Ever made an incorrect payment online? | Mistaken payments
A couple of months ago, I was in panic when I thought I’d paid the balance for our family holiday to the wrong bank account i.e. not to the travel agent.
It is easy to set up new payees online, and although you are asked to check the information before the payment is made, as I learnt, you don’t necessarily always check thoroughly enough.
The lesson I learnt from my mistake was that Banks don’t check the name of the account you enter when you transfer money online, they only check the BSB and account number. In my instance, I was lucky because it was only the account name I input incorrectly, so to my amazement the money went through fine.
In the last few of weeks, we have had a number of enquiries from people who have paid an incorrect recipient online, and are looking to retrieve the funds. We have also had cases where employers have accidently paid a previous employee or incorrect employee and are seeking our advice.
So, what do you need to do when this happens?
Mistaken Payments: what is handy to know?
Firstly, the earlier that you notify your financial institution the greater the likelihood that the financial institution of the unintended recipient will be able to return the mistaken payment to you. Fast action in responding to the mistake and notice to the mistaken customer is key.
It’s good to be aware of the ePayments Code. This code regulates consumer electronic payment transactions, including ATM, EFTPOS, credit card transactions, online payments, internet and mobile banking, and BPAY. This is a voluntary code and virtually all banks, credit unions and building societies currently subscribe. The link to this code is: http://asic.gov.au/regulatory-resources/financial-services/epayments-code/.
Hopefully knowing the above will mean you can recover funds without having to seek legal advice.
Mistaken Payments: could you end up not retrieving your funds?
We have had one customer whose funds could not be retrieved because the bank account to which the mistaken payment was made did not contain sufficient funds. The wrong customer had swiftly used the money, despite notice of the mistake!
After exploring all options with the client, our final recommendation was to commence legal proceedings against the known customer who benefited from the mistaken payment. Provided the identity of the customer is known, this is something a Lawyer can help you with.
These cases highlight the importance of verifying bank account details before processing a payment. If a mistaken payment is made, act fast.
If you want to discuss any mistaken payments made or to discuss how to safeguard against this, please contact Su-Ann Loh at Lewis Holdway Lawyers on 03 9629 9629.