Back in 2014 a twenty-one year old Malaysian student studying chemical engineering in Australia opened a savings account with Westpac. To her surprise, she found that the bank had accorded her a $ 4.6 million overdraft facility - and so she went on a spending spree.
Between July 2014 and April 2015 she spent $ 3.3 million, renting an upmarket penthouse in Rhodes, purchasing designer handbags, going to the best social events - and generally " living the good life " !
That all came crashing down this week when the police arrested her as she was getting on a plane to return to Malaysia. She has been charged with " dishonestly obtaining financial advantage by deception and knowingly dealing with the proceeds of crime ".
Put before a court, the magistrate observed that " It will be difficult to prove that her spending was illegal. She didn't take it from them,. They gave it to her " ! - and granted her bail.
What an interesting can of worms this has opened. No doubt there will be an investigative witch hunt amongst the minions who process the bank's dealings within Westpac. It will probably boil down to a simple matter of a misplaced digit in an account number or a mouse click on the wrong document, but whatever the cause nearly five million dollars of the banks money found it's way into the wrong customers account - and was undiscovered for almost a year.
This also looks like becoming a " lawyers picnic " ! That astute magistrate issued a clear warning that the student did not feloniously seek an overdraft by giving false information. She did not seek to obtain " financial advantage " by any action on her part. The provision of that overdraft was entirely an unasked " gift from the bank " !
"Knowingly dealing with the proceeds of crime " also looks a bit dodgy. Someone will have the task of " defining the crime " and that is certainly open to interpretation. In this case it seems that the bank simply awarded one of the many overdrafts it grants to worthy customers - to the wrong person. It could be argued that this student now simply has a debt to the bank - and that the bank needs to pursue the usual recovery procedures where payment default occurs.
It all depends if the bank decides to play hardball ! Technically it could pursue that student legally for whatever time is allowed under the statute of limitations, but it is unlikely that a student will amass that sort of money in the early years of her commercial life. The banks money will probably end up written off somewhere in that portfolio titled " under-performing loans " !
Surprisingly, this is not a totally isolated incident. Some years ago the proprietors of a struggling petrol station found several million dollars credited to their account. They promptly withdrew it in cash - and ducked off overseas. This created a media storm and later they negotiated a settlement with the bank, returning to Australia and giving back what was left of the money. It is uncertain if any punitive court action followed.
This present case will be followed with interest by most people. Getting rich by winning Lotto is a common dream, but finding unexplained wealth suddenly appearing in your bank account could become a nightmare. The insane amounts of money flowing through the banking system means that this sort of SNAFU is not unusual and the folk who process computers are far removed from concern at the immense value of the transactions they handle daily.
How this case turns out will shape the course of action likely the next time someone checks their bank statement - and gets a pleasant surprise !
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