Help, I transferred money to the wrong bank account

Internet banking is a smooth and easy way to move money from your account to someone else's. But if you slip up and transfer it to wrong account, it can be a rigmarole and sometimes impossible to get it back.

I know because I accidentally put in the wrong account number and paid an unknown person. My problem was that I didn't realise I had put the money in the wrong account until my payee told me that I hadn't paid a few weeks later.

Speed is everything if you make a mistake and send your money to the wrong account.

My quest for money was complicated, not to mention nerve-wracking, wondering if I was ever going to get my money back.

Luckily there is an ePayments code that is administered by the regulator, the Australian Securities and Investments Commission (ASIC), designed to help people like me because mistaken internet payments are common.

What do you do?

You need to contact your bank or credit union immediately. It will get in touch with the unintended recipient's bank to try and get the money back.

While it will try, success depends on a few things. Firstly is the money still there in the other account? Also it checks if it is a genuine mistake. This can be worked out because the account name and the number do not match. ASIC's code has some guidelines around what has to happen to your money, depending on how quickly you report the mistake. The code helps when you report the mistake.

The code says that within 10 days, the money will be returned to you.

But if you leave it longer, it gets complicated. ASIC says that between 10 days and seven months, the recipient's bank will freeze the funds. The recipient will then have 10 days to show that they are entitled to the money and if they can't, the money will be returned to you.

Under the code, if the money isn't in the other person's account when the receiving bank is notified, it must make a reasonable attempt to get the money back. This means it should negotiate with the unintended recipient to repay the funds.

But a recent case of Kelly, not her real name, who transferred a five-figure sum to the wrong account in a different bank, didn't get much help from her bank when the recipient refused to return it to the bank. Here is what Kelly's bank told her to do:

"With your permission, we could make further efforts to recover the balance of the money transferred using the trace and recovery process. We cannot guarantee this would be more successful as it depends on the recipient consenting to the repayment. Also, there are fees associated with this process which you will need to consider when determining whether to pursue this option.

Alternatively, you could seek independent legal advice to find out whether you can recover it another way."

If your bank or credit union doesn't help you to fix the mistaken internet payment, you can lodge a dispute with the Financial Ombudsman Service Australia (AFCA).

But be prompt. If you leave putting in a claim for funds after seven months, AFCA says the funds will only be returned if the other person agrees.

Always check the numbers

Eventually I got my money back but it dragged on and I had to check on the progress a number of times. Not surprisingly I always double and triple check the BSB and Account numbers so I don't make a mistake and pay the wrong person. Also I carefully check that I am sending money to the right person on my preferred list when I make a payment.

Unexplained money turns up in your account

The flipside of putting money in the wrong account is finding money has been incorrectly deposited in yours.

As nice as it may be to have a windfall, it is best not to spend or withdraw the money but contact your bank to let them know. Legally it isn't yours and you have to pay it back. Your bank will return the money to the sender.

BPAY mistakes

BPAY has a low occurrence of mistaken payments due to its Customer Reference Number and Biller Code payment controls.

If you are paying a bill using BPAY, it uses the BPAY Mistaken Payment Process to manage payments made in error. It is best to contact your bank or credit union for help.

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