Mistakes happen from time to time, no matter how much care we take. Two transposed numbers on a deposit slip or a moment of inattention while doing internet banking and unwittingly your money has gone to the wrong person. The question is: what can you do to get your money back?
It goes without saying that you need to take care when entering and giving out account numbers. They are a crucial piece of information because transactions are processed by account number. Banks will often ask for an account name as well as account number, but their systems don’t check that they match.
Sending a payment to the wrong account
Contact your bank as soon as possible after realising your mistake. The sooner you do this, the better your chance of recovering your money. If your money went to an invalid account, it will usually bounce back into your account.
Retrieving a mistaken payment to a valid account can be more difficult. As a general rule, banks can reverse a payment made in error only with the consent of the person who received it. Your bank and the recipient’s bank will need to co-operate to try to recover the payment. This usually involves the recipient’s bank contacting the account holder to ask his or her permission to reverse the transaction.
If the recipient refuses, your only option is to take up the matter directly yourself. However, the bank’s responsibility to protect the privacy of the recipient’s contact details may prove an initial stumbling block. You may wish to take court action if the recipient won’t return the money. We recommend you seek legal advice if faced with taking such a step.
Receiving an unentitled payment
The same applies: you should contact your bank as soon as possible to advise it of the error. And once you have been asked for your consent to reverse the payment to its rightful owner, you should agree. Some people feel they should be allowed to keep money paid into their account, but in general they should return money that does not belong to them.
Someone receives money meant for you
If someone owes you money but deposits the money by mistake into someone else’s account, it is not your responsibility to chase it up. The person who made the mistake is responsible for trying to recover the money, and whether successful or not is still obliged to pay you.
It is a different matter if you have given the payer the wrong account details. In that case, the payer has simply followed your instructions, so you must bear the loss if the funds can’t be retrieved. You should ask the payer to seek the recipient’s consent to retrieve the money. If the recipient won’t return the money, you may have to take legal action.
FAQs
A Mistaken Payment is a direct entry payment made by a financial institution on the instruction of a consumer using an internet banking facility, which results in a payment being made to the wrong account, either because the consumer entered wrong BSB or account details or because the consumer had been given incorrect ...
Do I have to return a mistaken payment? ›
What should I do if I receive a payment in error? The money isn't legally yours - so you'll need to pay it back. Otherwise, you could end up being charged with 'dishonestly retaining a wrongful credit' under the Theft Act 1968 and civil action can be taken against you in county court.
What is a mistaken transaction? ›
A mistaken transaction is when when you pay the wrong person or company by using the wrong bank details. When you check your accounts, look for payments or withdrawals you don't recognise, such as: a payment to a person or company you don't know.
What is the mistaken payment doctrine? ›
(d) A debtor mistakenly pays its creditors an amount in excess of that which is owed. The general principle that courts and scholars have articulated is that (subject to various exceptions and limitations) recipients are required to return mistaken payments to the payer.
How can I get my money back from a wrong transaction? ›
The process is a little tough, but he/she has to accept that there was a wrong transaction made to his/her account. Then, you need to contact your bank and communicate the matter in detail. You may also have to provide ID proof, address, and other details asked by the bank. Communicate the matter in detail via mail.
How do I reclaim a misdirected payment? ›
Speak to your bank
Make sure you have all your details handy (including details of the transaction). Your bank should act within 2 working days. They should contact the bank that's received the money and ask for the money to be returned.
Is it illegal to keep money that was sent by mistake? ›
You may wonder if it's a case of “finders, keepers.” The only time that you can keep funds added to your bank account is when the money deposited was legitimately meant for you. When a bank error occurs in your favor, you cannot keep the money — even if the error seems small and likely to fly under the radar.
Can I keep money received in error? ›
Even if the money is from your employer or from the taxman, you still need to let your bank know as you could get into trouble for just leaving the money in your account if you know it should not be there. Instead, you are expected to take reasonable steps to cancel the transfer or return it to the sender.
Can a wrong payment be reversed? ›
If either a consumer or a vendor notices something is wrong with the payment, they can contact the bank to stop the transaction going through. This is typically the payment reversal type which involves the least hassle for both customers and businesses.
How do I get my money back from a false transaction? ›
Call the customer service number on the back of your card.
Explain that you're a victim of fraud and share details about the unauthorized charges. Follow the credit card provider's dispute process. Submit statement transactions, receipts, and proof that you were in another location when the bogus charges were made.
If you don't recognize a transaction, you do have the right, under the Fair Credit Billing Act, to ask for an explanation. That may help jog your memory, and you could realize that there is nothing to dispute. In case it is indeed an unauthorized transaction, you can then exercise your FCBA rights and file a dispute.
What if I accidentally paid money to the wrong account? ›
You must immediately contact your bank's customer service if the details seem incorrect. Your bank can help by providing the contact details of the unintended beneficiary. Follow up by requesting a transaction reversal and asking the unintended recipient to return the funds to you.
Are you legally obligated to return money paid in error? ›
It's important to know what your obligations are when you pay another party because in some situations you may be out the money. While the general rule is that you can get back money mistakenly paid to someone, this rule does not apply if the overpayment falls under the “voluntary payment doctrine.”
What is the erroneous payment clause? ›
These erroneous payment clauses for a credit agreement are used in a syndicated loan transaction to require lenders to return errant payments made by an administrative agent.
What is reasonable mistake doctrine? ›
The California jury instruction for a mistake of fact defense can be found at CALCRIM 3406, which states that: “The defendant is not guilty if they did not have the intent or mental state required to commit the crime because they reasonably did not know a fact or reasonably and mistakenly believed a fact.”
What does payment error mean? ›
Payment Error means: (a) any underpayment or overpayment by a Party of any amount in respect of a Tax Invoice; or (b) any error in a Tax Invoice (including the omission of amounts from that Tax Invoice, the inclusion of incorrect amounts in that Tax Invoice, calculation errors in the preparation of a Tax invoice or a ...
What is wrongly accepting payment? ›
Under section 36, a business is prohibited from wrongly accepting payment for goods or services that it does not intend to supply or is unable to supply.
What is an example of an improper payment? ›
For example, a disbursing officer who makes a duplicate payment or a payment to the wrong payee has made both an “erroneous” and an improper payment.
What are incorrect payments? ›
Incorrect Payments means a payment incorrectly paid or transferred to the Payment Account, identified as such by the Servicer and confirmed by the Transaction Manager which will not form part of Available Interest Distribution Amount or the Available Principal Distribution Amount; Sample 1.
