New help recovering money sent to the wrong account

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Updated on 16 July 2014 | 3 Comments

From next month, people who mistakenly pay money into the wrong account can expect better help in having it returned.

From May 2014 people who accidentally send an electronic payment into the wrong bank account should find the process of attempting to reclaim money easier.

The Payments Council has issued a Code of Best Practice, which it says has resulted in banks and building societies agreeing to put in place a set of standard central processes and to define just how long it should take for the money to be recovered. 

The new Code cannot guarantee that you will always recover money paid in error, but it does make sure that you will be informed of the outcome quickly and consistently. It also enables you to seek legal advice and take further action if required. Further refinements may be made depending on the initial success of the Code, which will be monitored by the Payments Council.

What does the new process mean for you?

From May, you can expect:

  • Action within two working days after an erroneous electronic payment is reported to your bank.
  • If the bank is unable to immediately reclaim funds, for example in the case of a dispute of the claim by the payee, you will be notified of the outcome in a maximum of 20 days from the point of enquiry.
  • If funds cannot be recovered through the standard central process, you will be given "clean and accurate" information on your options, such as court action against the recipient.
  • Banks and building societies will overhaul their online, mobile and telephone payment channels to reduce the risk of customer error. This might include extra visible warnings about entering details carefully, requests for you to input payee account details twice, or prompts to make sure you regularly check payment details that haven’t been used in a while, so that these can be updated or deleted.

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Has my bank signed up to the new Code?

The Code is voluntary, but the following banks have signed up and are updating their procedures accordingly:

  • Adam & Company
  • Barclays
  • Clydesdale Bank
  • Coventry Building Society
  • Coutts
  • HSBC Bank
  • Lloyds Banking Group
  • Nationwide Building Society
  • NatWest
  • Santander UK
  • Tesco Bank
  • The Co-operative Bank
  • The Royal Bank of Scotland
  • Yorkshire Bank

Other banks and building societies are expected to follow suit in the coming months.

Adrian Kamellard, Chief Executive of the Payments Council, said:

“Sending a payment with the wrong sort code or account number is like sending a letter with the wrong post code and address – it won’t reach its intended destination and can be very difficult to get back. The overwhelming majority of the millions of payments we send each day reach their intended destination without any problem, but if you are unlucky enough to make a mistake this new process should help.”

Research conducted by the Payments Council revealed that 49% of people in UK incorrectly thought that the name of the recipient was checked when making an electronic payment, and 15% believed that the recipient’s post code was checked.

The Payment Council’s website PayYourWay.org.uk has been updated with tips to help customers avoid making mistakes when sending payments. Here’s a few good bits of advice:

  • Double check the sort code and account number when making a payment. This is the only information used to address your payment.
  • Check the amount you’re paying and the payment reference – particularly when paying a business or a bill.
  • If you think you have made a mistake, contact your bank immediately. There is no way to reverse the payment once it has been sent.
  • If you think you’ve received money in error from someone else’s mistake, contact your bank immediately.

Do you think the new changes are helpful for customers? Is there anything about the Code of Best Practice that should be improved? Let us know your views in the comments below.

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