Legal Question in Banking Law in Indiana
Can a Bank really do that?
My fiance is receiving disability checks.When he got his first check it was a large lump some for back pay.He needs a representative payee to handle his funds so he selected his mom.She opened a joint banking account (which was not the way the social security said to do it)and deposited the money.About 2 weeks later he found out that she was spending his disability checks for herself.We went to the bank and closed the account since it was a joint account it only took one signature.She called the bank and threatened to sue them for letting us do that.She refused to sign the check since it was in her and his name. She then put a stop payment on it and then submitted the correct papers to the bank on how the account was suppose to be set up. They then redeposited the money in the new account and made our check void. Are they allowed to do that? I was told that as long as we had the check it was usless money.I am now the represenative payee and the bank knows that and they continue to let her have access to that money and she is suppose to return it. There is now over $4,000 missing.Please inform me of the rules that the bank must follow when it comes to this sort of case. Thank you.
1 Answer from Attorneys
Re: Can a Bank really do that?
I need more information-if your fiance deposited his money into a joint account requiring only one signature, anyone who is a signatory or joint owner of the account can access the funds without anyliabailty for the Bank-simply put, your fiance authorized the bank to pay his mother or anyone she paid by writng a check.
As to the check, I assume it was not a cashiers check or money order since the bank could not stop payment on those items.
I do not understand what you mean by "she submitted the correct papers to the bank on how the account was to be set up"
Your fiance may have a claim against Mom for conversion but with out more detailed info I cannot opine as to liabailty by the Bank
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