
Citigroup clerical error of $900M; a beneficiary refuses to hand back $175M - scarface74
https://en.mercopress.com/2020/08/19/citigroup-with-a-record-clerical-error-of-us-900-million-a-beneficiary-refuses-to-hand-back-us-175-million
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thaumasiotes
What a shockingly detail-free "article".

I tend to agree that Citigroup has the better argument, but this is weirdly
lopsided coverage. Revlon's bank repaid Revlon's loan using money Revlon
didn't have. Oops! But that's not clearly a reason for the lender to return
the repaid loan.

What happens if I pay one of my bills and realize later that it would be more
convenient for me to have paid less so I'd have more money for whatever else?
How do I claw back the amount I now wish I hadn't paid?

~~~
542458
Agreed. The previous article posted to HN was better IMO.

I feel it’s relevant that Revelon’s loan hadn’t actually come due yet.

I think it’s also relevant that Citigroup didn’t send Revelon’s money, they
sent Citigroup’s money. “Somebody at Citigroup owes us, so any money coming
from that general direction is ours” feels pretty flimsy to me.

It’s also relevant that Revelon is not looking so healthy, and is widely
expected to go into bankruptcy protection before repaying Brigade.

But I think Brigade’s math is pretty easy here - gambling a 15 million on
lawyers for even a small chance to (effectively) make 175,000 million might be
a good bet.

~~~
user5994461
I don't think it's material which department in citigroup owns which account.
Citigroup is responsible for all the money as a single entity.

When you work in a company and pay a supplier, you don't get to chase the
supplier and ask for refund saying you cut a check from the wrong company
account. This is down to your company, it's your company problem.

~~~
542458
A company is a single entity, but a bank is representing many entities, so I
do think it matters which entity the bank was representing at that point in
time.

If I overpaid a contractor by mistake, I don’t think that contractor should
get to keep my money under the logic that somebody else who uses the same bank
also owed that contractor money.

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bradleyjg
If I owe you money and John Smith knocks on your door, hands you a pile of
money, and says “this is from bradleyjg to pay off his debt” I think it is
entirely reasonable to rely on that representation. You lent money, it was
paid back by the borrower’s agent, the transaction is over.

~~~
ineedasername
Except they didn't say that. They sent it by accident. And there's decades of
case law siding with banks against "bank error in your favor" situations.

~~~
thaumasiotes
> Except they didn't say that. They sent it by accident.

You're half right. They sent it by accident.

~~~
ineedasername
There's no indication in any reporting that the money was sent with a note or
memo saying "this is to pay the full Revlon debt". To all known facts, they
simply sent the money.

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samcrawford
Received a lot of discussion 3 days ago here:
[https://news.ycombinator.com/item?id=24222045](https://news.ycombinator.com/item?id=24222045)

~~~
Animats
Yes, previous article was better.

Bloomberg article is better.[1]

[1]
[https://www.bloomberg.com/news/articles/2020-08-17/citibank-...](https://www.bloomberg.com/news/articles/2020-08-17/citibank-
sues-brigade-capital-management-over-mistaken-transfer)

------
jdoliner
Bank error in your favor, collect $175M.

~~~
tyingq
At the very least, I'd charge them something for the error. Banks aren't shy
about charging customers for errors. A 1% return fee maybe, on top of whatever
it costs me.

