What is a Mistaken Internet Payment?
A Mistaken Internet Payment happens when you transfer money to an unintended recipient using the 'Pay Anyone' function in NetBanking. It may occur because you were provided with an incorrect BSB or account number by the intended recipient; or because account information was entered into NetBanking incorrectly.
Will your Financial Institution pick up on the Mistake?
When you make an internet payment it can be easy to enter the wrong BSB or account number. Even if you double check the details, the likelihood of making a mistake at some point is high. Whilst some financial institutions may pick up on this mistake by verifying the entered BSB and account number matches the account name you have provided, most won't. So, when an incorrect BSB or account number is entered and the details point to an active account, your money will usually be transferred regardless of the intended recipient. Where the BSB and account number entered does not point to an active account, the payment may be processed but will usually be returned without you having to take any further action.
Getting your Money Back
If a 'pay anyone' transaction does go through to an unintended recipient, there is a process to help retrieve your money. This process and the responsibility of your financial institution to help, is outlined in the ePayments Code. However, adhering to the ePayments Code is not compulsory and not all financial institutions subscribe to the code. For a list of subscribers, check out ASIC's Subscriber Register.
As outlined in the ePayments Code, when a mistaken payment is reported to your financial institution, they are required to investigate. If they are satisfied that a mistaken payment has been made, they will send a request - to the financial institution that received your transfer – to return the money to your account. If that financial institution also concludes that a mistaken payment has been made and there are sufficient funds in the unintended recipient's account, then the money must be returned to you.
Keep in mind however, these obligations do not apply if the incident wasn't reported within seven months or if the recipient doesn't have enough money in their account to repay you at the time of request. In these instances:
- Where a recipient does not have enough money in their account, their financial institution must reasonably try to retrieve the money through other means (such as returning the money in instalments). However, this does not guarantee you will get your money back.
- Where a Mistaken Internet Payment has been reported after seven months there is no requirement for the recipient to return your money
- Where either financial institution is not satisfied that the payment was a mistake then there is no requirement for them to request repayment of your money from the unintended recipient.
Are there any Fees Involved?
If you ask your financial institution to initiate the process outlined in the ePayments Code, they will likely charge a fee. These are often called Trace and Recall Fees and vary between financial institutions. The fee is usually charged, regardless of whether your money is successfully returned.
What if a Mistaken Payment was Made Using BPAY?
There are no rules outlined in the ePayments Code to deal with mistaken BPAY payments. If you do make a mistaken BPAY payment then it's likely that your financial institution will handle the process in the same way as they handle Mistaken Internet Payments. The difference is that neither the recipient of your payment or their financial institution are obligated to return your money.
What if you're not Satisfied with the Outcome?
If you are not satisfied with how your financial institution has handled the resolution of a Mistaken Internet Payment, you can get in contact with the Financial Ombudsman Service, who will provide additional guidance.
It's surprising to think that making simple mistakes with internet payments could have potentially serious financial consequences. Just remember, if you do happen to make a mistake, contacting your financial institution as quickly as possible will ensure you have the best chance of retrieving your money!
The information outlined in this article summarises content within the ePayments Code, current on 17th April 2018. For full details refer to the current ePayments Code available from ASIC.