Will I get my money back if I make a mistake when making bank transfers online?

Typing in the wrong digits when making a bank transfer online is a simple error and easily done.

But if this happens, just how easy is it to get your money back?

What if you just type one digit wrong?

Anyone can make this mistake – known as a misdirected payment – typically as a result of getting just one digit wrong.

In some case, people can accidentally end up sending thousands of pounds to the wrong recipient or account.

This is a big issue at a time when money can be transferred online in a matter of seconds, and the problem is going to be exacerbated by the advent of new mobile banking services which allow people to make transfers on hand-held devices while on the move.

What can the banks do?

While you might assume mistakes of this nature can be rectified easily, there is a good chance you will not see your money again without going through a huge amounts of hassle.

Banks and building societies cannot actually withdraw these funds from the person they were sent to unless that recipient gives their permission to hand the cash back.

The situation is slightly better if you accidentally send money to an account that turns out to be dormant or closed, as banks will usually return the money. That said, old bank numbers often get “recycled” and given to a new account-holder, so you may not be so lucky after all if the account turns out to be active once again.

Read our guide to staying safe online.

Plans to bring in new rules

The good news is, some banks are planning to improve this situation for customers.

Certain banks, for example, now “ring-fence” disputed funds while they try to contact the account-holder to validate the payment.

Others will contact any customer who has received a misdirected payment warning them not spend the money while they investigate. They will then claw back the money if the sender queries the payment and the recipient cannot prove the money was meant for them.

How to avoid a misdirected payment

The best way to avoid this happening is to ensure you carefully check – and recheck – the confirmation page showing the details you have entered.

You should then only proceed to the “payment confirmation” page once you are absolutely sure all the numbers are correct. This includes the account code, the sort code, and the amount you want to send.

As a precaution, consider sending just £1 in the first instance to ensure it arrives safely.

If you do accidentally send a payment to the wrong recipient, you need to inform your bank straight away.

Find out about scams which steal your identity.

Code of Practice

In May last year, new “best practice” voluntary guidelines were issued by the Payments Council to make it easier to sort the aftermath of misdirected payments.

The body’s Code of Practice states that banks and building societies must now take action with two working days of a customer’s complaint. They will then have a further 20 days to conclude an investigation if they cannot reclaim the money right away.

This is certainly a step in the right direction, but sadly doesn’t mean you are guaranteed to get your money back.

If payments can’t be recovered, you may have little choice but to take the matter to the small claims court to force the recipient to reimburse you.

You can do this on the grounds that it is illegal for someone to wilfully hold on to – and spend – money in their account that they know was not meant for them. But unfortunately this will involve time, money and hassle.

Find out how to use the small claims court.