The Westpac $10 million
May 26th, 2009 at 7:58 pm by David FarrarSomething that has annoyed me about the coverage of the Westpac $10 million error is that Westpac did not accidentally give this couple $10 million. It gave them a $10 million credit facility.
In my mind there is considerable difference between someone finding $10 million in their account and spending it (while still illegal) and someone realizing their credit limit has been set too high, and withdrawing the maximum with no intention of paying it back. The latter is outright fraud.
Do others agree that there is a difference, and that it has not been made very clear?
May 26th, 2009 at 8:07 pm
Serves Westpac right!
They sanctimoniously ask for contributions to the Choppers that carry their livery. No mention of their contributions at all.
Are they matched? A flat sum per chopper? A grand total Budget? So many dollars per call out, per lives saved?
I actually think it is rude and cynical. However I have this all wrong? Doubt it. If it is Guide Dogs for the Blind or RNLI, then they have Zillions in the Bank, and not enough blind people or sailors in peril.
Vote:May 26th, 2009 at 8:12 pm
Not if you’re a leftie: if you can get it, take what isn’t yours. The bastards don’t deserve it anyway, they just got lucky in the lottery of life.
Vote:May 26th, 2009 at 8:18 pm
Agree, if the bank gave me a 10 million overdraft, that would be nice. Now why could I not spend it?
Vote:The problem will be that they need to repay it.
Westpac and the police have a problem here.
As long as they make repayments, I can’t see they have done anything wrong.
May 26th, 2009 at 8:28 pm
Yes David, the coverage has reflected the dim witted level of intelligence prevalent amongst journalists. However I wonder what what on earth gives you the ability to decide what was the intention of the person? You don’t know whether he inteds to pay it back or not.
The fact is, he can’t be charged with theft because he hasn’t stolen anything. Had the bank actually deposited funds by mistake it would be a different story. Get used to it. He simply drew down on an authorised authority. When the bank calls up the debt and he is unable to pay, he will be bankrupted and the bank will sing for the rest. End of story.
In fact, it would not surprise me if he comes back and takes an action against the bank for wantonly destroying his business. It is possible he might win damages exceeding the amount he is unable to repay.
Nowhere in all the commentary can I find any evidence that the bank called him on his mobile or e-mailed him and said “we made a mistake and would you please pay the money back.”
Vote:May 26th, 2009 at 8:31 pm
Agree, and the media seems to be overlooking that.
If someone accidently gave me a 10 million dollar loan I would be tempted to look at ways to use it to make more money but would be very aware it needed to be paid back with interest
Vote:May 26th, 2009 at 8:32 pm
While I agree that they are probably on the run and have no intention of paying anything back I can’t follow the logic of what you are saying.
If they were given a credit facility and drew it down, that is surely more acceptable than running off with money you know wasn’t yours. Hell my visa credit limit is constantly increased without my asking. Strictly speaking the time to be concerned is when they miss the first re-payment date, which hasn’t happened yet!
Vote:May 26th, 2009 at 8:36 pm
Whale’s got some interesting points about this case.
And I agree with others above, how the heck does anyone know what their intention is, at this point?
Vote:May 26th, 2009 at 8:38 pm
The Police say that the withdrawal is not theft because the Bank granted the facility and no actual physical money was stolen. Lep Gao drew down from the facility as he was entitled to do (the docs he signed when applying for the O/D would have stated his obligations but not the amount) and cashed out. The Banks should now be worried because they have always treated customers that have taken advantage of Bank errors as thieves. As to fraud how do you know Gao does not intend to pay it back (eventually); he would be one of many that have borrowed from a Bank and while intending to repay have failed to do so. Interestingly fraud is probably not an extraditable offence. If Gao returned to NZ voluntarily the police may charge him with some offence relating to ‘access and use of a computer’ or somesuch but it would seem to me that Westpac are going to have to sue him as a debtor rather than file charges of theft.
Vote:May 26th, 2009 at 8:57 pm
Thanks for pointing that out DPF. That coverage has pissed me off no end. There is a world of difference between depositing money and extending a credit limit. Both give you clear and available funds but that does not make them the same thing.
