Mistakenly Sent Money to the Wrong Account? Here's What You Need to Do

After the introduction of the Government's flagship programme 'Digital India', we have been overwhelmed with multiple choices for transferring and receiving funds. While these avenues offer secure and rapid money transfers worldwide, we need to acknowledge that human errors cannot be foreseen, and mistakes can occur.

Most payment gateways, unlike UPI, require manual entry of recipient details such as account number, IFSC code, and account holder's name. In certain scenarios, there is a possibility of entering incorrect credentials when transferring funds between bank accounts. If such a mistake occurs, you may find yourself wondering, "What should I do now? How can I recover the transferred amount back?" If you are trying to get answers to such questions, you have arrived at just the right place. This article elucidates what to do if you mistakenly transfer the funds to the wrong bank account.

What Could Result in a Transfer of Funds to the Wrong Bank Account Number?

1. One common mistake that most people do that can result in wrong transactions is manually inputting an incorrect account number. This can happen when filling out forms or entering the details during an online transfer. It could be due to a momentary lapse in concentration, misreading the account number, or simply making a mistake while writing or typing. Regardless of the reason, even a single-digit error can lead to the funds being transferred to the wrong recipient.

2. Another mistake that can cause incorrect transactions is making typographical errors in the Account Number, IFSC code, or both. Transposing numbers, omitting digits, or mistakenly adding extra characters can lead to the transfer being directed to an unintended account.

3. While rare, technical errors from the bank's side can also contribute to wrong transactions. Banks rely on complex systems and software to process transfers, and occasionally, glitches or malfunctions can occur. These technical errors can result in the funds being routed incorrectly, leading to unintended transfers. However, take note that such occurrences are infrequent, as banks have robust measures in place to minimise the chances of technical failures.

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How to Take Quick Action If You Transfer the Funds to the Wrong Account?

When you realise that you have sent money to the wrong account, the immediate concern is how to recover the funds. Initiating the process of reversing the transaction requires following a set of essential steps:

1. Get in touch with the bank: The first thing you should do if you mistakenly transferred the money to the wrong account is contact the bank through your relationship manager, customer service representative, or customer care as soon as possible and inform them about the wrong transaction made so that they can guide you through the process.

2. Verify the account number existence: If the account number you mistakenly transferred the funds to does not exist, the money will be automatically credited back to your account. However, if the account number does exist, prompt action is necessary.

3. Communicate via email and provide all the details: Write a detailed email to the bank explaining the situation to ensure clear and documented communication. You need to provide the bank with all relevant details and documentation to support your claim that the transfer was made by mistake. This includes providing them with the accurate bank details of the intended recipient and any evidence, such as transaction id, the incorrect beneficiary's account information, and any supporting evidence.

4. Seek assistance from the bank: Remember that the bank acts as a facilitator in such cases. They may provide you with information about the unintended beneficiary's branch, such as the branch name and contact number. You can use this information to contact the person who received the funds.

5. Bank intervention for intra-bank transfers: If the transfer is within the same bank, the bank may approach the unintended beneficiary on your behalf and request a reversal of the transaction. If the beneficiary agrees, the funds will be reversed back to your account within 7 working days.

6. Personal visit for inter-bank transfers: If the unintended beneficiary is from another bank branch, you may need to personally visit that branch and meet with the bank manager to find a solution. Provide them with the necessary documentation and request their assistance in reversing the transaction.

7. Monitor the situation: Since your hard-earned money is at stake, keep track of the progress in resolving the matter. Follow up with the bank regularly to understand the status and any updates regarding the reversal of the transaction.

Taking prompt action, maintaining clear communication with the bank, and providing supporting evidence will increase the chances of resolving the issue efficiently and recovering the funds transferred by mistake.

RBI Guidelines in Case of Wrong Fund Transfer:

According to the RBI guidelines issued in October 2010 regarding incorrect NEFT transfers, banks are required to verify the matching of the beneficiary's name and account number before proceeding with fund transfers. They should only transfer funds to another account when these details align correctly. Therefore, if the account number and name do not match and the money is mistakenly transferred to the wrong account, the bank can be held accountable for not conducting the necessary verification. In such cases, the bank must rectify the security lapse and take appropriate actions to resolve the issue.

Can You Reverse the Wrong Transaction?

Take note that if you provide an incorrect or non-existent account number, the funds will be promptly returned to your account. On the other hand, if the account details are valid and the money is successfully transferred, the reversal of the funds will rely entirely on the recipient's cooperation. If the recipient grants permission for the transaction to be reversed, you should be able to retrieve your money without any difficulties.

What If the Wrong Beneficiary Refuses to Refund the Amount?

If the unintended beneficiary refuses to return the amount, recovering the money becomes challenging without their consent. The process requires the wrong beneficiary to acknowledge that a wrong transaction was made to their account. In such a situation, you should contact your bank and provide details of the matter. The bank may request additional details such as ID proof, address details, etc.

Communicating the issue via email helps in keeping a record of your complaint and facilitates tracking the progress of the case. However, if the person refuses to return the funds, legal action may be necessary. This becomes more complicated if your bank and the beneficiary's bank are different entities.

If all goes well and the person agrees to return the amount, the reversal process may take around 8-10 working days. Take note that if the beneficiary does not approve, the situation becomes complex, and recovering the funds may not be possible.

How to Prevent Mistakenly Transferring Money to the Wrong Bank Account?

Here's what you can do to minimise the risk of losing money in a wrong transaction:

1. Ensure accurate information: As the remitter, it is your responsibility to enter the correct recipient details on the bank's website. Double-check the accuracy of the IFSC code and bank account number before initiating the transaction. Verifying the information two or three times can help prevent errors.

2. Test with small amounts: Before conducting a larger transaction, consider transferring a small amount as a test. This can be verified by contacting the recipient directly to confirm if they have received the money. Testing with a smaller sum allows for easier rectification if any discrepancies arise, compared to attempting to recover a significant amount later.

3. Maintain contact with your bank: Keep the contact details of your local bank branch readily accessible. In the event of a mistake, notify the bank and beneficiary promptly. Informing the beneficiary early increases the chances of resolving the issue and initiating the transfer of funds back to your account.

By following these guidelines, you can reduce the chances of losing money in wrong transactions and increase the chances of rectifying any errors on time.

KETKI JADHAV is a Content Writer at PersonalFN since August 2021. She is an MBA (Finance) and has over seven years of experience in Retail Banking. Ketki specialises in covering articles around banking, insurance, personal finance, and mutual funds and has been doing it for over three years now.

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Disclaimer: This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision.