I paid the wrong Bank Account, what can I do

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Forums › Finance and wealth management › I paid the wrong Bank Account, what can I do - advice wanted?

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1759 posts

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#1725909 24-Feb-2017 20:49

This error must happen a lot.

In Australia there is legislation that allows the bank to correct the error quickly and effortlessly, yet in NZ we have no such legislation.

rugrat

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#1725923 24-Feb-2017 21:05

andrewNZ: If the bank made the mistake, you can bet your left one, that the problem would be sorted as good as instantly... once they'd acknowledged it was their mistake of course.

My brother was recently telling me how hard it was to even find out his own account number in Canada. He said that for transfers, you logged in and got a number for the transfer, then gave it to the person paying you (or something like that). It seemed ridiculous when he told me, but now simple and unforgiving the NZ system is, I'm thinking it's not so bad.

Yep, when a bank puts money into wrong account they can take it back straight away. Just look at the one where they gave a petrol station owner a 1 million plus overdraft by mistake. They managed to drag a lot of that money back without him willing to pay it back. No $75 cost to get round privacy act there, and asking customer nicely to pay it back, and that was unintentional payment same as ops case.

Hammerer

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#1725937 24-Feb-2017 21:14

Nothing wrong with that. It was the same bank making the mistake and owning the account that's why there was no inter-bank process and cost. The contract with the account holder will have specific provision for such a mistake.

Edit: And the $75 is nothing to do with the Privacy Act. It recovers the cost of the staff at the other bank which didn't create the problem.

PaulBags

809 posts

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#1725991 24-Feb-2017 23:32

Somewhat off topic (sorry), but recently my mum started using internet banking (with BNZ) and I held her hand through her first online transaction. The box asking to verify details and confirm payment covered the details so they can't be checked or verified. I thought we'd already double checked the details, so we promptly sent the wrong reference number - which also wasn't shown after the transaction. I made sure we checked it thoroughly from the transaction list or we wouldn't have noticed. Luckily in our case a quick phone call to the payee & all was sorted, but I couldn't believe that interface.

I'm also shocked to learn names aren't checked against account numbers, I could swear I've failed an online transaction with incorrect name years ago. Did it change when they switched to faster transfer times?

rugrat

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#1725993 25-Feb-2017 00:10

Hammerer:

Nothing wrong with that. It was the same bank making the mistake and owning the account that's why there was no inter-bank process and cost. The contract with the account holder will have specific provision for such a mistake.

Edit: And the $75 is nothing to do with the Privacy Act. It recovers the cost of the staff at the other bank which didn't create the problem.

The person had moved the money out of that bank, and into different banks. The money that the bank could trace it forced back from different banks. The money that got wired transferred and moved through some overseas casino accounts was harder to trace.

The other bank may not have created the problem, but the way the bill pay works on the NZ banking system seems to make no effort to protect customers money from a simple mistake. There's no name checking on account or even a second field to match the account number in any way, like the CCV field on credit cards.

Banks could do more to lessen the chance of errors, all it takes is a verification field, but I guess since it's not the banks losing the money, but a chance to charge their customers even more then they're not interested.

While it works the current way, when entering new payees people need to know to be paranoid about the account number entered and check it many times before hitting the pay button. Other then that I don't think there is much the op can do to get money back, other then make a noise and see if there's interest in reviewing bank procedures.

dejadeadnz

2394 posts

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#1725994 25-Feb-2017 00:13

sbiddle:

harlansmart:

It's wrong, simple, this situation, feels wrong, I am sceptical, imagine if it was $275k, and the person refused to allow a 'rightful refund' to me, wtf?

In that case if the person refused the refund you would be $275k out of pocket with pretty much no legal right to any recourse.

This whole situation has been made even worse by the move to "real time" banking with settlement before interchange. As banks settle continually throughout the day now you're even limited when it comes to cancelling a transaction even if you realise it's wrong pretty much straight away.

Wrong. Anyone who mistakenly receives such a sum of money accidentally is liable to be successfully sued for its return under the restitution doctrine of money had and received. In practice, the payer would have to get lawyers involved and get a court order for third party discovery against the bank to obtain the details of the payee in order to serve proceedings. So clearly this isn't an option available for mistaken payments of a few hundred, let alone tens of thousands. I have seen such cases in Australia, however. And being an ex-risk guy, I would know. The proper solution would be for a law to be passed to allow such mistaken payments to be simply and efficiently recovered via a tribunal similar to one like the Disputes Tribunal.

mattwnz

20164 posts

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#1725996 25-Feb-2017 00:23

This is why I always copy and paste the account number into online banking. However some banks now prevent this which is a real pain. Many business have pre approved accounts, where you just enter teh name of the business, and it will autofill in the bank details. I think the banks need to come together to come up with a good solution, as the current system is poor. Especially as more and more people a now not using credit cards due to companies adding on surcharges.

