In my previous blog post, I wrote about going to a branch of Dakota Community Bank in Dickinson where I have a checking account, and asking a banker if someone stole a check out of my checkbook, forged my signature, and wrote out a check payable to themselves or someone else, would the Bank reimburse me when I discovered the money was missing from my account.  The banker replied, “No”.

I thought that I knew the law, but I wanted to see what banks in Dickinson thought the law was, and how they would handle fraudulent transactions on my account.  Though I was shocked at the banker’s response, I was afraid that that is what it would be.  I needed to know this, because now I know what to expect from this Bank if something goes wrong, denial of liability, and a fight with the Bank.

It turns out that banks are governed and regulated by a branch of the U.S. Department of the Treasury called “The Office of the Comptroller of the Currency” or the OCC for short.  The OCC says that banks are liable for reimbursement of forged checks, however there are a couple of pleas that banks use to try to get out of this liability.

In this blog post, I want to tell a story that was probably my first introduction to the institutional practice of large companies denying legal liability, in situations where they absolutely have legal liability, and their reasons for this tactic.

Almost twenty years ago, I was working for an elderly man who had at one time been the vice president of one of the largest commercial insurers in the U.S., I believe that he said it was USF&G.  One day, he wanted to tell me this story:

His company, USF&G, had a client whose parked vehicle was struck by a person driving another vehicle.  The parked vehicle was completely destroyed in the accident.  The driver of the other vehicle was insured, but his insurance company delayed and delayed paying for the damage.

At the vice president level, he did not normally handle the day-to-day business of individual accidents and insurance claims, but this particular case had risen through the different management levels at USF&G, because the other insurance company was delaying, refusing to pay for the damage to the USF&G client’s vehicle.

He got on the telephone with someone at or nearly at the level of vice president at the other insurance company and he said, “Look, you have no legal basis for not paying this claim, why won’t you pay this claim?”  The person at the other insurance company, with pride and satisfaction gave the following reply:

“We have found, that when there is an individual who is elderly in age, like your client, when there is an accident and they are owed money, if we delay and wait in paying the claim, often times they will die due to old age.”

The former vice president of USF&G said that the following day, a memorandum was issued to all departments at USF&G, stating that if anyone was ever caught trying to not pay a claim because the claimant was elderly in age, they would be out of a job.

Since hearing this story, I have read several newspaper stories over the years, where large banks and utility companies deny legal liability, because they have so many employees, so many millions in assets, and full time legal staff, that they feel that they don’t have to follow the law or treat customers in compliance with the law.

I have written before about newspaper stories where utility company customers enrolled in automatic bill pay have had all of the money taken out of their checking account for erroneous $10,000 water bills or electric bills.  The frantic customer contacts the utility company about the charges being a mistake, and explains that their normal water bill or electric bill is only $100 each month, how could they possibly have a $10,000 bill for the month?

In these cases, the utility company often sends the following response:  “Dear Customer, we have received your letter contesting the charges to your account.  We have conducted an internal investigation, and we can not find any error on our part.  The charges are correct, and are currently due.  Please let us know if we can be of further assistance.”

I have also written about newspaper stories where all of a bank customer’s money has been removed from their checking account through an erroneous debit card transaction, often for fuel at a gas station.  A debit for $8,000 worth of gasoline will appear on a customer’s account for one fuel stop at a gas station.  The customer will call the bank and explain that the charges are false, their vehicle fuel tank only holds $60 worth of gas.

In some cases, the gas station will side with the customer, saying that there is no way that this customer received $8,000 worth of gas, and the bank’s response is, “The charges have been approved, and they have gone through.  There is nothing that we can do at this time.”

Recently, a friend of mine who just turned sixty, he has been complaining to me about the tactics that he feels Sanford Health Care is using to deny him surgery.  About a year ago, he enrolled in Sanford Health Care medical insurance.  As part of this insurance plan, you are required to receive treatment at Sanford Health Care.

There are two different surgeries that he needs, he is almost always in pain due to his medical condition.  Though the medical doctors that have evaluated him, acknowledge that he has these specific medical problems that require surgery, he has been delayed and denied surgery.

When answering questions that the medical doctors have asked him, he did not know that they were seeking reasons to delay and deny him surgery.  In particular, they asked him, “How many days of work have you missed due to this medical condition?”  And he replied, “None”.

The reason why my friend replied none, is because he can’t miss work, he is not allowed to miss work.  I know the situation that my friend is in, and I know for a fact, without any doubt, that if he tried to not show up for work more than twice, that he would be out of a job.  The medical doctors took his response that he has missed no work, to mean that his condition does not require surgery at this time, when that is not the case at all, he is not allowed to miss work, and he is in pain all the time.

The other thing that my friend thinks that Sanford Health Care is doing to him, is delaying surgery in the hope and expectation that he will just die.

In the examples that I have just given about the banks, insurance companies, and utility companies, they have so many employees, so many millions of dollars in assets, and full time legal staff, that they are insulated and protected from caring, from guilt, from remorse, from responsibility, from personal legal liability and recourse.

The employees of these companies all go home at night and eat dinner, watch TV, and go to sleep without guilt, shame, or remorse, feeling no responsibility for taking all of someone else’s money, refusing to pay people money that they are owed, or denying people medical care that they need.  In fact, many of these employees are celebratory and proud of themselves for the money that they have saved their companies from paying, though legally they should have paid.