I am also getting sick of people cheering on this guy. Westpac made a mistake – this guy broke the law. They are not comparable actions and he is not deserving of praise. This is not a victimless crime – even though people think it is good to ‘stick it to the man’ in the form of a bank. What if this theft was from your next door neighbour? Is theft condoned just because you don’t know those that pay the penalty?
This is no better than someone taking a handbag from an old lady who mistakenly left it on a park bench. That people such as Glutaemus Maximus and others think this is deserved because they do not like something about Westpac or banks in general is screwed up. It’s like someone saying the old lady deserved to have her handbag stolen because she chose to wear an ugly outfit.
Vote:May 26th, 2009 at 9:04 pm
What I don’t understand is how did they find out about the overdraft amount they got given.
With an overdraft facility, you don’t usually know how much you have available as you just go into the negatives when withdrawing money. The only thing I can assume is that they had a statement or an ATM receipt that showed “Amount Available”.
In this case though, you would have to act really quick to clear out the money available to you.
Surely there is something dodgy here for Gao to be able to find out he had $10mill then race around trying to get rid of it.
Doesn’t add up.
Vote:May 26th, 2009 at 9:10 pm
Rachael – A quick log in to Westpac online banking will tell you what your balance is, what your o/d limit is and what you have available.
Vote:May 26th, 2009 at 9:23 pm
Well, if $10 million ended up unsolicited in my bank account, what would I do?
Well, firstly, unlike the Rotorua mugs, I’d send it somewhere safe. They lost over two thirds of it by not planning properly in the overexuberance of suddenly being rich.
Move it to an offshore bank account, fly there, withdraw the whole amount in cash, deposit it in another bank (preferably nearby, because you don’t want to be walking on the streets for far with with $10m in your pocket, then electronically transfer it somewhere to another bank.
Chain broken. Unfortunatly, these guys were amateurs.
And what would I do with the cash? Well, $1m to the animal rights protestors I guess. Oh, and enough to the Green Party that they don’t need to worry about fundraising for the next election. $1 million to the Beneficiaries Action Federation! A good dollop to Forest & Bird. Oh, and a million to support the return of foreshore and seabed rights to Maori. And a million to oppose the undemocratic Supershitty proposals n Auckland.
Shit, I’m running out of ideas about what to do with the money, and there is still plenty left.
Maybe a holiday in Venezuela and a meeting with President Chavez! He seems to know what he’s doing and could give me some ideas.
Commenters beware!
Vote:May 26th, 2009 at 9:24 pm
The real mystery is that Banks have mechanisms that kick in when large transactions take place – it depends on who you are but any unusual transaction kicks in these processes. So why wasn’t this spotted instantly?
There is definitely more to this than meets the eye
Vote:May 26th, 2009 at 9:28 pm
I would wonder what the couple actually signed as you usually sign your life away when taking on a overdraft. If that legal document stated $10,000 and they went over that limit then I wonder what the fine print says
Vote:May 26th, 2009 at 9:40 pm
Hard to call it really, since we’re only getting part of the story. If he has acted alone, then on the face of it, Plod are going to have some real difficulty getting any charges to stick (and morals have nothing to do with the ‘law’). If he had ‘inside’ help, then their mid-week timing in transferring the funds, was well out.
Vote:May 26th, 2009 at 9:41 pm
Aren’t there foreign controls when you transfer that amount of money out of the country, doesn’t the reserve bank have a flag that goes up or something?
Vote:May 26th, 2009 at 9:44 pm
Yes, the coverage of this has anoyed me too. Now technically speaking if someone deposted 10mil into my account and I withdrew it then I would have zero way to explain it. It would be 100% theft. With a 10mil O/D facility I could explain it away by claiming that I always knew it was a loan, and like every other O/D, it needed to be paid back. So their drawing down on an O/D facility would give any defence lawyers loads of wiggle room, where burning some chance windfall would leave their counsel looking for a defence.
Vote:May 26th, 2009 at 9:44 pm
I am actually surprised that the bank even picked up that there was a problem.
An overdraft facility would not normally come to the banks attention unless the limit was exceeded. If it were me, I would leave enough funds in the account to cover APs etc so the amount didn’t raise any flags for quite a while.
