Payments Council helping customers recover accidental payments

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People who accidentally send a payment to the wrong account can expect consistent, standardised and swifter help from May 2014, following the publication of a Code of Best Practice by the Payments Council.  For the first time, under the new voluntary Code, banks and building societies have put in place standard central processes and defined maximum timescales to help customers recover money. 

What customers can expect:

  • When a customer notifies their bank or building society that they have made an electronic payment to the wrong account, action will commence on the customer’s behalf within a maximum of two working days.
  • If a bank is unable to reclaim funds immediately – for instance if the recipient disputes its return – the customer will be notified of the outcome of their bank’s investigation in a maximum of twenty working days from the point of enquiry and in many cases much sooner.
  • If funds cannot be recovered through the standard central process customers will be given clear and accurate information on the options they have available to them – such as court action against the recipient.
  • Banks and building societies will ensure the design of online, mobile and telephone payment channels reduce the risk of a customer making a mistake. This might involve: customers being asked to input account details twice; extra warnings about using the correct account details; or prompting customers to check payment details that have not been used for some time so that they can be updated or deleted as necessary.
  • If a customer does not get the service they should expect under the new Code, they should firstly follow their provider’s formal complaints procedure, and failing a satisfactory outcome, take their complaint to the independent Financial Ombudsman.

The new Code cannot guarantee a customer will always recover any money paid in error but it will make sure that the customer knows the outcome quickly and consistently, and enable them to seek legal advice or take further action if required. The new Code will be monitored, and the number of customers using it tracked, to assess whether further refinements are needed.

A number of banks such as Barclays, HSBC and Nationwide have signed up with more expected to announce their participation in the coming months.

Research conducted by the Payments Council found that less than two out of three (63%) of Brits know their electronic payments are addressed using the sort code and account number. Almost half (49%) incorrectly thought the name of the recipient is checked, while 15% wrongly believed the recipient’s post code is checked.

In addition to the Code, the Payments Council has updated its consumer education website PayYourWay.org.uk with tips to help customers avoid making mistakes when sending a payment.

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