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Ever made an incorrect payment online? | Mistaken payments

mistaken payments

A couple of months ago, 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 we are asked to check the information before the payment is made, we all need to ensure always check thoroughly, and once we have set up our payees, that we select the right payee, because all it takes is a click .

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 relief the payment 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.

Three tips for Schools with unpaid school fees

Every parent chooses the best education they can for their children, and if they choose to send their children to a private school or college, they will make a choice so the school fees are within their budget at the time they make their decision.

It happens to all of us at some stage in our lives, situations change and so too can our ability to meet all our financial commitments. School fee payments are no different. When this happens, the most important consideration is that a student’s education is impacted as little as possible, and every school will be mindful of this, although they also have their own financial position to consider.

Our top three tips for schools when it comes to school fees:

Speak to parents as soon as possible

We always encourage open dialogue from the start, the benefits are:

–       A revised payment arrangement for the school fees could be put in place, which will ensure continuation of payment, albeit at a different level

–       Ensuring that the unpaid school fees do not escalate to a point where the parents no longer have the capacity to repay the debt or the school needs to engage with a third party to recover the debt

Engage with a debt collection agency who specifically understands schools

Partnering with a trusted debt collection agency who has access to in house lawyers is often a cost effective way to seek some assistance if you ever need it.

Establishing a relationship before you need assistance is prudent to ensure you source the right partner for your school or college. Make sure you take the time to engage with a partner who will work with you to preserve your brand and reputation and who is prepared to take the time to understand your values. You want to make sure anyone who is contacting your parents is not damaging these relationships in your community.

Review Your Enrolment Contract

An enrolment form is a legally binding contract between the school (who commits to providing educational services to the enrolled student), and the parents (who commit to paying school fees).

It’s important that you review your contract to ensure there is detail around the payment of school fees, including the impact of failing to pay.

Consideration should also be given to:

–       Providing clarification over who is liable for the school fees and ensuring that they sign the contract, eg where parents are overseas, or are separated.

–       Ensuring you are aware at enrolment of any Family Court orders or other court orders that may impact on the student. This may affect who should sign the enrolment form, who is entitled to receive information about the student (including reports) and who can collect the student from school.

–       If parents separate after enrolment, how do you ensure you are notified of any orders? What processes do you have in place to deal with the situation where a domestic violence (intervention) order has been obtained by one parent against the other? To avoid liability, it is critical that schools require parents to keep them notified of any such situation.

–       Being clear as to what services you are providing in your contract and limiting your liability for breach of contract.

Kearley Lewis specialises in providing school fee recovery services to schools and have access to in-house Law firm Lewis Holdway Lawyers.

If anyone involved in schools, either as principals, teachers, administrators, councillors or parents, would like more information from Lewis Holdway Lawyers, please contact our Director of Dispute Resolution, Chris Morey on (03) 9629 9629.

 

Protecting Small Businesses from Unfair Contract Terms

Protecting Small Businesses from Unfair Contract Terms

Are you a small business or is the party you trade with a small business; that is, an entity that employs fewer than 20 persons? If so, then you need to pay attention to the legal changes that will come into play on 12 November 2016.

The changes relate to the small businesses who trade on standard form contract terms; that is, contracts that are pre-prepared before any discussions relating to the transaction and where the terms are not usually negotiable. A clear example of a standard form contract is a credit application used by many of our clients for the provision of services or goods on credit terms.

Where your standard form contract (e.g. credit application) involves an upfront price payable of $300,000 or less, or has a duration of more than 12 months for an upfront prince payable of $1MIL or less, than you should review the terms of your contract before 12 November 2016 to ensure they are not unfair.

This is because by 12 November 2016, there will be changes to the ASIC Act and the Australian Consumer Law and those changes will state that if your contract is deemed unfair, then it will be treated as though the term never existed which means that you will not be able to rely on it in Court. This will obviously give a belligerent debtor customer scope to dispute their liability for monies owed to you. This could be critical for your cash flow as a small business.

So what does it mean for a term in a contract to be unfair? A term is unfair if:

  • it would cause a significant imbalance in the parties’ rights and obligations arising under the contact; and
  • it is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and
  • it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

Some examples of terms that would be unfair are:

  • A term that permits, or has the effect of permitting, one party to assign the contract to the detriment of another party without that other party’s consent.
  • A term that limits, or has the effect of limiting, one party’s right to sue another party.
  • A term will be deemed unfair if it is a term that permits or has the effect of permitting one party to vary the upfront price payable in a contract without giving the other party an opportunity to terminate the contract.

If you think your contract terms may be caught by the changes outlined above, it is critical you have them reviewed before 12 November 2016, including the covering sheet to your contracts, such as the front cover of your credit applications.

A good set of terms and conditions that is enforceable forms the crucial backbone for successful trading relationships in any business.

If you would like to talk to a lawyer about whether the changes apply to you and have your contract terms reviewed, please contact Su-Ann Loh (Senior Associate, Dispute Resolution Practice Group) or Peter North (Senior Associate, Business Practice Group) on 03 9629 9629 or by email at suannl@lewisholdway.com.au and petern@lewisholdway.com.au.