Cheque lodged to incorrect account - who is liable?

H

Helen321

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Hi

Hope this is the correct forum for this.

I wrote a cheque made out to my apartments management company and crossed it a/c payee only. It was given to the managing agents to lodge.

It has been lodged to one of their other accounts (their company account) rather than to the Managment company account to which is was made payable.

These accounts have (very) different names. However, the managing agents did have access to our managment company accounts at the time that this cheque was lodged.

We have now removed the managing agents, and it then became obvious that my cheque did not get paid into the management company account (when the new directors got access to the bank statements..).


The bank are not being forthcoming as to getting my money back. In fairness they haven't said I won't but I am having to deal with a CS agent on a phone line who doesn't call back etc etc

The managing agents are (I believe) in financial difficulty and are not being forthcoming either. I understand that other apartment owners have had the same issue (ie money not lodged to management account) and are also struggling to get their monies returned - though in some cases they made their cheques/drafts out to the Managing Agent directly.

Who is liable here? Has the bank some responsibility as they permitted cheque to be lodged to an account other than the one the cheque was made out to? I am concerned as it is possible that the managing agents may go belly-up v soon(they have been bouncing cheques willy-nilly) and if so I won't have a hope of getting my money returned..

thanks in advance
 
The bank is clearly liable in this case and must refund the money to you.

If I make out a cheque to Jill and cross it a/c payee only, the bank must lodge it to Jill's account.

If the cheque is lodged to Jack's account, then I have not paid Jill what I owe her and she can still demand the money. The bank should refund you your money.

1) Ask, in writing, for a copy of the cheque
2) Send in a formal written request for the cheque to be credited either to the correct account or to be refunded.

The bank will have to try to get the money back from the managing agent.

Those who made out a cheque to the Managing Agents will have to claim from the Managing Agents. They still owe the money to the Management Company.

Brendan
 
Many thanks for the speedy response Brendan

I have a copy of the cheque - bank issued that no problem.

I had requested that they let me know to which account they did lodge the money and they have been very slow with that information. In the meantime I have worked out (through digits that they printed on the cheque) that it was lodged to another account and was able to confirm that it belongs to the Managing Agents. Yesterday it was confirmed with me that the name on this account is "managing agents client number 2 account". I guess my main concern is that because of the fact that this company were our managing agents at the time and would have had power to sign cheques on our management company account etc that the bank will deem them (in either account) to be the "account payee"..

I am going around to the Bank today in person to request refund of my monies as I am getting nowhere with the Customer Service staff. I am doubly concerned as the new managing agents are putting pressure on me to pay (what I thought I had paid!) as I now appear to be a couple of thousand in arrears.

Is there any particular law or act I could quote when I go to the bank today to strengthen my case?


thanks again
 
Are all three accounts (your account, the management company account, the managing agents account) at the same bank? If not, there might be complications about which bank is liable.
 
Hi Complainer

No they're not. My bank is NIB. The management company account is BOI. The Managing Agents account to which the money went is AIB.

What does this mean ?

thanks
 
Hi

Just to update you. My bank (NIB) has said that AIB (who took the cheque and lodged it to incorrect account) are liable. Thankfully my bank are dealing with AIB re same so hopefully this will be resolved soon and money refunded from AIB to NIB to be re-routed to correct account. NIB have said that AIB will then have to try to get the money back from the Managing Agents..
 
Thanks for the advice Bronte
They are actually taking it quite seriously now but I have put in request today to the woman I am dealing with to get this in writing.

When I get my money back (and credited to the correct account!) who do I complaint to about this - the managing agents took this cheque 4 months ago and lodged to their account and I have been pursued by the new agents for the past month or so as my account is in arrears... I assume that there are some guidelines/ethics that Managing Agents have to follow when dealing with client accounts but cannot find any?
 
Firstly I would agree with a previous poster about getting this in writing, you only have NIBs sayso that AIB are reponsible, AIB may have a different opinion

In terms of complaints, you'd probably need to raise a complain via the AIB formal complaints process, you local branch should be able to give you a copy of that. Depending on how that goes, you may want to take it to the Ombudsman, however they normally won't look at a complaint until you've exhausted the complaints process with the bank in question.
 
thanks - what is really annoying me is that I am apparently not the only one that the Managing Agent has done this to..
I understand that AIB may have liability but surely there is some law that the Managing Agents are supposed to lodge client monies to the correct accounts... is there a place that you can complain to about Managing Agents (apart from to the agents themselves!)?
 
Hi Helen

If this happened to a few of you and you have documentary evidence, then you could contact the Fraud Squad. I would have thought that lodging a cheque to your bank account is fraud.

AIB will presumably close their account and the company will go into liquidation.

You should make sure to notify the liquidator who may seek to have the directors made personally responsible for the debts of the company.
 
This sort of thing is happening all over the place. When I worked in a bank the local pub would cash cheques from customers payable to Ltd companies. The pub would then lodge these to their account in our bank. Trying to stop this practice was very difficult. I also had staff members who would allow our customers to lodge cheques made payable to Ltd companies to their personal accounts. I took over a branch and I discovered that a guy was sending a cheque by post to the branch every three months for a large sum of money. This cheque was made payable to a Ltd Co. but he was lodging it to his personal account. I stopped this practice but it continued after the guy followed the previous manager to his new branch and continued with the practice. It was in the managers interest to turn a blind eye. Rampant.
 
Thanks for all the responses. Just to update - NIB got the money back this morning from AIB. I am a happy (and somewhat surprised!) customer
 
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