It's an all-too familiar scenario – we transfer money to a friend's account, only to get a wave of panic that we've input the wrong details after we've already pressed the "send" button. Happily, these fits of mild terror could soon be things of the past, as even if you do send money to the wrong person, it should now be easier to recover it…
A change to industry procedures means that customers who make a mistake when sending a mobile, phone or online banking payment will have improved help to recover the funds, protecting the money sent and increasing the chances that it'll be returned to the rightful owner.
The new procedures will strengthen current guidelines: as it stands, customers can expect a bank or building society to investigate a mis-sent payment within a standardised timescale, but from now on, when there is clear evidence of a genuine mistake, the receiving bank will prevent the money being spent by the wrong recipient.
Once the sender has notified their banks that they've made a payment to the wrong account, action will be commenced within a maximum of two working days. The receiving bank will be requested to prevent the money being mistakenly spent, and in straightforward cases where the recipient doesn't dispute the return of the funds, the money will be returned to sender within 20 working days, the first time such a timescale has been proposed.
However, there will still be measures in place to "balance the rights of all customers", which means that in all cases, the receiving customer will be contacted by their bank and given the opportunity to dispute the return. Additional safeguards will be implemented to ensure that, in cases that are less clear cut, no funds will be removed without the consent of the recipient.
If it isn't possible to reclaim funds, you'll be notified within 20 working days of your initial enquiry (and in many cases much sooner), and will be given information of the available options should you wish to take things further.
The move is being implemented by Faster Payments and Bacs to incorporate the entire payments industry, and although the improvements won't guarantee that a customer will get their money back, they offer a clear level of protection thanks to the sheer number of payments that come under the remit.
The procedures apply to payments sent using Faster Payments (which processes virtually every mobile, online and telephone banking payment between banks or building societies) or Bacs Direct Credit, and apply to all banks and building societies that connect directly to these payment schemes, covering more than 95% of electronic payments made in the UK.
Implementation is being rolled out across other indirectly connected banks and building societies during early 2016, but as of yesterday, the vast majority of banking customers will be able to benefit from this extra level of protection.
The move has been widely welcomed by the industry, Government and customers alike, ensuring that customers are treated fairly – and crucially, that they get the response they need should errors occur.
"Any improvements on supporting consumers will be fantastic news for those who fear entering incorrect account details when making payments," said Rachel Springall, finance expert at Moneyfacts, "which can be an easy mistake to make on the go!"
Many of us have been in that situation, which is perhaps unsurprising considering that mobile, online and phone banking customers send over a billion payments every year, according to Craig Tillotson of Faster Payments. Michael Chambers of Bacs said it was "inevitable that human error can sometimes creep in when lengthy account details are being input, and it is absolutely right that anyone who is out of pocket as a result of a mistake can get that money back".
Prevention will of course always be better than cure – it's vital to double-check the sort code and account number when sending any payment, thereby stopping a potential error in its tracks – but if mistakes do happen, it's comforting to know that there'll now be an additional level of protection, for senders and recipients alike.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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