In this age of technology, money is being transferred electronically on a daily basis. We pay our bills, we transfer money to our friends for dinner and we help out our family. More and more, this is happening by way of electronic funds transfer.
Most of us are incredibly diligent in double and triple checking that we are sending money to the right account, however we are also human, and accidents happen. So what happens if your fingers slip and you transfer money to the wrong account?
Don’t panic! Firstly, you should immediately tell the service you used to transfer the money (in most cases your bank). Do not delay in notifying your bank because the earlier you identify the mistake the better the chance to fix the mistake.
The bank will then usually work with you to confirm that a mistake was made and if possible stop the payment before it has actually hit the receiver’s account. In a lot of cases, if you have just simply entered a wrong number in the account number, the funds will bounce back, because of back-end checks employed by the bank, however sometimes this won’t occur so you do need to tell your transfer service as soon as possible. If you funds haven’t bounced back, then your transfer service or bank will then notify the recipient’s bank that there have been funds incorrectly transferred to the recipient. The recipient’s bank and your transfer service will then work together to try and have the funds returned to you. If, in the worst case scenario, your bank or transfer service is not helping you at all then you can lodge a dispute with the financial ombudsman and seek their assistance.
Bear in mind that timing is key. According to the Financial Ombudsman if you report a genuine mistake within 10 business days, the funds will be returned to you. If you report a genuine mistake within 10 business days and 7 months, the recipient’s bank will freeze the funds and if the recipient cannot prove they are entitled to the funds, the funds will be returned to you. If you do not notice the mistake for over 7 months, then the recipient of your funds is not actually obliged to return them to you unless they agree. So the longer you wait, the harder it is.
As such, the take home messages here are:
- Quadruple check your BSB and account numbers for each electronic transfer, each time you make an electronic transfer; and
- Notify your bank or transfer service as soon as possible (immediately if you can) as to the mistake so that steps can be taken quickly to have the funds returned to you.