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mattwnz

20164 posts

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#1725997 25-Feb-2017 00:29

Pumpedd:

This error must happen a lot.

In Australia there is legislation that allows the bank to correct the error quickly and effortlessly, yet in NZ we have no such legislation.

In Australia they also have a deposit guarantee scheme, to protect savers losing their money in a bank failure. Yet in NZ there is none. Considering the billions they make off NZers every year, I feel we are really let down by our banks in NZ. I had a problem where a international cheque I deposited via an envelope deposit at my bank disappeared, and it was a real hassle trying to figure out where it had gone. In the end I found out the bank contracts out the processing of envelope deposits to a third party, and they hadn't processed it for some reason due to it being a US cheque. So it delayed by cheque clearing by a week, as you have to wait a month for a US cheque to clear. So won't be able to access the money when I want to, so I am not a fan of our banks at all.

sbiddle

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#1726006 25-Feb-2017 07:42

dejadeadnz:

sbiddle:

harlansmart:

It's wrong, simple, this situation, feels wrong, I am sceptical, imagine if it was $275k, and the person refused to allow a 'rightful refund' to me, wtf?

In that case if the person refused the refund you would be $275k out of pocket with pretty much no legal right to any recourse.

This whole situation has been made even worse by the move to "real time" banking with settlement before interchange. As banks settle continually throughout the day now you're even limited when it comes to cancelling a transaction even if you realise it's wrong pretty much straight away.

Wrong. Anyone who mistakenly receives such a sum of money accidentally is liable to be successfully sued for its return under the restitution doctrine of money had and received. In practice, the payer would have to get lawyers involved and get a court order for third party discovery against the bank to obtain the details of the payee in order to serve proceedings. So clearly this isn't an option available for mistaken payments of a few hundred, let alone tens of thousands. I have seen such cases in Australia, however. And being an ex-risk guy, I would know. The proper solution would be for a law to be passed to allow such mistaken payments to be simply and efficiently recovered via a tribunal similar to one like the Disputes Tribunal.

Such a process would still be extremely complex, and certainly with no guarantee of success.

If the money was deposited into an account and was subject to something such as the proceeds of crime act and/or criminal proceeds recovery then there are grounds for recovery of this money.

If you make a simple mistake and transfer the money then there is quite simply no obligation for you to hand that money bank. If you were the receiving party then your bank is going to strongly suggest you do, and no doubt a lawyer would offer the same advice, but there is no legal legislation that says you have to.

sbiddle

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#1726009 25-Feb-2017 07:50

mattwnz:

In Australia they also have a deposit guarantee scheme, to protect savers losing their money in a bank failure. Yet in NZ there is none. Considering the billions they make off NZers every year, I feel we are really let down by our banks in NZ.

Australia's scheme offers coverage up to $250,000. This amount is more generous than many other countries that offer such a scheme. The system isn't without flaws and many will argue that such a deposit insurance scheme actually doesn't work in the best interests of all bank customers. This is the reason why the Reserve Bank rejected making such a scheme mandatory for NZ banks. The Reserve bank does have an open bank resolution policy which would be enacted should a bank failure occur. Under this policy funds are government guaranteed, but the only downside of this is that many of the smaller banks in NZ are not part of this.

In any bank failure a haircut is inevitable, which is one good reason to store money across multiple banks.

allan

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#1726014 25-Feb-2017 08:03

I operate an elderly parent's account and he had a mysterious amount of approx $80 deposited into his account. I advised his bank that I believed the amount had been deposited to an incorrect account. After some weeks, they came back and said they had checked with the payer's bank and it was a genuine payment. However, I'm personally still convinced that it was a payment to an incorrect account!

tchart

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#1726028 25-Feb-2017 09:20

Brain fart.

Why not send the account small amounts of money like 10c and put a message in the reference?

Like "paid wrong account, please call me at XYZ"

davisg

74 posts

Master Geek

#1726041 25-Feb-2017 09:43

What I do if making a payment by Internet Banking is always to schedule the payment date a day or two in the future. That way if I have stuffed up I get a chance to cancel and do it again.
If it is important or large I also print the transaction so I can check it offline.

kiwifidget

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#1726042 25-Feb-2017 09:52

davisg: What I do if making a payment by Internet Banking is always to schedule the payment date a day or two in the future. That way if I have stuffed up I get a chance to cancel and do it again.
If it is important or large I also print the transaction so I can check it offline.

I suspect for most people the first indication they get that they entered the account incorrectly is a call from the recipient wanting to know where the money is.

Delete cookies?! Are you insane?!

dafman

3928 posts

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#1726045 25-Feb-2017 10:23

If you used his account number, your branch number, there won't be a real account that matches this and the payment will have gone into the receiving bank's suspense account. This is a 'catch all' account for holding funds that couldn't be applied to an account. Because two banks are involved it will take staff time to sort out, so you have probably done you $75 - which is probably a fair charge for the time involved.

Lesson? Check and double check all account numbers before you hit confirm.

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