When will banks act with to stop account transfer mistakes?

The number of people who are losing money due to errors or fraud when sending funds online from their bank accounts is continuing to rise. Whilst the banks have done nothing to offer any kind of safety net, Quick Loans’ investigates what can be done.

What is the problem?

If you have ever sent money from your online bank account to a friend or a new person for the first time, you might have checked and double checked the account numbers over and over before pressing send. Nervous that when you send it, there is no coming back, the money is gone, even if you contact the bank within seconds to try and correct your error.

The current situation is that if you send money to someone and make an error by getting just one number wrong in their account number or sort code, that money will still be accepted by the other persons bank – even if the account name that you said you were transferring it to doesn’t correlate with the account that is receiving it.

Unfortunately, this has led to some massive mistakes being made. There are numerous horror stories online by people that have sent the deposits for their new house, over to the wrong account. This usually means that a lucky member of the public has just got an early Christmas present.

The only way that the sender can get their money back is to try and go to court and file a money claim. The trouble with that is that the receiving persons bank, won’t hand over details of who the recipient is. This means that the sender doesn’t know who to file a claim against. It’s a good old mess.

Some people have tried to make a claim against the banks, until now though the banks have successfully defended their positions. Their view is that they did exactly what the customer told them to do, they sent the money to an account that the customer told them to.

What we are calling for is another line of defence, so that the account name must match that of the account number – or the receiving bank should send the money back. After all, Mr Smith can’t receive money from a cheque made out to Mr Roberts.

Why is it any different for online payments?

If banks would match account numbers to account names, then the risk of fraud would also be reduced massively. There have been a number of high profile occasions when emails have been sent from one organisation to another asking for payments for invoices. Whilst the invoices are legitimate, someone in that organisation who sent the invoice - usually by someone working there - altered the invoice so that the account numbers were their own. This means they received the monies instead of the intended organisation.

This is incredibly difficult to spot – if not impossible – to spot by the sender.

What is being done?

Well the banks are looking to introduce some kind of safety system where the account numbers match the names. Unfortunately they are still dragging their feet and something that was originally pencilled in for 2014 is now not going to be introduced until at least 2018. 

Have you been a victim of making a mistake online? If so, we would like to hear from you and share your story to help others!