Ever transferred money into the wrong account?

This article is timely because I have just paid in a cheque to a charity account, at a local HSBC bank. I am fairly sure that I got the sort code and account number right, but wondered what would happen if I had made a mistake.

malcolm r – In the facts of this case it would be a matter of the RBS rcovering money from RBS which should not be that technically difficult. And to be honest a payment for an odd amount to a loan account either dormant or in arrears should flag up a signal that something is happening and it is unusual.

Where a Bank pays away money to a third party on the basis of wrong instruction from the person making the payment that I suggest is a different matter. Generally speaking if the recipiet has unknowingly spent the money it is possibly a write-off however if it has gone to the coffers of ICI ltd then it should be recoverable.

Now this was Banking Law however the Banks have been busy introducing new practices which are efficient from the point of view of the Banks and in some instances are being quoted even where they disagree with previous practice.

One example is the checking of signatures on cheques which has largely been dispensed with. This facilitates the truncation of cheques where they are paid in so that they never reach the branch they are drawn on so they can be checked for irregularities. Now you might think this would be done where the cheque is paid in but I suspect if so it is very cursory.

One of the benefits of online banking is that if you manage to input the details of a payee correctly then there is little chance of making a mistake with future payments to the same person/organisation because the details have been recorded. That’s just one of the good reasons for switching from cheques to online payments.

The Payments Council website (link in Harry’s introduction) has an encouraging statement: “Following the announcement in July 2011 that banks and building societies will continue to issue cheques for as long as customers need them …” I am one of those who does not want to use cheques but needs them, for reasons I have explained in other Conversations.

I recently tried to pay cash into an account as I don’t have an online account.

I was told that they could not verify with the account name and they didn’t know what bank it was.

Why on earth can’t they cross check with the name of the account?

I shall have to issue a cheque now because what is on offer isn’t good enough. Remind me – who exactly is the customer? You don’t actually need to because there is no doubt – I most definitely am – and I don’t have to stay one.

I got trapped by a gumtree ‘seller’ but natwest did not bother at all. I know it was my mistake but they could have at least try to do something. They never asked me for details. I changed my bank after that.

http://en.wikipedia.org/wiki/Gumtree

For background. I did not know it has been owned by eBay since 2005 which is a bit of a shock when you are trying to avoid using US firms with dubious track records on internet security and scams.

“3 July 2014
Scammers are using online marketplaces to trap victims into dodgy deals, new research from Citizens Advice finds today. An analysis of problems reported to the Citizens Advice consumer service, between October 2013 and March 2014, about products or services bought through Gumtree and eBay finds:

1 in 6 (17%) from Gumtree was a scam or potential scam.
1 in 10 from eBay was a scam or potential scam.

The analysis looked at the 649 Gumtree cases and the 3,711 eBay cases that were reported to the consumer service between October 2013 and March 2014. ”
http://www.citizensadvice.org.uk/index/pressoffice/press_index/press_20140703.htm

This test is very sensible – I also do it when initially transferring money between a new savings account and my current account just to make sure it all works.
I asked my bank about data used when transferring money online or by check and, unsurprisingly, they replied:

“When making a payment or writing a cheque the funds would go into the sort code and account number provided. The payee name is normally used for your reference, so that when the funds leave your account you know what they are for or who they are too.

If in the case you were to incorrectly quote the wrong sort code or account number, we could look into reclaiming the funds.”

We have a responsibility to be careful when doing these transactions. There are times when, although a bank will do its best, it will be unable to reclaim misdirected funds. We cannot hold them responsible for our mistake, can we? If we expect them always to refund you, that simply means other account holders will be paying for your mistake – the funds must come from somewhere. Is that fair? I don’t think so.

Here is a proposal which should avoid any mistakes causing loss. Anyone with an account to which electronic transfers may be made would choose an ID for it comprising a string of characters – this could be a name, number, or just a random jumble, and it wouldn’t have to be unique. When they give you their account details, for you to make a payment, they would include the ID. At the time of your setting up the new payee, your bank would contact the recipient bank to (a) confirm that the account exists and (b) obtain from it the ID, for display to you, before you finally confirm the payee as correct. Then you’d have positive confirmation that you had correctly typed the other account details.

Some additional refinements for security are desirable, but that is the main gist of it.

Do we know how many transactions are misdirected by the payer putting in an incorrect sort code or account number? And do we know how many of these are not recovered. Useful information to see the scale of the problem.

