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The Jewish Ethicist  - Bank Error

The Jewish Ethicist - Bank Error

Can I keep the money the bank mistakenly deposited into my account?

by

Q.I recently found an unexpected deposit into my account. This has happened a few times. In the past I notified the bank, but now it's becoming a burden, I could really use the money, and besides I understand that the bank is insured against the mistake anyway.

A. I wrote about this topic once before, also with a quote from the famous Monopoly "Community Chest" card. In that column, I concentrated on the ethical aspect of the question, namely the obligation to return lost objects. The Torah commands us "When you encounter the ox of [even] your enemy or his ass straying, surely restore them to him" (Exodus 23:4, see also Deuteronomy 22:1). In order to maintain an orderly society, we are commanded to invest reasonable effort in returning lost objects, including lost money, when we can find out who the true owner is.

Since then I have done some further research, and I want to expand a bit on my earlier insights. I note that Jewish sources deal not only with the ethical aspects of this question but also some of the practical ones.

The Shulchan Arukh (authoritative Code of Jewish Law) states: "If someone receives money from his fellow and finds extra, even if [the depositor] doesn't demand them he is obligated to return them if it is a sum that is reasonably likely to be a mistake". (1)

The Shulchan Arukh implies that what seems to be a mistake is very often not a mistake at all. The first step is to consider if the deposit is a mistake; if it is, it must be returned.

My research on the "surprise credit" phenomenon (try a web search on "Bank error in your favor") revealed that in a large fraction of cases these surprises were not errors at all. They can be income tax refunds, repaid loans, forgotten deposits, etc. These deposits have important consequences; they may obligate you to pay taxes (if it is income) or exempt you from taxes (if they are refunds). They may obligate you to pay back a creditor (if it is a loan) or exempt a borrower from paying you (if it is a loan repayment). Thus it is worthwhile to contact the bank to find out exactly what the source of the deposit is.

The other thing I learned is that even when the deposit really is a mistake, the account holder ignores this mistake at his or her peril. With or without insurance, the depositor eventually finds out where the money ended up, and is entitled by law to reclaim it. Statutes of limitations on this right can be very long, and precisely because "you could use the money", by the time the depositor catches up to you, you will be very unlikely to have the money handy. In a few cases, using the money can be considered a crime.

The Talmud tells a fascinating story about Rav Shmuel bar Sosretai. The queen in Rome had lost a valuable jewel, which was found by Rav Shmuel. The queen made a public announcement that anyone who returned the jewel within thirty days would receive a prize, whereas anyone found with it after thirty days would be executed. Rav Shmuel deliberately waited until after the thirty day period and then voluntarily returned the object. The queen, seeing that Rav Shmuel was returning the jewel completely voluntarily, tried to find a loophole for him: perhaps you weren't in the city early in the month? Perhaps you didn't hear the announcement? Rav Shmuel asserted that he knew very well of the announcement, and was only returning the jewel after the deadline so that people would know that his motivation was not fear of the sovereign, but rather of the fear of God's commandments. In this way he sanctified God's name among the Romans. (2)

Evidently this was enough to save Rav Shmuel bar Sosretai from punishment, but in this day and age I am skeptical that such a claim would protect you from any legal claims, fines etc. that keeping the money might subject you to. So even those of us who are not on the exalted level of Rav Shmuel bar Sosretai who returned lost valuables only because of the fear of God, would be well advised to return any misplaced money because of concern for the many sanctions imposed by the secular law.

SOURCES: (1) Shulchan Arukh Choshen Mishpat 232 (2) Jerusalem Talmud Bava Metzia chapter 2 halacha 5.

Send your queries about ethics in the workplace to jewishethicist@aish.com

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The Jewish Ethicist presents some general principles of Jewish law. For specific questions and direct application, please consult a qualified Rabbi.

The Jewish Ethicist is a joint project of Aish.com and the Business Ethics Center of Jerusalem. To find out more about business ethics and Jewish values for the workplace, visit the Business Ethics Center of Jerusalem at www.besr.org.

Published: June 9, 2007


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Visitor Comments: 5

(5) Feli, June 15, 2007 2:50 AM

Article in Forbes Magazine


"Consulting Cashman"
What Exactly Is Ethics?
Kevin Cashman 03.05.07, 12:00 PM ET
"A while ago, I had the good fortune to be able to sit down with John Dalla Costa, author of The Ethical Imperative. While I shared my song and dance on leadership, I was dying to ask John, "What the heck is ethics?" At the appropriate moment, I sprang my question. And to my surprise, John's answer was very succinct: "Ethics is others."

That's it? Twenty-five years of research and the answer is three small words.

Later, as I let John's concentrated wisdom sink in, the profound simplicity--and complexity--of his definition hit me. Leaders face ethical dilemmas every day, and it usually boils down to people--managing constant stakeholder-related trade-offs and serving one constituency better or more than another. Every day we are to some degree ethical and to some degree unethical. We can't make failsafe decisions on a regular basis, but we can accumulate paradigms and pathways towards how we influence others.

Ken Melrose, former Toro chairman and CEO, shared one of the company's recent ethical dilemmas, which centered around a lawnmower product that had become a new commercial market standard. The product is unique because it turns on a dime but has a very low center of gravity. Consequently, it is very hard to overturn, but in the rare instance it happens, it flips only 180 degrees and can seriously injure the operator. While the mower met compliance standards, Toro decided to add roll bars behind the seat as an added precaution, not raising the price for newly manufactured units because they added safety, not performance.

Then, as they further considered the needs of "others," another tough decision popped up. Don't existing units deserve the same ethical treatment? The initial Pollyanna answer was yes, but the strict financial answer was no. After all, auto companies didn't retrofit all used cars with seatbelts, and if Toro did install the roll bar on used machines, another constituent--shareholders--would be adversely affected. So what was the right thing to do? Was an old customer as valuable as a new one or as important as shareholders who may have invested much more of themselves into the company?

What would you have done?

Melrose's company installed the roll bars for all machines, new and old, at their own cost, reasoning that although the decision was a costly one for shareholders immediately, that they had made a value-creating decision serving both customers and investors for the long haul. For Toro in this case, seeing the longer-term consequences to all constituents--to all the "others"--was the pathway to a tough ethical leadership decision.

Here are your questions and my responses to other ethics-related questions or dilemmas you've asked. Specific names of individuals and companies have been withheld to preserve candidness.

Leader in Transition: How do I identify organizations wanting to hire a chief ethics officer?

Cashman: One of the surest ways individuals can pursue being the "other" CEO is through formal training. Massachusetts-based Bentley College has established itself as a primary educator for aspiring chief ethics officers, but other programs certainly exist.

Another good approach is via networking. Commercial attorneys specializing in white-collar crime matters are probably most apt to be in positions of referral, yet it's also wise to explore various associations, particularly those in highly regulated industries like health care, financial services or defense. Specific organizations worth investigating include the Ethics & Compliance Officers Association (ECOA), the Health Care Compliance Association (HCCA) and the Society for Corporate Compliance and Ethics (SCCE).

Networking can be useful not only for identifying job openings, but also in assessing how specific organizations may interpret ethics--for instance, if they view it as synonymous with compliance or instead see the issue as having broader strategic implications. Center for Ethical Business Cultures CEO Ron James points out that these job responsibilities can greatly vary, depending on whether a company merely wants to pay lip service to the issue and "stay within the lines" or whether it's also interested in imbedding a genuine culture of responsibility.

CEO, Management Turnaround Consultancy: Specifically, what can CEOs do to create and nurture an ethical culture in their companies?

The first step is to take on the task of embodying in your own life the values for which you want your organization to be known. Then, to the extent you can, surround yourself with people who connect with these same principles you seek to encourage--perhaps in different ways. Foster a sense of team around this commonality, openly sharing how you think through difficult issues and how you make the judgments that are critical to ethical behavior in your company. Engage your team in discussing the ethical dilemmas that confront your organization, thereby creating a model where tough issues are open for discussion.

You'll also need to make sure organizational systems support the ethical environment you want to create. This step can take longer and involves looking into businesses processes and norms to determine where the most resistance to values comes from and why.

CEO, Management Consulting Firm: What is the difference between ethics and honesty?

I may be splitting hairs here, but I view honesty as being as factual and objective as possible regardless of the circumstances. Ethics, on the other hand, has to consider numerous circumstances and constituencies.

Honesty is challenging because it's straightforward, while ethics is challenging because it's anything but straightforward. For instance, a leader may possess facts and information that, at face value, we would like equally shared with everyone. However, while that approach may be honest, it's often better to instead consider how it will impact various conflicting constituencies--hence the challenge of ethics.

Kevin Cashman is president of global leadership development, executive coaching and team effectiveness consultancy LeaderSource: A Korn/Ferry Company (www.leadersource.com). He has authored four books on leadership and career development, including the bestselling Leadership from The Inside Out .

Next up: The importance of leaders' interpersonal skills. Submit your questions to consultcashman@leadersource.com.


(4) Nechama, June 14, 2007 11:01 AM

HONESTY PAYS

My husband received too much money from an ATM and personally returned it to the bank. He was sent to the bank manager who couldn't get over it. He presented my husband with a special certificate of appreciation (we saved it). More than that, it was a real Kiddush Hashem as my husband is obviously Charedi.
So you see, honesty pays.

(3) Anonymous, June 12, 2007 2:49 PM

wishful thinking

Someone who works for "frum" business would lose his job,as bookkeeper if he ever returned a wrong overpayment.(from 30 yr experience)

(2) Salee, June 12, 2007 12:04 PM

You Really Need to Ask this Question??

While the article is enlightening, as always, the answer to this question is without nuance - of course, you can't keep it; it's not yours!

(1) David Merrill, June 12, 2007 10:07 AM

simply put

"...contact the bank to find out exactly what the source of the deposit is."

There is the answer in a few words.

Presume that it is rightly your money but you want a clear explanation. In the process of explaining it, you have given the bank the opportunity to correct the mistake if one was made.


Regards,

David Merrill.

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