Citigroup clerical error of $900M; a beneficiary refuses to hand back $175M

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

by scarface74 • 6 years ago

22 18 6 years ago

en.mercopress.com

thaumasiotes3• 6 years ago

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?

5424582• 6 years ago

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.

user59944612• 6 years ago

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.

PierceJoy• 6 years ago

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.

I think the point about it being money Revlon didn't have is important. The money came from the bank's accounts, not Revlon's. The owner of that account (Citigroup) had no debt owed to Brigade, so I don't think the bill pay analogy is quite apt. This seems like nothing more than an accidental transfer, which happens all the time and are always reversed.

simonh3• 6 years ago

That’s you paying the bill you owe though, in your example. Citigroup doesn’t owe the money though.

thaumasiotes3• 6 years ago

Citigroup is the only party responsible for paying the bill. They do not themselves owe the money, but any legitimate payment would come from them. So, as the lender, what's the difference?

samcrawford• 6 years ago

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

Animats• 6 years ago

Yes, previous article was better.

Bloomberg article is better.[1]

[1] https://www.bloomberg.com/news/articles/2020-08-17/citibank-...

jdoliner• 6 years ago

Bank error in your favor, collect $175M.

tyingq• 6 years ago

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.

Citigroup clerical error of $900M; a beneficiary refuses to hand back $175M

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