What to do when funds transfer fails

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Oyetunji Abioye

What would happen if I made an online transfer but the money didn’t arrive in the other account? This is usually the situation that confronts many customers in this era of digital/electronic banking

In this age of online banking, transferring money between accounts is as simple and every day as paying in a shop. What makes it all the more troubling is that, sometimes, bank transfers can go wrong.

According to www.choose.net, when transfers go wrong, these are possibly the reasons:

  1. Wrong account number/sort code

Human error is an inevitable part of life, and is especially prevalent when we’re required to type in meaningless strings of numbers, such as sort codes and account numbers.

If we mistakenly enter a wrong digit, then the money can go to the wrong party.

If this is the case, we need to contact our own bank as soon as possible. They can’t stop a payment that’s already been made, but most will act on our behalf in trying to track it down and recover it.

  1. Bank error

Even if the sort code and account number have been entered correctly, a bank error can result in the transfer not being made. In that case, the first step is to ask the sending bank to provide evidence that they have made the transfer. If the bank can show that they did indeed make the payment, then they should also carry out an investigation and try to recover the missing money.

  1. Technical failure

Sometimes, it could be the technological platform, infrastructure or telecommunications/Internet service provider that may be the problem. It can be traced to the issue of down time.

Recovering incorrect transfers

However it happens, when an incorrect transfer has been made, reporting the error is the first order of business.

While the money still legally belongs to the person making the payment, there are plenty of stories attesting to the fact that recovering it often isn’t easy or guaranteed.

As soon as we let our bank know we’ve made a mistake with a payment, whether it’s just after we hit “send” or sometime later, the regulations state that they have two working days to act.

This usually means getting in touch with the receiving bank to see what’s happened. The Central Bank of Nigeria is currently working on a draft rule that will compel your bank to ensure that (if there is clear evidence of a genuine mistake) the receiver does not spend the money by mistake.

The receiving bank will then contact the person whose account stands to gain from the error, to give them the chance to dispute that the payment was made by mistake.

Frightening as this may sound, we’re relying on a stranger to be honest, most claims are undisputed, and the money should be returned in days.

Problems with recovery typically arise when the owner of the receiving account disputes the claim. In some cases this is deliberate, while in others, it’s because they’re unaware of a problem, say, if the account is unused for some reason.

Before the introduction of the draft rule that the CBN is working on, customers have faced serious problems when they send money into other accounts wrongly.

By this new rule, the banks must do everything to ensure that the money is recovered as soon as possible.

How to prevent transfer disasters

As so often in life, prevention is better than cure. It is better to prevent funds transfer problems than carelessly allow the mistake to happen and then face the hassles of recovery.

According to www.choose.net, here are some tips to avoid transfer problems or error:

  1. Check the recipient details

It’s vital to double check the sort code and account number before sending a payment; payments are processed only using these numbers.

Banks advise anyone making a transfer to double and triple check the recipient’s sort code and account number before hitting “send,” and they provide a sort code checker to help with the first part.

It can’t tell if a sort code is for the “right” account (i.e. it can’t give any details about the name of the account holder, or of the account itself), but it can confirm whether the account is suitable for the type of transfer.

Most banks in Nigeria don’t reckon with sort code as such.

We should also check the amount and make sure to include a payment reference if one is required; this is often found when making payment to utility companies.

For payments from one person to another, say to a friend; it can be worthwhile making a much smaller test payment of N500 or less before transferring the full amount.

As well as making sure the details are correct, it’ll give both parties a feel for how long it’ll take; and if something goes wrong, it’s much less traumatic.

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