Bank Debit for Someone Elses Debt...Help

[swtprncess281]

OK,

I need some assistance for my sister and brother in law. My brother in law decided to add his sister, as an authorized user I assume, to their bank account. She needed an account for direct deposit. No he didn't ask her why she didn't open her own which was mistake number one! Well a few days after Cap One debits $500 from the account claiming his sister has a debt with the bank. They also debited $77 for debt recovery. My sister is freaking out and can't understand why they would add her to the account without an alert appearing that she owed them money. Now, a week later they debit another $300 + $77 for this debt AGAIN! My sister immediately calls and ask them to remove her from the account. They have a long standing history with the bank, They maintain pretty good balances in all 3 accounts, have two car loans, NEVER overdraft, and have scores in the mid 700s. The bank refuses to remove the sisters name or credit them the money. I guess because they know they can get it out of that account. It appears that even through the funds are always available, they only debit the day after my brother in laws very large paycheck gets deposited. They have since moved a lot of money to Bank of America out of fear and are worried that if they close the account the bank will then hold them liable for any remaining debt. My sister is 26, has had credit since 18 and would pass out if even one 30 late appeared on her credit report. (Not sure how we ended up so different) It's a mess, my sister is pregnant and has a heart condition so I really don't want her stressed out. My brother in laws sister is just like "oops I didn't think that would happen, I'll take care of it........one day" and "I'm not sure what the balance is" Needless to say my sister is about to KILL her husband, but he added his sister with the best intentions.

Finally the question...can the bank Refuse to remove her from the account? Do they have any hopes of getting the money back from the banks? As much help as possible would be GREATLY appreciated!!! I told her they probably don't legally have to return it, but a good BBB complaint may coax them into doing in an effort not to lose great customers.

[swirlgirl]

The first question is does your sister-in-law have a judgment? If she does, the plaintiff can generally levy any account with her name on it. If there is a levy, the bank cannot just remove her name. This could be interpreted as a way of obstructing the levy.

Find out if there is a judgment against your SIL. I hope she didn't get your family tied up in her mess.

[jjgross]

The first question is does your sister-in-law have a judgment? If she does, the plaintiff can generally levy any account with her name on it. If there is a levy, the bank cannot just remove her name. This could be interpreted as a way of obstructing the levy.

Find out if there is a judgment against your SIL. I hope she didn't get your family tied up in her mess.

I guess the question i have is his sisters money being deposited in the account,and is she withdrawing the money?If she is he needs to tell her that she can withdraw after her bills are paid.Quite simply she is using him to pay her bills.You guys have to stop her.The direct deposit was a scam to get her bills paid so she can have more money for whatever she does.I don't mean to be harsh but you may have to consult an attorney.

[Denita]

Since he has already moved most of his money to another bank, have him move the rest of 'his' money and close the account. I would not leave the account open since his sister appears to be taking advantage of him.

[swtprncess281]

That is what I said! She lives in our hometown of Houma and evacuated to Baton Rouge with them for Gustav. She claimed to need the account to have the FEMA emergency payment direct deposited. Problem is no one knew what the damages were since they pretty much refused reentry to anyone for about a week after the storm. My company does work with FEMA and I told my sister that I'm sure they told her she wouldn't be getting anything until they saw her home. This was completely a scam!

Do you think the bank will come after them if they move their money?? My sister is concerned they might attempt to withdraw causing overdraft fees and a negative status if they take all the money out.

[Denita]

This was completely a scam!

Do you think the bank will come after them if they move their money?? My sister is concerned they might attempt to withdraw causing overdraft fees and a negative status if they take all the money out.

That's why he needs to go to the bank/bank manager and find out if there is some sort of judgement on his sister. It seems very strange that now that she is on his account, 'the bank' will not release his sister from the account. He has to shut down this account (assuming that he has no outstanding checks) before the sister can run up a bunch of automated debits/or herjudgements catch up with her and empty out his account. Because he was a long term client, he needs to go into the bank and see the manager (I don't think this can be accomplished with a CSR over the phone, IMHO). Good luck.

[swtprncess281]

That's why he needs to go to the bank/bank manager and find out if there is some sort of judgement on his sister. It seems very strange that now that she is on his account, 'the bank' will not release his sister from the account. He has to shut down this account (assuming that he has no outstanding checks) before the sister can run up a bunch of automated debits/or herjudgements catch up with her and empty out his account. Because he was a long term client, he needs to go into the bank and see the manager (I don't think this can be accomplished with a CSR over the phone, IMHO). Good luck.

Thanks Denita!

I'll call her today. We didn't think about the Judgement thing at all. I just assumed that she had an overdrawn account with them previously.

[Bigwoodystyl]

Let me get this straight.

There are:

-You (way on the outside looking in)

-Your sister

-Your sister's husband (your brother-in-law)

-Your brother-in-law's sister (your sister's sister-in-law). This is a minor point, but she is NOT your sister-in-law (lucky you), as she was referred to earlier in this thread.. that confused me a bit.

My brother in law decided to add his sister, as an authorized user I assume, to their bank account.

Just to get some details out of the way..There is no such thing as an "Authorized User" on a deposit account. On personal deposit accounts there are:

-primary and/or secondary signer (no real difference between legal rights)

-Custodians/minors (UTMA/UGMA)

-Executors

-Trustees

-Non-titled signers

-Beneficiaries (POD, etc.)

