Make sure your Christmas money gift gets to the right person

Make sure your Christmas money gift gets to the right person

Be sure account numbers are correct if you gift money by transferring it directly into someone’s account this festive season otherwise the wrong person might think all their Christmases have come at once, says Banking Ombudsman Deborah Battell.

“For extended family, transferring money, particularly via the internet or mobile banking, is a convenient way to give Christmas presents to family members. But it’s easy to make mistakes when transferring money, even if you do it by deposit slip.

“If there is a mistake, that Christmas present could cost you even more because banks generally charge to trace mistaken payments. We’ve surveyed banks and found you may be charged up to $100 for a trace on a mistaken payment.

“You need to take real care when giving, writing or entering account numbers. It’s crucial you have this correct as transactions are processed by account numbers.

“We receive complaints from people who say their bank should have noticed the number did not match the account name given. But while banks often ask for an account name as well as the number, their payment systems only check the number not whether the number and account match.”

Banks generally do their best to retrieve money mistakenly paid but customers may have to take court action if the recipient refuses to return it. A bank can’t simply deduct money from other people’s accounts and nor is it obliged to refund the payment.

“We do, however, expect the bank to take reasonable steps to retrieve the funds for you. You need to contact your bank as soon as possible if you make an error as it can liaise with the bank which received the funds and attempt to retrieve your money. The quicker you do this, the greater the likelihood of getting the money back. It may, however, pass on any administrative costs and it can take up to five days, and sometimes longer, to retrieve the money.

“There are much better ways of starting the New Year than paying for help to retrieve money you were trying to give as a Christmas present,” Ms Battell said.

Check out our Mistaken payments quick guide for an explanation of what happens when money is paid into an account in error and the types of cases we have dealt with.

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