What happens when you put money into the wrong bank account?

Source: Fair Go

We've all been there, putting the wrong digits in your phone and calling the wrong number or sending an email to the wrong person. Sometimes one little mistake can mean big problems.

As paranoid as we are about transferring money to the wrong bank account number, it happens.

That's exactly what happened to Ōtautahi couple Ghulam and Ziagul Rafyee.

Their extended family needed some financial support, so the Rafyees chipped in.

Ghulam transferred $6000 from their ANZ account to another ANZ account.

"I accidentally typed one number wrong, and the money's gone to a different person's account," he told Fair Go.

His wife, Ziagul, said the amount is around "three months of our mortgage, so it is a lot of money".

But they were confident they could get their money back as the funds had been transferred to another ANZ account.

And the couple did what Banking Ombudsman Nicola Sladden says you should do – they alerted their bank as soon as they realised they’d made a mistake.

"Banks are required to make reasonable efforts to recover those funds from the wrongful recipient," Sladden explained.

But unfortunately, the buck stops with that wrongful recipient. Banks in New Zealand generally have a policy that the owner of the wrong account has to agree to return the money to you, and only then can the bank refund it.

"Where the rubber hits the road is when the unintended recipient refuses to return the funds and that creates quite a lot of complexity, unfortunately," she said.

In the Rafyees' case, ANZ did try to contact the other account holder, but they weren't responding.

Averill Boylan, from Tauranga, had a similar issue with her bank, BNZ, when she paid for her lawn mowing service.

She thought she could easily get the issue rectified with her bank, but found it wasn't the case.

When paying her bill, she accidentally clicked on the wrong payee in her online account. The $57 that was meant for an ANZ account ended up at ASB bank, into her old lawn mowing service's account.

Boylan said she "immediately removed the contractor from my index" and contacted her bank.

Sladden said it shouldn't matter which bank the recipient of the funds uses, adding that the same commitments and efforts should be made to recover those funds.

Like anything, there are the fees that come with trying to recover your money. These are usually called credit recovery fees, or payment retrieval fees.

ANZ charges $25 each time they try to get in touch with the wrong recipient, while ASB charges $40. TSB bank, meanwhile, charges $35, while the Co-operative Bank will charge you $15.

Boylan's bank, BNZ, charges $75 per transaction, which she called "hardly worth paying ... when I'd only get back $57".

So she left it at that and didn't go through the recovery process with BNZ.

ANZ was able to sort out their issue and get the Rafyees' money back after being contacted by Fair Go. It apologises for any stress the issue has caused the family.

"Our management and communication around this case fell short," the bank said. "We weren’t able to easily contact the other customer which contributed to the delay."

While the Rayfees' ordeal had a positive outcome, people have been advised to check account numbers carefully.

BNZ, meanwhile, said in situations where customers have paid an existing bill payee, the bank "cannot simply request that the funds be returned as the bill payee has been identified as a legitimate recipient of the customer’s funds".

After being contacted by Fair Go, Boylan is now working with BNZ to get her funds back. The bank has also waived the $75 electronic credit recovery fee.

BNZ says the fee is to cover the time, effort and materials used to get the money back, especially if it's from another bank.

The Rafyees say they now know better for next time and will take a different approach when transferring money.

"From now, if someone asks me for money, I will transfer $1 first," Ghulam said.

"I'll confirm from them, 'did you receive the money?' If they said yes and then I'll transfer what amount they want."

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