Reclaiming misdirected payments
Sending a payment to the wrong bank account by accident can be devastating, especially if it’s a large one.
Thankfully, banks are becoming more and more aware of the propensity for human error when it comes to making payments online. As part of the voluntary code of best practice, the banks will now help you to recover any misdirected payments to the best of their abilities.
We’ll go through the things you could do to try and reclaim any payments made mistakenly, and help you to avoid making mistakes like this in the first place.
In This Guide:
- What if I've switched accounts and a payment gets sent to my old one?
- How do mistakes like this happen?
- What should I do to reclaim misdirected payments?
- The voluntary code of best practice
- Minimising risk
What if I've switched accounts and a payment gets sent to my old one?
When you switch current accounts, you’ll benefit from a 13 month protection period during which your old bank is legally obliged to send on to your new account any payments that are mistakenly sent through to your old one.
How do mistakes like this happen?
It’s surprisingly easy to make a mistake and enter a digit wrong when you’re making a transfer or payment online or over the phone.
To make things worse, given the speed with which transfers are made these days, once you’ve mistakenly sent money anywhere, the chances are that it’s already reached its destination by the time you’ve realised your error.
The best thing you can hope for if you do this is that the numbers you did enter do not actually correspond to any existing account and if this is the case, the payment will bounce and will return to your account in a few days.
If, however, the details you enter do correspond to a real account, then the money will be sent over and reclaiming it can be rather difficult.
What should I do to reclaim misdirected payments?
Reclaiming misdirected payments can be tricky if the money in question has simply been mistakenly sent to another individual.
It relies on two different banks co-operating fully with each other and to make matters more complicated, data protection law can sometimes make it somewhat difficult to actually identify and get hold of the recipient of the money in question.
Once the recipient has been contacted, while they are not legally entitled to actually keep the money that they’ve mistakenly received, it can nonetheless be tricky to compel them to return it right away. This is especially the case if, say, they’ve spent the money already and taking it out of their account would then cause them to go overdrawn.
If you’ve accidentally sent a payment to the wrong account, then you should contact your bank right away and they’ll do all they can to help you out.
You should note down all of the relevant details like the account number that you sent the money to and the date and time that the payment was made.
The voluntary code of best practice
In May 2014, the Payments Council established a voluntary code of best practise for banks to follow in order to try and make it easier for customers to reclaim misdirected payments.
Most banks have signed up to abide by this voluntary code, and those that do are obliged, in the event of being notified of a mistaken payment, to:
- Start taking action to attempt to reclaim the payment within two working days
- Inform you if the money can’t be reclaimed straight away within 20 days of this outcome being reached, and
- Offer you solid help and advice regarding what to do if the payment can’t be recovered at all through conventional means.
If, by the end of the whole process, your money could not be reclaimed, then you could take legal action.
If you amount lost is under £10,000, then you can take your claim to a Small Claims Court and if it’s more, you should seek further legal advice.
For the most part, mistakes like this will be down to human error and so the best way to avoid them in the future is simply to take extra care when you’re entering the details for any payments you plan to make.
Double check, even triple check, all of the details you enter to make absolutely sure they’re correct.
One thing you could do if you’re planning to send a large amount over is to send a few pence beforehand and check that it reaches the intended recipient before you send over the full amount.