/ Money

Ever transferred money into the wrong account?

Picture of a pound coin

Our survey reveals that if you enter the wrong account details when transferring money, you may not get it back. Have you accidentally transferred cash into the wrong bank account?

What happens if you enter the wrong payment details when trying to transfer money online? Our survey of more than 5,000 people found that, while only 6% had inadvertently sent money to the wrong account, 16% of those who did couldn’t get their money back.

Affected by misdirected payments?

TonyTake Tony Moss – he entered one incorrect digit when trying to transfer £742 into his Royal Bank of Scotland account. His money ended up in someone’s loan account who’d left the country, leaving their debts unsettled. Tony was told by RBS that his money was irrecoverable – this was confirmed by both the Financial Ombudsman Service and in the small claims court.

Eventually Tony appeared on Nick Ferrari’s radio show on LBC and drew attention to his situation. His money was promptly refunded by RBS. Tony’s story shows the value of pursuing your provider in this situation – though he had to go to worrying lengths to get his cash back.

Can you get your money back?

The Payments Council recently introduced a Code of Best Practice on ‘misdirected payments’. This requires banks to act swiftly on a customer’s behalf if such a payment is reported. But the guidelines can’t guarantee that you’ll recover their money.

To protect your money, always double check you’ve entered the right details. And make sure to check your account’s T&Cs for your bank’s policy. Though money spent by recipients who can’t pay it back is untraceable, transfers to an invalid set of account details will bounce back.

We want to raise awareness around this issue, and we need your stories around misdirected payments to help. So if you’ve experienced misdirected payments, tell me your stories below.


Regarding the case of Tony Moss and FOS and the Small Claims Court. I am very surprised at the apparent verdict as it is quite well-known that if a Bank misapplies a credit to your account then they can recover it from you.

There are some small caveats where they cannot but in the vast majority of cases the misapplying Bank would recover the money. That the money went to an apparent dormant loan account would suggest the miscreant had no access to the money and therefore the only beneficiary was RBS. AFAIR from my Banking law training this smells wrong. It would be highly enlightening to see the full details of the case.

FOS has been under considerable strain with fluctuating numbers of staff over the last few years and I am aware that there have been complaints about several ajudications.

As Solicitors do not have to be used in the Small Claims Court, it may be possible for mistakes to go unnoticed to a greater extent than a higher Court.

Given your comments about Banking Law and complaints about several ajudications, it would be interesting if WHICH Solicitors would give their considered opinion(s) on the matter of misapplied banking payments such as in the example of Tony Moss above.

When money is paid into an HSBC branch (if memory serves me correctly), it requires a) Name of the Account Holder, 2) Sort code & 3) Account No.
A mistake in the account number would usually mean name and account don’t match unless both parties have the same name such as John Smith.

Is it possible that in the example of Tony Moss above, RBS refunded the money fearing the public intervention of a legal or banking expert who might have suggested going to appeal thus incurring massive costs for RBS if they lost.

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.

This does highlight your responsibilities in operating your bank accounts. If you make a mistake, whilst your bank should do all it can to help you it cannot be held responsible for your error. A previous conversation illustrated someone’s mistake in transferring regular monthly payments into their savings account; never checked it until over a year later and found the’d got the account number wrong, and the recipient had spent all the money. As far as I know they were left with the loss.

I have now checked and I did remember the account number and sort code correctly. Most of the payments I make these days are online or I hand over cheques to someone with a paying-in book.

With our society having a unique name, hopefully HSBC could cope with an error in either the account number or sort code if I had made a mistake. If the account number and sort code don’t match with the name of the payee, then the bank should not process the cheque.

wavechange, if I remember rightly from the last conversation on this topic the bank does not take account of the name of the payee, just sort code and account number. Is this correct?

If that is the case, I wonder if banks are fit to be trusted with our money.

Why is it we need to find someone else to criticise when we make a mistake? The banks do help recover money paid in error, but if that proves impossible we cannot blame them.

If the banks ask for the name of the payee and then do not use it, they deserve criticism.

Maybe if they did use the information provided then fewer errors would be made.

The Conversation that revealed that the account number and sort code but not the account name was used in transactions is entitled: “How one woman made a £26,000 mistake” That referred to multiple direct debit periods over a long period, so is rather different from a mistake on a single cheque.

This conversation intro is “What happens if you enter the wrong payment details when trying to transfer money online?”. As dieseltaylor says if the bank is given an incorrect instruction the money may not be recoverable. The £26000 error highlights you need to be careful. I’m not sure about the cheque problem – I’ve only made cheques out to a named payee and given them the cheques. They can check the details are correct.

If I pay in a cheque and make a minor error in either the sort code, or the account number, or the name of the payee, then surely it is the responsibility of the bank to check that they match. It has never happened, but I am sure that common sense would prevail if it did. If banks are the name of the payee or failing to check the signature on cheques then they are not doing a very good job, are they?

Customers can make mistakes and banks can make mistakes. Hopefully common sense can be applied where needed.

That should read: ‘If banks ignore the name of the payee or fail to check the signature on cheques then they are not doing a very good job, are they?’

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.

What amazes me is why is it even possible that a simple incorrect digit entry could be a valid account number?

Have our banks never considered using check digits? https://en.wikipedia.org/wiki/Check_digit

There are check digits and certainly in Lloyds within the range of numbers for accounts by Branch some would be impossibilities. I believe this was also true of NatWest and Midland Banks.

Where have we got to with international bank account numbers? I believe these contain check digits.

Lessismore says:
25 September 2014

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.


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. ”

If making a transfer from my bank (setting up payee) I always test that the money is going into the account it should by sending a transfer of £1, then if it goes to the wrong account you haven’t lost much. I do this for both sending funds to my other accounts or if paying a third party. Once I see the money is in the right account or received confirmation from the third party that they have the £1 then I will use the payee set up to send further monies confident that my money is not going astray.

I do the same. If it is to pay someone else, I get them to e-mail or text me when the money appears in their account. No-one has ever complained, and it gives me peace of mind.

Ian Savell says:
28 September 2014

I too use the £1 technique when setting up a payment for a large sum – though you do need to be able to talk to the payee to check the £1 was received!

Where people complain that the bank doesn’t check the account number matches the account name, the fact is they can’t. The name you enter in setting up the payment is just a title to identify the transfer. Only the sort code, account number and reference are involved in the transaction.

It would be nice if as suggested check digits were used to detect incorrect account numbers but with an 8 digit number a single check digit would leave only 10 million possible accounts – not many for a big 4 bank – so I suspect hey are not used and a single check digit still leacves a 1 in 10 chance of a wrong number.

Probably time (as earlier with IP addresses and car numbers) to revamp the account no. format, but such a change would probably cost billions across the economy (sending out notifications, redesigning forms, websites and databases etc.).

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.

DJK Robinson says:
30 September 2014

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.

ladygeeke says:
22 November 2014

I have had two problems with quite large money transfers within the last few months, both with Lloyds.

First I was expecting a payment of over £25,000 from a building society from my late mother’s estate to be paid into the executor account. It never arrived. When I chased with the building society it confirmed the payment had been sent several weeks earlier. It transpired that Lloyds had returned the payment claiming the executor account details were invalid, though they had credited other payments into the same account, both before and after.
The building society managed to track the money into a holding account and re-transferred it, but to my personal account (at my request as I did not trust Lloyds to handle it). It arrived without problem.

At the beginning of October I transferred £5000 from my Lloyds current account to a savings account at another bank using the online payment service.
Six weeks later I noticed that the amount had not been credited and chased it up.
In this case it was my error, as I had picked from a drop-down list on the Lloyds website the sort code and account number of a previous savings account with the same bank that I had since closed, instead of my open account.
However, neither bank have been able to trace the money, although both said that if an account has been closed, any payment to it should have been re-credited straight into the originating account and they can’t explain why this has not happened.
Lloyds have promised to track the payment but told me it could take up to six weeks to do this,
The other bank did promise to call me back the same day once they had spoken to their back office, but I have had no further communication from them despite chasing them twice.

The thing that irritates me is that our money disappears into these banks’ holding accounts and presumably is earning interest for the bank while it is there, but we as customers get no compensation for loss of interest caused by the banks’ mistakes, and banks do not make any effort to contact their customers when money goes into a holding account to find out what has gone wrong,

Sue R says:
5 January 2015

Hi – I was reading your post about paying into a closed account, Just over a month ago I did the same thing and paid £900 from my Lloyds current account using the drop down list of previous payments. It was going to a Santander account which unfortunately I had closed a few months prior and I forgot to update with the new open account details, They said the money should have bounced back within a few days. I contacted both banks within days but have been told Lloyds have to try to trace the payment. For me it’s seems simple as it must be in a holding account at Santander so why can’t they just return it as it doesn’t involve a third party’s account.
Did you get your money returned ? If no joy I will go to the ombudsman .


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 ! ! ! ******

Ben Auld says:
29 December 2014

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.

Judy M says:
2 January 2015

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?