-Power of Attorney (POA)

So, it sounds like she is a legal signer on this account. In order to have her removed as a signer then, each signer must be present with ID. She will release her claim to the funds and from all liabilities in reference to this account, all the signers will sign this letter, including a bank officer. Then, a new "signature card" would need to be completed by the remaining signers (your sister and her husband).

That is what is necessary to have her removed. FWIW, I wouldn't attempt to go through that mess. Just close the account. Only one signer is necessary for that.

You may want to ask your sister what steps were taken to add the signer to the account in the first place. It's possible that if they never completed a new signature card to have her added, and if they didn't verify electronically with both signers that a third signer was being added to the account, then she may have been added improperly... IMHO, this is something worth verifying, as one signer usually can't simply add a depositor to an account without telling the other. (Your sister may have neglected to mention the fact that she previously signed off on this.. people tend to leave those details out when blaming other people, primarily her husband, in this case..)

Do you think the bank will come after them if they move their money??

It's not likely the bank will come after them for moving the money. Her account has been garnished. That is the reason for the $77.00 legal processing fee. IF this were internal, they wouldn't be allowed to charge that. They can only garnish what is in the account (unless it's the IRS who plays by an entirely different set of rules). I would stop using the account, cancel all automatic and recurring debits and move any direct deposits to a different institution.

can the bank Refuse to remove her from the account?

Absolutely, but they should allow her to close the account once sufficient time has passed for all items to clear.

I don't foresee any circumstances where they get back the money that was already taken. However, this money may be "on hold". It is possilbe that the bank's legal services department has not yet sent the check to the plaintiff. These are generally held for 2-3 weeks to give the depositor time to contest.

It might be possible to forestall the inevitable. After closing the account and canceling direct debits/deposits, your next best bet is to find out to whom the judgment is and negotiate with the plaintiff's attorneys.

Just my $0.02.

[swtprncess281]

Let me get this straight.

There are:

-You (way on the outside looking in)

-Your sister

-Your sister's husband (your brother-in-law)

-Your brother-in-law's sister (your sister's sister-in-law). This is a minor point, but she is NOT your sister-in-law (lucky you), as she was referred to earlier in this thread.. that confused me a bit.

First...They both came to me about this first and foremost to vent and secondly because they know I'm on this forum a lot and thought I could help. My sister and I are amazingly close and her husband thinks of me as his big sister as well since they've been together since junior high. I wouldn't be here asking for assistance for them, had I not been asked to do so.

Just to get some details out of the way..There is no such thing as an "Authorized User" on a deposit account.

That was in quotes because I knew it wasn't the correct terminology however I didn't really have time to look it up while I was posting this today during a small break I had at work.

So, it sounds like she is a legal signer on this account. In order to have her removed as a signer then, each signer must be present with ID. She will release her claim to the funds and from all liabilities in reference to this account, all the signers will sign this letter, including a bank officer. Then, a new "signature card" would need to be completed by the remaining signers (your sister and her husband).

Nope, not the case. My brother went to the bank with her information and added her to the account. She wasn't present and neither was my sister. Which I know is possible because I previously had a Cap One checking and was able to add someone without them being present. That is partly why I am confused about them not taking her off!! I was able to remove this person without them, just like I added them.

... IMHO, this is something worth verifying, as one signer usually can't simply add a depositor to an account without telling the other. (Your sister may have neglected to mention the fact that she previously signed off on this.. people tend to leave those details out when blaming other people, primarily her husband, in this case..)

No one is blaming him and certainly not his wife. As I stated he did it with the best intentions. The only person to blame is his sister for not telling him the truth. I don't think I ever said that my sister blamed her husband. Yep she was made and wanted to kill him after the money was taking the second time, but only because she wishes he would have let her know in advance since she is typically the more skeptical one and would have questioned it more. However, we couldn't possibly blame him for having a big heart and wanting to help his sister.

I don't foresee any circumstances where they get back the money that was already taken. However, this money may be "on hold". It is possilbe that the bank's legal services department has not yet sent the check to the plaintiff. These are generally held for 2-3 weeks to give the depositor time to contest.

It might be possible to forestall the inevitable. After closing the account and canceling direct debits/deposits, your next best bet is to find out to whom the judgment is and negotiate with the plaintiff's attorneys.

Just my $0.02.

I just talked to them both to give them this advice and they said the sister said today that it is not a judgment, but an overdrawn account..just as I suspected. She said it should be paid in full now, but they are going to close the account just to be safe and hope she actually pays them back. They aren't gonna miss any meals if she doesn't pay, but it would be a lot easier on the their relationship with her if she did!

In any case, thanks for all the advice! They decided to close the account just in case it isn't paid in full as she claims.

[swirlgirl]

After they close the account, have them check with the bank again in about 30 days. They need to make sure there aren't any unknown charges out there that may end up on ChexSystem or with some CA.

[swtprncess281]

After they close the account, have them check with the bank again in about 30 days. They need to make sure there aren't any unknown charges out there that may end up on ChexSystem or with some CA.

Thanks,

I forgot about ChexSystems!