Vote:May 26th, 2009 at 9:54 pm
I hope when these two are found, they are charged under the cruelty to animals
Vote:act, after news reports stated they had left in such a hurry they had left their
dog tied up. (He had been left for nearly a week before neighbours realised they weren’t coming back)
May 26th, 2009 at 10:01 pm
democracymum said: news reports stated they had left in such a hurry they had left their
dog tied up. (He had been left for nearly a week before neighbours realised they weren’t coming back)
If that is the case, and they had made no arrangements for their animals, they are not heroes.
If they did that. they are arseholes!
Vote:May 26th, 2009 at 10:08 pm
As a Westpac customer who pays and receives overseas money, I know that the checks and balances procedures do exist, and are usually painful and biased in the bank’s favour. I also know that to send money overseas you need to know both the recipients bank account number and the SWIFFT bank branch ID to create the transaction. I also know that when you get allocated an overdraft it appears in your on-line balances view.
Vote:So it appears that these people haven’t actually committed any crime – they have simply drawn their overdraft to the maximum and previously planned where they have invested their overdraft.
May 26th, 2009 at 10:29 pm
this is Westpacs punishment for running some appalling commercials.
like the gay albino and his lover talking about outdoor furniture ffs
or
taking the piss out of white males and no one else.
fuck em
Vote:May 26th, 2009 at 10:34 pm
Gosh if I had all that money I would be able to fly to Wellington every month and got to all the TAPAS Meetings
Vote:Joy
May 26th, 2009 at 10:48 pm
If I had all that money I’d fly you in Tuija. TAPAS meetings would make too much sense without you
Vote:May 26th, 2009 at 10:55 pm
The thread is worrisome because of what it speaks to NZ values. I may be old fashioned but I was raised to return any unbegotten gains, whether it be by theft or mistake. No ifs and buts. If it is not gainfully yours–it is not yours, regardless of the money gouging institution involved.
The “stick-em” attitude exhibited here and else where is understandable but not justifiable.
.
Vote:May 26th, 2009 at 10:56 pm
DPF all the idiots commenting on your posts (not all the posts, just the silly ones) are missing your question and you are quite right – it is more fraudulent than a deposit because the agreement was for a ten thousand dollar overdraft.
Nice post from you, may I say
That point has been bugging me too.
Vote:May 26th, 2009 at 11:50 pm
As Paul G. Buchanan points out, our attitude to ripping off an Australian owned bank (them) vs attitude to ripping off the tax payers (us) show us how inconsistently we apply ethical values.
It’s wrong, of course they should give it back – it was not their money to start with. It’s simply mob mentality to cheer them on because it was Westpac – that big nasty scary Aussie bank.
Vote:May 26th, 2009 at 11:51 pm
I agree with Dime about that dreadful set of adverts for some crappy air system.
Nobody here needs it here.
Not if the houses are built properly, with proper central heating, and PVCu Double Glazing.
That HRV advert with loads of cheap pipes in the roof, and Elvis there is a corny as the other one with the two drippy looking homos at the end of the advert.
Very weird IMHO.
By the way I stand behind my cynicism of all bankers and banks.
Westpac are no better or worse. The opportunistic Chinaman should be drop-kicked into jail for animal abuse. There again
at least the dog didn’t end up on a platter.
How much do Westpac actually contribute to the choppers right now? Does anybody know, or are you all seething with indignation
that you never got your mits on such a small amount of money?
Vote:May 26th, 2009 at 11:52 pm
Paul you raise an interesting point.
Many will recall the old Holmes Shows where he left the wallet on the street and filmed what happened.
It would be illuminating perhaps to test it again but with a variation. One test where the lost wallet obviously belonged to someone poor and another where it belonged to someone of obvious means.
Wonder what would happen.
Vote:May 27th, 2009 at 12:27 am
Well, let’s face it, the power companies have stolen a few billion off you dumb Kiwis, and undoubtedly Westpac have stolen at least a few million off of you dumb Kiwis, so the police in good old farm-house, PC, I won’t complain unless a guy hits me in the face with a closed face mentality, the Kiwi police should treat them as double murderers, after all, TVNZ said they were bad right?
A sad sad country is the old a tee are roa.
Vote:May 27th, 2009 at 1:02 am
Westpac don’t sponsor the Auckland Rescue Helicopter Trust any more.