The topic of transfer of funds to the wrong account is discussed on today’s Moneybox, on Radio 4. You can listen to the programme on iPlayer.

A couple of banks are introducing terms and conditions that will enable them to recover money paid in error. The international bank number, which I mentioned earlier, is briefly discussed would overcome the problem of funds paid into the wrong account, but the banks would have to invest money bringing their inadequate IT systems up to date.

It’s time for action and not excuses.

Having once entered the wrong sort code on a transaction and finding that I could not get the money back (it was only £16, so I was lucky), for new recipients, I also send a very small amount first (£0.01) and then when I get confirmation that it’s arrived, I send the balance.

There is one problem that I have found when using this technique – several times, large payments have been blocked by the fraud department of the bank and I have had to go through a lengthy telephone process to prove my identity.

I’ve experienced the opposite transfer issue. Last year I had a significant amount of money withheld by HMRC, as tax. After a lot of ‘communication’ they agreed to transfer what I was owed, but then proceeded to pay the money to a complete stranger. Even though they admitted to their mistake, it took from June to September to finally get my money.
I’ve been afraid of doing any transfers myself partly because of my experience with HMRC and also because whenever I’ve expressed my concerns of potentially losing my money with the bank they’ve never been very reassuring as to how the money would or could be retrieved.

GOOD NEWS FOR A CHANGE

Earlier this year I lost my CapitolOne credit card. After being issued with a new one the account number was also changed.

When the statement arrived .I set up a new payment mandate with my NatWest Online Banking and paid it without any concern. But I had incorrectly entered the new account number.

A week or two later the next statement arrived and showed a missed payment – that is when I started retracing my steps and spotted the error.

Panic set in because it was no small amount. Had I made an expensive, unrecoverable mistake?

I started gathering data in order to phone the bank in the morning for advice, as I was checking my online bank statement and spotted that two days after the payment was made it was refunded without my intervention.

I was stung for a missed payment fee – but was relieved the two banks had resolved the issue before I was even aware of it.

***** Well done NatWest & CapitolOne ! ! ! ******

I am currently struggling to get a refund of £1500. I entered the wrong sort code as this intended recipient had given it to me incorrectly. I know it was sent to a Santander Sort Code but little more than that.
Barclays Bank do not seem to be dealing with this very efficiently and also don’t seem aware of the payment council guidelines.
After a month and a half they have received a correspndance from Santander stating I should contact the beneficiary directly. Marvelous, given I have no idea whom the account belongs to.

Barclays are now advising me to contact Santander directly and when I asked what my options were they had no idea. They haven’t mentioned court action or the financial ombudsman.

I’m a little underwhelmed at my banks response so far.

Please help, I asked my daughter to pay bill for me on line, I erroneously put 9 digits in but when she paid it by blocking and copying number Nationwide on line payments dropped last digit, system asked her to confirm number and then paid into a Santander account.
After much chasing they eventually sent a `best and final endevour’ letter to the person who got the money and they have not responded.
Nationwide paid £150 compensation for the lack of prompt response but say it is up to FOS to chase further. FOS refuse and Nationwide will not pass letter to Santander to pass to client to try and get money back.
We have been told to go to Police or try Small Claims court but without a name of account holder seem blocked at every turn. Where can we go from here?

“complaint upheld
We listened to what both sides told us and reviewed the relevant facts of the case. This included viewing screenshots of the steps Mr B would have gone through to make the transfer.
We did not consider that the bank had given Mr B sufficient opportunity to check the transaction details. In particular, we noted that there was no “final confirmation” page.”

The link seems to be for old cases but interesting nevertheless.

There needs to be an understanding that there is Banking law, and banking practice when I studied in the last millenium. Banking practice might be seen as a mix of common law and how banks liked to operate – and thus was a changing beast. Banking Law was decided cases and outlined the relationship between customers and banks.

My gut feeling is that Banking Law may actually still exist but the British Banking Association is not very keen on old laws. The regulators may not be au fait either.

Lastly it is rather grimly funny that having achieved the near instantaneous transfer of money in the UK and overseas we are now appreciating the fact that cheques actually could be safer BECAUSE they are slower AND the accepting banker has to check the payee is paying into the named account.

