Imagine, for a moment, you’re organizing a large-scale event with a long checklist of details to manage. Now imagine missing one tiny detail and having it cost you a whopping quarter-million dollars! That’s precisely the scenario that unfolded for Star Financial Services, Inc., a prominent ATM operator, in their dealings with Cardtronics, USA, Inc. The United States Court of Appeals for the Fifth Circuit reversed the District Court’s grant of summary judgment in favor of Cardtronics.
Star Financial operates a vast network of ATMs across Maryland, the District of Columbia, and Virginia. They signed a contract with Cardtronics to handle the electronic transfer of funds associated with their ATMs to keep the wheels turning. The setup process for this arrangement required Star Financial to provide Cardtronics with specific account details. A system that worked smoothly until it didn’t.
In 2015, Star Financial submitted the setup forms for three new ATMs. However, they mistakenly provided an account number belonging to a third-party merchant instead of their Settlement Account. Realizing their mistake, they sent a correction the next day, but Cardtronics only corrected one of the three ATMs. This discrepancy led to $250,000 being directed to the wrong account.