Vote:May 27th, 2009 at 1:04 am
OK, I think I posted a reply like 2 hours ago, seems my posts are getting like a day stand down, and there I was thinking this was a democratic blog.
[DPF: It is called a spam filter]
Vote:May 27th, 2009 at 1:06 am
Next you’ll be telling me Camron Bennett lost his job and is in the “delaying controversial posts” department of Kiwiblog.
Vote:May 27th, 2009 at 1:11 am
I am posting this at 1.09 on a supposedly, non-controlled right wing blog, by the famous Robert Black, let us see how long it takes to surface.
Vote:May 27th, 2009 at 1:14 am
Any future bloggers please post the time u submitted the blog, so that DF cannot lose your blog effort without being noticed, after all this is why this guy DF opened this blog right?
Or was it just for his own fame?
Haha.
Vote:May 27th, 2009 at 2:23 am
A very good point, and if it had been a credit facility then I do think the bank’s case is in fact weaker.
Early reports seemed to indicate it was a deposit – which rung true because I know of someone who (years ago) applied for a small loan from Westpac, was declined, and later found a billion dollars in their account (less their small overdraft, so it was: 999,999,…).
Seems that Westpac are having trouble firing the munters on their staff. Perhaps if the 90-day bill were in place 10 years ago…
Toad: “Well, firstly, unlike the Rotorua mugs, I’d send it somewhere safe.”.
Bloody good idea – and I’m with you there. It’s harder than you think though. I’m not sure how backward NZ is as far as implementing the “anti money laundering” controls – but it seems to be hard to go unnoticed for someone who does not regularly shift millions.
Do any NZ trading banks deal in gold bars?
Vote:May 27th, 2009 at 6:19 am
Brilliant story – westpac get reamed by a couple of servo’s to the tune of, what was it, about 3 mill?
Anyone able to spell ‘lax controls’ without laughing so hard you spill your Tsingdao?
Vote:May 27th, 2009 at 7:37 am
I found $1500 dollars in my account once that I couldn’t match to a known source and the bank jumped like a landed fish when they heard about it. Pity I couldn’t get them to jump for several months over the incorrect spelling of my name on my account though.
The point is, it would have been wrong to take it. And there is no doubt that what has happened is wrong and cannot be justified under any conditions. They wanted $10,000 and they got $10,000,000. No one makes an error of that magnitude. In fact, people I’ve done business with who have a similar amount of zeroes after their personal fortunes know exactly where every thousand goes. There is no defence.
Banks also retain the right to shutdown credit facilites at any time. So I’d be sure that Westpac have been more concerned with internal process than crime.
Unfortunately too, it shows NZ up for the unskilled backwater hick-country it is. The employee who made this error will keep their job – it’s all the fault of the thief…they were demonstratably masterminds! Like other fuck-ups that could have been avoided, this one will happen again, and nothing will change and it will be swept under the carpet and the thief blamed all the more because it’s just too embarrasing to face the truth. And while ignoring the gapping hole in their systems, they’ll penalise average joe who wants to withdraw $1000 for the weekend instead, with a barrage of identity checks and double checks, maybe even reducing the ATM limit to $100 per day. Yeah. That’ll fix it.
Vote:May 27th, 2009 at 7:41 am
“Move it to an offshore bank account, fly there, withdraw the whole amount in cash, deposit it in another bank (preferably nearby, because you don’t want to be walking on the streets for far with with $10m in your pocket, then electronically transfer it somewhere to another bank.
Chain broken. Unfortunatly, these guys were amateurs.”
I doubt you can find a bank anywhere who will take a $10m cash deposit from someone they don’t know. The KYC rules are pretty strict and apply pretty much everywhere.
Vote:May 27th, 2009 at 8:51 am
Paul G Buchanan said: The thread is worrisome because of what it speaks to NZ values.
Come on Paul. We were (or at least I was) just having a bit of fun.
I actually did receive a mistaken payment once (not in this league – $12,000, when I was owed $1200) and I phoned the company that made the payment as soon as I noticed it to arrange to repay the difference.
I suspect most people would, as I did, repay money they wrongly received.
Vote:May 27th, 2009 at 9:32 am
Indeed. In fact, that reminds me of the target episode last night where they set up a fruit stand with an unlocked honesty box. While most people paid the correct amount (some even paying more) and many people actually locking the box, there of course was the odd bad egg whom exploited the situation by either taking more fruit than they had paid for, or, in two cases, actually ripping of the contents of the box.