I have been reading the comments above and am horrified to find out that there is not much that can be done. I am in a similar position as the case above regarding Barclays. I am considering reporting my case to Action Fraud as this must fall under Dishonestly retaining a wrongful credit. If I do is there a chance that I will get my money back

We are still trying to get £200 back. When we realised the mistake, within a day of the transfer, Nat West were informed and advised that the money could not be re-called. Several calls from a mobile were made and conflicting information provided. Yes we could re-call and no we could not. Approximately 20 days on we were told we could re-call, then advised it was too late as it was already in somebody elses account. Eventually we were passed to Halifax who passed us back to Nat West, who passed us back to Halifax and so on!!!! 1 year on we have not had any resolution and Halifax refused to pass a letter on to the recipient advising of legal action if they did not pay the money back, even though Nat West advised us to send this letter.
The system of Faster payments needs reviewing, most people like ourselves believe the 3 pieces of information need to tie up, Name, Sort Number and Account number, In fact only a sort number and account number are required and therefore this is why so many mistakes are made.

Recently, we have transferred two amounts in US$ dollars to a wrong account number with ING Bank Slaski SA, while the account name was correct, in Poland. These account details were sent to us by hackers exactly as per our principals letter head, saying the change of bank account details and without noticing this, thinking it was from our pricipals, we transferred unfortunately. One amount credited back, but other amount of US$45617/- still not credited back. we have been following with our local bank, but they are waiting for the reply from receiving bank. Is there any chance of getting back this money.. Please advice.

I transferred £10,000 into the wrong bank account (Danske Bank to Nationwide) and the recipient spent it all. I only realsied10 days afterwards. The banks were very slow and confused and only had a notification well beyond the 6 weeks deadline. The ombudsman found against me saying that although the banks were slow, the money went out so quickly.
The payments council has not responded to me either.
It seems I have to find a good solicitor, chase the recipient and even then I may not get my money back as well as incurring solicitor’s fees.
Does anyone know a solicitor who has experience with this issue

I recently cashed in £1000 premium bond monies online to help my daughter out of financial difficulty, after lots of chasing from Ns&I and nationwide it was discovered one digit of the account number was entered wrong, 3 months later I recently been told that the account holder who the monies went to have ignored all correspondence from BS and that they cannot refund my money to me. It now has to go to a small claims court and even then there’s no guarantee that I will receive my money back! This was all due to the fact that one digit on the account number was entered wrongly. The BS did not check the name. Surely they must take some responsibility for this too also why when they’ve got all the evidence they can’t take the money back from the account holder who received this payment?

I mistakedly put 4500 in a persons nationwide account via my pay pal, pay pal won’t retreive the money, they say it was my fault, the recipients bank won’t return the money , they say pay pal should do so, I am at a loss as to what to do to get money back .

Always go to the bank and get a teller to transfer then if anything goes wrong it’s their fault. I worked for Barclays, transactions are easily reversed (the money is only electronic anyway)

I have first hand experience of banks misreading the amount written on cheques. It was not until I received my monthly statement did I notice my boiler service had an extra digit added taking it into the £900’s instead of £90’s ( can’t remember the exact amount). I immediately took the matter to my local branch who acknowledged the error because the wording on the cheque clearly stated the correct amount. A few days later I received a ‘phone call to say the amount overcharged had been refunded back into my account.

I contacted the boiler company who received the money who tried to fob me off by stating they couldn’t make out where the money had come from, obviously hoping I wouldn’t check my bank statement. Thankfully there was sufficient money in my account to cover the extra payment so it didn’t involve the extra hassle of going overdrawn.

This is a true story and it demonstrates that banks do make mistakes and it pays to keep a constant check on your banking transactions, whether you bank online or any other way. I did ultimately save from this whole experience by switching boiler companies to one that granted special discounts for seniors 🙂

same has happened to me only this week, very similar to a previous post i copied and pasted the account number i needed to send online payment to and the barclays page flagged up i needed to add zero before that number , as it was going to nationwide account , i was not aware that by adding a zero the end digit would then be knocked off, i sent the payment 950 pounds and it turns out it has gone to a different account, i phoned barclays within 30 mins and was told to call back in 2 days, i’ve since emailed them today and had confirmation that they will try and reclaim my money and notify me within 25 days of outcome, but cant guarantee anything….. will now have to wait and see, if all else fails will contact ombudsman .
so someone not expecting it gets my 950 pounds, and my bank and there bank cant get it back, doesnt make sense to me.
next time i will stick with card payment or paypal, expensive lesson learnt, but will wait and see outcome before i drown my sorrows .