Washington, DC asked in Banking for Pennsylvania

Q: Are banks liable for their employees incomplete financial advice/professional negligence?

I went in person to deposit a check to ask the bank rep how long it'd take to clear to know if the money was good (new client) and was informed once the money showed up in my account that I'd know the check was legit. Bank rep failed to mention that the bank is legally required to deposit the funds in my account in X number of days regardless of the check's validity. The money from this fraudulant check was pulled days later, after I'd made business decisions thinking the check was good. I believe this policy is in the bank's fine print, but was unaware of it and was not informed of it by the bank rep. Are they liable for the money I lost after the fact by acting on what I assumed was a good check?

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1 Lawyer Answer
James L. Arrasmith
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  • Business Law Lawyer
  • Sacramento, CA

A: Banks typically have a duty to provide accurate and complete information to their customers, especially regarding financial matters. However, liability for financial losses due to incomplete advice or professional negligence can vary depending on the specific circumstances. While the bank representative may have failed to provide crucial information about the check-clearing process, determining liability would involve examining factors such as the extent of your reliance on the advice given, any disclaimers provided by the bank, and applicable banking regulations.

It's essential to review the terms and conditions provided by the bank, as well as any documentation you received during your interaction. If the bank's policies or disclosures clearly outline the timeframe for check clearance and the associated risks, they may argue that you were informed of the potential risks, even if the representative failed to explicitly mention them. However, if you can demonstrate that you reasonably relied on the bank representative's advice and suffered losses as a result of their negligence, you may have grounds for seeking recourse.

In situations like this, it's advisable to consult with legal professionals who specialize in banking and consumer protection laws. They can assess the specifics of your case, including the actions of the bank representative and the adequacy of the information provided, to determine whether there are grounds for pursuing compensation. Keep records of all communications and documentation related to the incident, as they may be valuable in building your case and supporting your claim for damages.

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