Moral of the story? Most folk are honest, but a few pieces of shit (like Leo Gao) ruin it for the rest of us.
Vote:May 27th, 2009 at 11:18 am
“Remember to check payee account number and details carefully, as The Bank is not responsible for any errors.”
OH MY how Westpac squeal, now that suddenly they are on the receiving end of that particular fact of life, for a change!
(DPF’s distinction above is correct, of course drawing down an excessively large overdraft and then skipping the country with no intention to repay is quite different than accepting an erroneous gift of $10,000,000 cash.)
Yet strangely these two are folk heroes just for sticking it to the rich pricks. Trust the MSM to align itself with populist feeling rather than present a balanced and well-researched account of the facts, eh?
Vote:May 27th, 2009 at 12:16 pm
The bank were stupid and probably deserve to never see the rest of it again. But it’s still thievery. Jail time for the Chinaman, serious red-faces & a quick few million bucks lost for Westpac.
Stupidity deserves its rewards.
Vote:May 27th, 2009 at 12:35 pm
There is definitely a distinction between the two, but both are dishonest. Clearly one would know the $10,000,000 was not theres and they would have no ability to pay it back.
Vote:May 27th, 2009 at 12:37 pm
Speaking of the tags “Westpac” and “fraud”… My boss when I worked in Akl some years ago refused to donate to the Westpac Trust rescue helicopter. Here is his reason:
In downtown Auckland, there is a pub, on one outside wall of which is a very large photograph of the Westpac trust rescue helicopter flying over the Harbour, with the Auckland skyline in the background. There is no wording whatsoever (e.g. “Call 0800 xxxx xxxx to make a donation” or whatever) just this picture.
Interesting fact #1 about this photo: The rescue helicopter trust paid the proprietor of the pub six figures for the placement of this photograph.
Interesting fact #2 about this photo: The proprietor of the pub is a long-time friend and associate of one of the directors of the rescue helicopter trust.
All hearsay mind you…!
Vote:May 27th, 2009 at 12:59 pm
DEMOCRACY MUM…………….I agree with you I am more concerned that he be called to account and severely punished for leaving his dog tied up than for anything associated with the money.
Vote:Having recently submitted my tax return by computer I found it disconcerting to have to type all amounts by separating the dollars from cents by . instead of my usual practice of separating by a – and a c at the end. It would be so simple to put $10000 instead of $100.00. The dot is hard to read. I assume the banks also rely entirely on the .
May 27th, 2009 at 3:22 pm
What does not make sense to me is how come ONE employee can make an entry in someones account for $10mil…where are the internal controls of this bank? Does a sum of money beyond say $20K does not need (several) authorizations before it is finally either given as a drawable facility or as a(loan) deposit? The reality is that senior heads should roll at Westpac for allowing such a weak system to operate at all! If they have proper systems in place not ONE individual could make such blunders, the system would reject it UNLESS it had the right number of authorizations…..oh, hang on, maybe they still use handwritten ledgers at the bank…..
Vote:May 27th, 2009 at 7:23 pm
I want to know how the heck one would remove $10 million from their account? You can’t roll up to the bank and get it in cash easily (you’d probably struggle to carry it out even), you can’t really transfer it easily to another account via internet banking (would leave a trail and banks are funny about large transactions).
Vote:May 27th, 2009 at 7:56 pm
Doesn’t this thread typify the stupidity and morals of such a large number of NZers. Firstly, as regards the Westpac rescue helicopers, I can tell you that the sponsorship takes up a disproportionate amount of Westpac’s advertising budget, and I can tell you as one who stands out their selling sausages and collecting money, the staff do a hell of alot of work in addition to the money the bank puts in – I can only say to those that made such stupid remarks above, please identify yourselves when you next have an accident and the chopper arrives.
As regards the error, yes one lady made it (who is now distraut as you can imagine) and one checking officer missed it in a check -it happens in all businesses, occasionally, but when its a bank it can be a big number depending upon how lucky or otherwise you are. And yes systems do kick in and that was how they only got away with an initial amount, but systems picked up and stopped the second amount.
