You may be very careful when transferring money, making sure to double and triple check account details to ensure everything is right before hitting send. That’s because we’ve all heard the stories or know someone who has lost hundreds of dollars by simply switching a digit around. But accidents happen, so if it does, here’s what to do.
What do I do if money is transferred to the wrong account?
Don’t panic, all hope is not lost. As a first step, the service you used to send this money will need to be told immediately about the situation, or in some cases they’ll notify you. This is critical. The earlier you’re able to notify your service provider of a problem, the more chance you have of your money being recovered.
Once the issue is spotted, they’ll then work with you to determine what went wrong and what step in the transfer process your money is currently in.
In some cases there will be extenuating circumstances — you might not notice this happened right away or perhaps you aren’t notified of a problem until a few days later. Luckily many groups are still willing to work with you to figure out the problem even in these circumstances. Still, the sooner the better when it comes to flagging this issue, so make sure you’re checking your account regularly.
On the flip side, if you see money appear in your account that isn’t supposed to be there, do the right thing and let your financial institution know.
How does the provider fix the mistake?
There are a lot of back-end checks in place when doing any kind of money transfer, which are there to help in these kinds of situations. The technology used to power payments online involves end-to-end encryption to secure information, as well as validation instructions to ensure all details provided are correct. These systems allow for providers to go through and determine where an error was made or stop a payment that looks incorrect or suspicious.
Typically, the bank, credit union or remittance service you used to send the money will be notified of an incorrect payment either by its own system or by you and should immediately begin looking into the issue.
The service will then look to trace the transaction from the sender and work with the receiver – usually a bank – to try to get that money back. More often than not the funds will bounce back, especially if you simply put in the wrong account number.
PayPal accidentally makes man a QUADRILLIONAIRE after accidental money transfer: http://t.co/BM0UFHUOBE
— QualitySolicitors (@Qual_Solicitors) July 22, 2013
Many money transfer providers are part of the ePayments Code, which protects Australians when making electronic payments and offers guidance on recovering mistaken payments. There are also regulations set by the Australian Securities and Investments Commission on this, which stipulates that as long as you notify your provider of the error within 10 days, and the funds are still in the bank account of the person who accidentally received it, you are able to get your money back. However, if it is after seven months, the receiver has to give their approval to return the funds, making it slightly trickier.
Providers do however have a right to determine you’re not eligible to get your money back if you’ve given away your PIN number or acted fraudulently.
The situation differs slightly with international transfers, but the service you’ve sent money with may have relationships with other banks in these countries to help make this process easier.
Should I be worried this could happen to me?
Depending on the transfer method, it’s actually harder than you think to send money to the wrong person. Transferring money from one bank account to another involves inputting the other person’s bank details. The chances of you doing this wrong and actually getting the combination of another account right are pretty small. But accidents happen. One simple switch of a digit in an account number or even selecting the wrong payee from your contact list (especially if you have multiple people with the same name saved) can lead to a wrong transfer. That’s why every detail needs to be checked closely before hitting the pay button.
When using identification like mobile numbers you really do need to be careful, as one-digit difference can mean an entirely different person. It may be better to use a more secure form of identification, like an account number, to reduce the likelihood of errors happening.
With the introduction of the New Payments Platform (NPP) in Australia, transactions can be made in real time, so there are even more standards and safeguards being put in place to ensure consumer safety. The downside is that with the ever increasing use of NPP across Australia it’s even more important that you’re being careful when adding account information as transfers happen instantly instead of taking days, making fixing errors a little trickier.
Because mistakes do happen, picking a money transfer service you trust right from the beginning, for both domestic and international transfers, is critical. That way if something does happen you know you’re in safe hands.
What can I do to prevent this?
According to a report from the Australian Securities and Investments Commission, 83% of mistaken transactions happened because incorrect bank account details were entered. The best advice is to make sure you have all the details for the person or place you’re looking to send your money. Double and triple check the information is correct, whether it’s a BSB, PayID or mobile number.
Remember there are systems through the money transfer service in place to protect you. The technology is there to make sure these kinds of incidents are few and far between, and it’s also there to help when a problem does occur.
Transferring money should be an easy process, and it can be. Just remember to be as careful as possible when entering numbers and work with service providers you trust, so if an issue does pop up, it can have the best possible chance of being fixed quickly and easily.
About Robbie Sampson
Robbie Sampson is the Co-Founder and Chief Executive Officer of global money transfer service OrbitRemit. Founded in 2008, OrbitRemit operates in 39 countries around the world and employs 40 staff across offices in New Zealand, the United Kingdom and Australia. Sampson brings a lifetime of entrepreneurship to OrbitRemit, having been self-employed his whole life. OrbitRemit now processes more than half a billion in global monthly transfers each year.