Mistakes happen from time to time, no matter how much care we take. Two transposed numbers on a deposit slip or a moment of inattention while doing internet banking and unwittingly your money has gone to the wrong person. The question is: what can you do to get your money back?
It goes without saying that you need to take care when entering and giving out account numbers. They are a crucial piece of information because transactions are processed by account number. Banks will often ask for an account name as well as account number, but their systems don’t check that they match.
Sending a payment to the wrong account
Contact your bank as soon as possible after realising your mistake. The sooner you do this, the better your chance of recovering your money. If your money went to an invalid account, it will usually bounce back into your account.
Retrieving a mistaken payment to a valid account can be more difficult. As a general rule, banks can reverse a payment made in error only with the consent of the person who received it. Your bank and the recipient’s bank will need to co-operate to try to recover the payment. This usually involves the recipient’s bank contacting the account holder to ask his or her permission to reverse the transaction.
If the recipient refuses, your only option is to take up the matter directly yourself. However, the bank’s responsibility to protect the privacy of the recipient’s contact details may prove an initial stumbling block. You may wish to take court action if the recipient won’t return the money. We recommend you seek legal advice if faced with taking such a step.
Receiving an unentitled payment
The same applies: you should contact your bank as soon as possible to advise it of the error. And once you have been asked for your consent to reverse the payment to its rightful owner, you should agree. Some people feel they should be allowed to keep money paid into their account, but in general they should return money that does not belong to them.
Someone receives money meant for you
If someone owes you money but deposits the money by mistake into someone else’s account, it is not your responsibility to chase it up. The person who made the mistake is responsible for trying to recover the money, and whether successful or not is still obliged to pay you.
It is a different matter if you have given the payer the wrong account details. In that case, the payer has simply followed your instructions, so you must bear the loss if the funds can’t be retrieved. You should ask the payer to seek the recipient’s consent to retrieve the money. If the recipient won’t return the money, you may have to take legal action.
The sooner you contact your bank after a mistaken transaction, the better your chance of recovering your money.
Bank not obliged to give accuracy warning, but did anyway
A company, AB Ltd, bought an online payment system from a bank to help manage its accounts. It chose the product after the bank said it was more secure than ordinary internet banking. An employee at the company made an online payment, but incorrectly entered the seller's bank account number. The funds were transferred to Sam’s account, a customer at a different bank.CASE 2
Bank without legal basis for using collection agency to get $70,000
Sophia’s business partner owed her $130,000. The business partner instructed his bank to break a $200,000 term deposit and pay her what she was owed. The bank mistakenly paid Sophia $200,000. When it realised its mistake, it asked her to repay $70,000.The bank warned it might take legal action or use a debt collection agency if she did not.CASE 3
Refusal, not delay, behind non-return of money
Lee wanted to transfer her credit card balance from bank A to bank B. While completing a form at bank B to authorise the transfer, she entered the wrong account number. As a result, her money went into a Alex's account at bank A instead, leaving her with a debt at both banks.
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