Yes I was equally frustrated by the media’s inept reporting of the event in stating that the bank had credited money to the account. But then what’s all the debate about whether its fruad/criminality one way or the other – if you knowingly take more money than is knowingly yours, or given/loaned to you, its criminal. They knew $10k is not $10m, its fraud – the minute they spend from that account an amount unquestionably more than the $10k, its a criminal prosecution
Vote:May 27th, 2009 at 8:48 pm
Please tell me where I am wrong. I understand that;
Vote:(1) The bank did not put $10mil in the person’s account.
(2) The bank offered to lend that person $10mil.
(3) The bank intended to offer to lend that person $100,000.
(4) That person borrowed ( I said borrowed, I did not say took) several million from the bank.
(5) That person will be punished with obscene overdraft service commitment fees on the $10mil facility.
(6) That person will incur usurious rates of interest on the sums drawn down.
(7) That person will appear as a doubtful (as distinct from bad) debtor in the bank’s books over the next few months.
(8) That person borrowed several million from the bank, and until he fails to repay that sum I cannot see any fault here.
Either I am naive or I am bewildered. Give me an opinion.
May 27th, 2009 at 9:11 pm
Kia ora Tauhei, it seems you are both naive and bewildered. Or worse.
1) Correct, the bank did NOT credit their account $10 million
2) Wrong, Westpac did not offer to lend them $10 miilion
3) Correct, as far as I know
4) Wrong, the account holder stole money from the bank, as he drew down more than was agreed and approved by the bank.
5)Wrong, I would assume the OD limit has been withdrawn, but he will be racking up a fortune in interest charges! At the casual rate of course I presume!
6) Yes, see above
7) The provision for the bad & doubtful debt will be crystallised before the next half-yearly balance date, and will be the net of the debt less the value of any realisable securities.
8) Wrong wrong wrong! As soon as he drew down more than was agreed with Westpac, deliberately, then he stole the money. The bank should have given him a letter of disclosure at the time of the OD limit approval, detailing the amount approved etc.
It is simply opportunistic theft, nothing more or less, and he/she(?) deserve the full weight of the law coming down on them.
Finally, the banks have very strong audit trails and I would be surprised if these funds can’t be traced to where they may be now. You can’t simply walk into a bank and withdraw $x miilion in cash.
Vote:May 27th, 2009 at 9:40 pm
Heathcote,
Vote:A few years ago I had a $5000 overdraft limit and had about $30k on call deposit. I forgot to flick some bread from the call deposit and hence exceeded my overdraft by about $15k for two days. That is, I drew down more than was agreed and approved by the bank. By your reasoning I had committed theft from the bank.
Absolute nonsense.
The only theft was the horrendous fees debited to my account, which were reversed when I pointed out how oppressive the fees were.
Your greeting suggests a knowledge of te reo. Having attended to accounting for a large number of Maori incorporations I get the impression that you might be the brains trust on one of those incorporations.
May 27th, 2009 at 10:11 pm
Tauhei – do you consider that some sort of reasoning ? It was your money there at all times, just an administrative cock up on your part that cost you some money – the issue is all about intent. Clearly you had the money there, took no more than you had, be it from the wrong account. This guy stole money that he knew he was not authorised to do in terms of the offer letter Westpac gave him that stated $10,000 – no comparison, stupid argument
Vote:June 1st, 2009 at 11:43 pm
Whilst there seems to be a little more knowledge of what went on here than the press seems to have reported I must ask if anyone knows what communication went on between bank and customer after the facility was made available. It would only take one call to the bank to ask if the amount was right to change the whole ball game. If that call was made and the banks agent confirmed the sum as correct then we move from an error of fact to an error of law and the customer is perfectly entitled to draw down as much of the sum as he liked.
Vote:August 9th, 2010 at 4:27 pm
I am deeply happy that this has happened to Westpac, It is a deeply noxious bank workplace with an extremely callous management culture. I see more and more egg is left on Westpac’s face over the years following the initial mistake, which is exactly what it deserves from its policy of hiring from lower castes of New Zealand society in order to pay some of the worst salaries in the business. The joke has always been on Westpac’s New Zealand customers for putting up with really poorly trained monkey shoddiness and now chickens finally home to roost with a wonderful brutality.
Vote: