Transferred money to the wrong account? Here’s what to do

We transfer money on a daily basis, whether to pay our bills, settle up with friends from last night’s dinner or help out family overseas. But what happens if you transfer money to the wrong account? Robbie Sampson, co-founder and CEO of OrbitRemit, gives this advice.

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 don’t want to lose 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 I transferred money to the wrong account?

1. As a first step, the service you used to send this money will need to be told immediately about the situation. 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. In some cases, the service’s systems will pick up an error and notify you before you’ve had a chance to contact them or before you’ve become aware of the mistake. 
2. Once the issue has been raised, 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 that could complicate the process — you might not notice the mistake right away or perhaps you aren’t notified of a problem until some time later. Luckily many providers are still willing to work with you to figure out the problem even in these circumstances. Still, it’s a case of 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, it is a good idea to let your financial institution know.

How does the provider fix the mistake?

There are a lot of ‘back-end’ system checks involved in any kind of money transfer, which are there to help in these kinds of situations. The technology used to power online payments involves end-to-end encryption to secure information, as well as validation instructions to ensure all details provided are correct, including the BSB and account number. These systems allow providers to determine where an error was made or stop a payment that looks incorrect or suspicious.

Typically, the bank, credit union or remittance service you use 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. However, this may not always be the case.

There are regulations set by the Australian Securities and Investments Commission (ASIC) on recovering mistaken payments, 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. Many money transfer providers are part of the ePayments Code, which further protects Australians when making electronic payments.

Providers do, however, have a right to determine you’re not eligible to get your money back if, for example, 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. 

What could also happen is selecting the wrong payee from your contact list (especially if you have multiple people with the same name saved), which can lead to a wrong transfer. 

When using PayID, which uses a unique number linked to a transaction account such as a mobile phone number, you really do need to be careful, as one-digit difference can mean your money is going to an entirely different person. That’s why every detail needs to be checked closely before hitting the pay button. 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 transfers using NPP happen instantly instead of taking days, making fixing errors a little trickier.

What can I do to prevent transferring money to the wrong account?

According to a report from ASIC, the vast majority of mistaken transactions happen because incorrect bank account details are 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, account number or PayID. And be sure to check you have entered the details correctly before pressing the ‘pay’ button. 

Remember, there are systems and regulations in place that are designed 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 careful when entering numbers and notify your provider as quickly as possible if any issues occur so they can have the best possible chance of being fixed.

Cover image source: TippaPatt/Shutterstock.com

About Robbie Sampson

Robbie Sampson is the Co-Founder and Chief Executive Officer of global money transfer service OrbitRemit. OrbitRemit was named in the Financial Times top 300 High-Growth companies in APAC 2021 and 2020.