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'I lost £28,000 mortgage deposit': How to get back money sent to the wrong bank account

Don't rely on the banks as they may not recover your money. One man's £28,000 sort code slip-up serves a valuable lesson

Check the numbers three times before you press 'send' Photo: Alamy









By Kate Palmer

6:25PM BST 14 Oct 2014

96 Comments


Bank customers who send money to the wrong account via online banking have more chance of being reimbursed following a change in approach by some of Britain's biggest lenders.

Under a voluntary code introduced in April, adopted by most of the main groups, banks have to take action within two working days. But the code does not guarantee that money paid in error will be returned.

It has now emerged that some lenders will go further. Nationwide and First Direct said they could freeze accounts found to contain money sent from another person by mistake.

But HSBC, for example, said it would freeze a customer's funds only in rare circumstances, and only if the transfer was suspected of being fraudulent.

What should I do if I misdirect a payment?

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Tell your bank immediately. Banks signed up to the voluntary code should contact the other bank within two working days.
It is, however, the recipient bank's responsibility to contact its customer so the funds can be recovered.
If, after two days, there is a dispute over who rightfully owns the money, the recipient bank will investigate for five weeks.
But if the money hasn't been returned, the account holder who sent the funds has little option but to go to the ombudsman or pursue costly court action.
The issue was highlighted on Radio 4's Moneybox programme, which featured a customer who accidentally sent £28,000 to the wrong NatWest account.
Dave Frey made a "faster payment" to his solicitor a mortgage deposit but realised 48 hours later that it had gone to the wrong person.
Six weeks later, NatWest offered to give him his money back, but only if he agreed to pay any legal fees if the recipient of the funds decided to go to court. Mr Frey refused, and the bank returned the money anyway.
How can I avoid sending my money to the wrong person?
Check the numbers three times before you click, the ombudsman said. Although it might be obvious, the ombudsman said it couldn't emphasise this strongly enough. "Once you've hit the send button you might not get your cash back if you've made a mistake," a spokesman said.
With large sums, transfer £1 to begin with, then check it has gone to the correct person before transferring the full amount.
Why does it take so long for people to get their money back?
Customers who mistype a digit when paying someone via online banking are currently at the mercy of the banks.
Over the years The Telegraph has regularly flagged this issue with the Payments Council and pushed it to change things.
This newspaper's financial agony aunt, Jessica Gorst-Williams, recently won back £12,000 after a customer mistakenly sent £12,000 to a Nationwide account and was left waiting for more than seven weeks.
Consumer champion James Daley, of Fairerfinance.co.uk, called on banks to treat customers who have made misdirected payments with greater sympathy. "It's just not right that a simple slip on the keyboard could leave you unable to get your hands on your money for weeks," he said.
The Payments Council said that misdirected payments can take time to resolve, as they are treated on a case-by-case basis.
A spokesman said: "We need to ensure that all parties are treated fairly when funds have been mistakenly sent to the wrong place both the person who has sent the money and the person who has received it."
The Council admitted that misdirected payments remain a problem, and will be reviewing the code next year.
Why are misdirected payments rising?
Experts are warning that botched online payments are set to increase further as more people turn to online and mobile banking, yet there is still no official policy for botched payments.
Banking specialist David Black, from Consumer Intelligence, said so-called "fat-finger" mistakes would "inevitably increase" and called on banks to do more to take back erroneously-sent money. "While it may potentially cause annoyance to some of the recipients of such unexpected credits, the fact remains that the funds weren't intended to go them in the first place," he said.
Fairerfinance's Mr Daley called on banks to introduce software to prevent misdirected payments from happening. He said: "Until, we see better systems, customers need to tread with caution.
"It's vital that banks invest some of these savings in creating a fair system. They could easily check the account name against numbers that have been entered in."

Magda Hassan Wrote:Customers? How quaint David. Banks only job is to protect shareholders.

David Guyatt Wrote:

Magda Hassan Wrote:Customers? How quaint David. Banks only job is to protect shareholders.

True, but that's only their second duty. Their first duty is to stuff their own back pockets full of lucre ni matter what the cost.... ::