on principals of third hand- when one man cann’t transfer money only by his own will. But very often banks are making huge mistakes which produce a lot of problems for them and their client.

Let us show you the biggest one made for the last years.

1. In June 2015, the currency division of Deutsche Bank AG mistakenly transferred $ 6 billion to the client account of the hedge fund in the US, citing sources familiar with the situation reported to the Financial Times . As the publication specifies, the error was corrected the next day, the bank received the money back.

The erroneous transfer of funds was made by a junior employee of the foreign exchange sales department while his boss was on vacation, sources told FT.

2. Russian Alfa Bank made an erroneous transfer of ten trillion rubles to its client in Chelyabinsk.

A resident of Chelyabinsk Timur Fatkullin found on his account in Alfa-Bank 9.99999 trillion rubles (180 billion dollars). For comparison, in 2014 Russian federal budget revenues was at the level of 13.5 trillion rubles. The client called the bank, who immediately blocked his account.
Alfa-Bank was informed that several accounts had been opened with their client. When he tried to transfer funds from the Yandex.Money payment system to an already closed account using Internet banking, the Alfa Bank system displayed the balance field with the help of nines, which made an impression of transferring almost ten trillion rubles. Representatives of Alfa Bank denied that any funds were transferred to the client’s account, but they recognized that such a display is incorrect.

3. In Australian Sydney in 2016, a 21-year-old citizen of Malaysia, Christine Lee, is being tried. Four years ago, the bank mistakenly transferred $ 4.6 million to her account. The girl’s student visa expired. She was arrested at the airport when she tried to board the plane home.

“We are considering embezzlement of more than 4 million,” said Prosecutor Henriet Odin. — I took other people’s money for granted. At the trial, she said that she considered them a generous gift of heaven. There was a failure in the Australian bank system. Two years couldn’t reveal it. Money did not come at once. The system sent them for 500–700 thousand.

4. Payment system PayPal mistakenly charged one of its users more than 92 quadrillion dollars. For a while, Chris Reynolds of Pennsylvania has become substantially richer than the wealthiest businessman on Earth, the Mexican media tycoon Carlos Slim, whose fortune is estimated at $ 67 billion.

As Reynolds himself said, when he received a post about the balance of his PayPal account by mail, he decided that it was someone’s joke. After that, he checked his balance online, and he turned out to be zero, as it was in reality. Prior to this, Reynolds had a maximum of a thousand dollars in his PayPal account when he sold a set of tires from BMW through eBay.

PayPal acknowledged the technical mistake made by their staff and offered to donate a certain amount at the choice of Reynolds for charitable purposes.

5. Matthew Pierce of Melbourne was shocked when he found in his mobile banking 123 million Australian dollars ($ 88.4 million). The system allowed him to transfer this money to another account or pay for services in the local analogue of the ERIP. However, the man turned out to be decent and reported a possible mistake to the bank.

Commonwealth Bank employees just laughed and said: “Oh, it’s great!” There was no more activity from the bank for two weeks. After this time, Matthew was contacted by another bank employee and explained that the incident was “a glitch in the system, which sometimes happens.” Now the bank’s administration is investigating this expensive mistake.