Banking Banking Basics

What Can You Do About Bank Errors? A Practical Guide to Protecting Your Money

From missing funds to surprise deposits, here are some tips on what you can do about bank errors and how to handle them without panicking.

By Danielle Letenyei

Edited by Sarah Fulghum

Updated Sept. 5, 2025

What would you do if unexpected money shows up in your bank account? If you weren't expecting a sudden windfall, chances are it was a bank error, and you should promptly contact your bank. The money isn't legally yours to keep.

Let's look at bank errors, exactly what to do when you discover one, and your rights and responsibilities for handling those errors.

Key takeaways

Bank errors can take different forms, ranging from unauthorized withdrawals to mistaken deposits.
If a mistake benefits you, the money isn't legally yours to keep.
Acting quickly gives you the best chance of resolving the error.
In most cases, banks are required to complete an investigation into the error within 10 business days and correct confirmed errors within one day.

What is considered a bank error?

A bank error is a mistake made by a financial institution that causes an incorrect transaction that affects a customer's account. Bank errors can be made in your favor or not, and can impact any type of account, including checking and savings accounts. Either way, they must be reported to the bank as soon as possible. Under the Electronic Fund Transfer Act (EFTA), you are protected from unauthorized transactions to your bank accounts as long as you report this issue promptly.

Some examples of common bank errors include:

Duplicate charges: These occur when the same transaction is posted to your account more than once.
Wrong deposit amount: A simple input error by yourself or a bank teller can result in a deposit that is more or less than what you actually deposited. For example, accidentally adding an extra zero can turn a $100 deposit into a $1,000 deposit.
Unauthorized transactions: This is when withdrawals or purchases are made against your account without your approval.
Incorrectly applied payments: This is when your loan or credit card payment is credited to the wrong account.
ATM errors: ATMs may dispense the wrong amount of cash or fail to record a deposit accurately.

When a bank error takes your money

Finding out that money is missing from your account can be alarming. But, before you go into full panic mode, review your account history carefully to confirm that the unknown transaction was really a mistake. Some charges, such as pre-authorization at hotels or gas stations, can appear odd but usually fall off within a few days. Bank statements typically include the payee on transactions, but sometimes the information is not very clear. I've called phone numbers listed on transactions on my bank statement to find out what an unfamiliar charge was for when it wasn't clear on the statement.

If you're sure it's an error, contact your bank right away. Your liability for unauthorized transfers from your account is capped at $50 as long as you report the transaction within two days of finding out about it. Once you've reported the error, your bank must complete its investigation into the error within 10 business days. However, this timeframe can be extended to 45 days if more investigation is needed. If the error is confirmed, your bank must correct the transaction within one business day.

When a bank error gives you money

If the bank error gives you money, you may think you've hit the jackpot. But, hold on. While it may be tempting to treat an unexpected deposit as a lucky windfall, it's not free money. Banks are allowed to reclaim deposited funds made in error, even if you've already spent them. Additionally, spending money that isn't technically yours could be considered fraud and result in criminal charges.

For example, in 2019, a Pennsylvania couple was charged with felony theft after they spent $120,000 that was mistakenly deposited into their bank account. The error happened after a bank teller accidentally entered the wrong account number.

When a bank teller makes an error

Tellers are only human, and they can make errors. A cashier's check can be misprinted, the wrong amount deposited, or cash counted incorrectly. If you notice a mistake while you're at the counter, point it out immediately so it can be corrected. If you catch the error later, ensure you have your receipt and return to the bank as soon as possible to fix the issue.

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FAQs

How long does a bank have to correct an error?

After you report an error, the bank has 10 days to investigate the matter. If further investigation is required, this timeframe can be extended to 45 days. Once the bank has completed its investigation and confirmed the error, it must correct it within one business day.

Can you get compensation or sue for a bank error?

Yes, you can sue a bank over an error, especially if that error was due to negligence, unfair practices, or if it caused you financial loss. However, most errors can be fixed without needing legal action.

Are you responsible for bank errors?

No, you aren't responsible for bank errors, especially if they are made by a teller or the bank's system. However, you are responsible for reporting any errors to the bank promptly. That includes errors that are in your favor. Failure to report money in your account that shouldn't be there has consequences. The bank has the right to take the money back out of your account, even if you have already spent it. Worse yet, you could face criminal charges.

What is an example of bank negligence?

Examples of bank negligence can include repeatedly failing to process deposits correctly or allowing unauthorized withdrawals to continue without investigation. A bank can also be considered negligent if it fails to protect your personal and financial information, which may lead to identity theft or financial fraud.

What agency holds banks accountable?

Banks in the U.S. are regulated by several federal agencies, including the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC).

Consumers are protected in banking matters through the Consumer Financial Protection Bureau (CFPB). The CFPB oversees how banks handle consumer complaints and enforces rules to protect account holders. It is usually the best starting point for filing a complaint about bank errors.

Bottom line

Bank errors happen, but they don't have to derail your finances. Whether money goes missing or shows up unexpectedly, the best thing for you to do is contact your bank as soon as possible. You should also keep records that you can show the bank. Federal protections are in place to limit your liability and ensure errors are corrected as long as you report them promptly. Remember, unexpected money in your account isn't rightfully yours, so don't go on a spending spree.

And if you're looking for a bank that will take care of you as a customer, start with our list of the banks with the best customer service.

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