Bad Advice: Money Changers and Other Professionals

Among the services offered by a money changer is to advise people whether their money is real or counterfeit. It is somewhat common, especially in the olden days, for people to bring their currency to a money changer before (or after) a trip or business transaction in order to ensure that it wasn’t counterfeit.

What if the money changer makes a mistake and advises a customer that a certain coin or bill is authentic, but it is later found to be fake? Or the reverse? Who is responsible for such a mistake? Is the money changer accountable for the advice he gives, or is the innocent customer left to absorb the loss on his own?

The halacha in such a situation depends largely on whether the money changer was paid for his services. If the money changer wasn’t paid for his services and gave the advice “off the record,” he is generally not liable for any loss or damages that occur due to his faulty advice.^[1] However, if the money changer was paid for his services, then he will usually be liable for any losses that occur as a result of his advice.

Indeed, any professional who causes loss or damage to another person due to faulty advice is generally not responsible if the advice was given voluntarily or “off the record.”^[2] If, however, the professional was paid for his services, then he will usually be liable for any damages that occur as a result of his advice. It goes without saying that one cannot intentionally dispense false advice regardless of whether one was paid for it or not.^[3]

A similar question can arise after money changes hands between two people. For example, what if someone discovers, following a business transaction, that the money he received was counterfeit and now demands a replacement?

There is a dispute among halachic authorities whether the one who paid the money in question is required to replace it. Some authorities rule that the money must be replaced even though the transaction took place some time ago. According to this approach, the burden of proof is upon the one who owed the money to prove that he successfully paid it.^[4]

According to most other authorities, however, the money in question need not be replaced. Among the reasons for this is that following such a transaction, the two parties generally part ways in a manner that demonstrates that their business is officially concluded, such as with a handshake or the like. Furthermore, since most money in circulation is not counterfeit, it is likely that the money in question was not counterfeit, either. Therefore, the only way to compel repayment is for the injured party to prove that he was given counterfeit money, which is almost impossible once the two sides have parted ways.^[5] It appears that common custom is in accordance with this view.

It is important to note that the liability of a professional regarding his advice depends on his expertise. If the professional is a certified expert in his field then he is not liable to pay for bad advice, provided that his advice was given free of charge. If he is not an expert, then he is fully liable for the loss and damages his advice caused (if he knew it would be relied upon) even if the advice was given for free! The reason that the halacha is more lenient with an expert is because his faulty advice is considered to be an unforeseen mistake (“oness”). As long as he is a true expert and tried his best, he will usually not be liable for mistakes he makes. An amateur, however, should know better than to give advice on issues that he is not an expert!

[1] Bava Kama 99b.

[2] Be’er Esek 94; Devar Yehoshua 5:3.

[3] CM 306:6; Netivot Hamishpat, CM 306:14.

[4] Pitchei Teshuva, CM 75:24.

[5] Taz, CM 75:25.