The trouble with EFTs: If you transfer money to the wrong account, you may not get it back

The problem with processes that are quick and easy is that it's also easy to make a mistake - as many do, every day, when doing electronic funds transfers (EFTs).

Businesses mean to pay their suppliers but "gift" a stranger instead; consumers think they've made a payment to a friend but one wrong number saw their funds disappear into someone else's account; and some have finger trouble when choosing a beneficiary on their list and end up paying the wrong company.

If the beneficiary is the sort who, having spotted the mistake, immediately informs the bank and is willing to do the right thing and return their windfall, that money is usually back into the payer's bank account within five days.

But, sadly, too many people's moral compasses malfunction at the sight of the lovely new balance on their bank statement. They know the money wasn't intended for them but they can't bring themselves to give it back, so they transfer it into another account - or spend it as fast as they can.

Even if they just leave the money in their own account, the payer is in for a tough battle because the bank doesn't have the right to whip the money out of the wrong recipient's account without their permission. So the only option is legal action, which can take anything from six months to two years, and the costs can run into thousands of rands.

So naturally it's only the finger trouble cases which involve hundreds of thousands of rands that land up in court.

Most end up writing off the money, chalk it up to experience and go on to check payment details obsessively when doing EFTs.

When the recipient of a mistaken EFT is known to the payer, it's harder to understand how they could justify refusing to refund the money.

I once took up the case of a woman who had paid about R12,000 to a company that was on her list of EFT beneficiaries, as it had previously done a service for her in her home. She'd meant to pay the company one above it on her list of beneficiaries.

For weeks the company made excuses about why the money wasn't being paid back, but it soon became clear they had no intention of paying it back.

Intrigued at how the business justified holding on to money it had no right to, I contacted the owner, who told me he had been diagnosed with a brain tumour and needed the money.

Similarly, last August, Brandon Roelf did a R3,000 EFT to a Parow electronics company instead of to his wife's bank account. Alladin Electronics was on Roelf's EFT beneficiary list as he'd bought parts for his fridge from the company in the past.

He has, in the past nine months, repeatedly asked the owner to refund the money, but despite undertaking to do so, he has not.

When I approached the owner in March, he told me: "I am currently off sick and, therefore, check my mails infrequently. I will look into the issue and get back to you as soon as I am able to."

He failed to respond to a follow-up e-mail a month later.

Banking Services ombudsman Clive Pillay confirmed that funds paid into the wrong account can't be legally reversed by a bank without the consent of the account holder.

"The bank is not generally expected to act as a court of law in deciding on disputes between clients and third parties to whom funds have been transferred regarding services or goods not provided or any other dispute between the payee and the client.

"The bank is in no position to know whether a payment was indeed made by mistake or whether a dispute arose between the payer and the payee. It may, at most, try to assist a client in reversing the funds, but can only do so with the recipient's or account holder's permission."

The consumer would have to pursue recovery "outside the banking environment", Pillay said.

Very good reason to take your time and pay very close attention when doing EFTs.

CONTACT WENDY:
E-mail: consumer@knowler.co.za
Twitter: @wendyknowler

PLAIN THEFT

Someone who spends money that was incorrectly deposited into their account, knowing that it is not theirs, is committing theft, whether the payer chooses to take legal action or not. It’s very easy to “gift” a stranger. Many assume that banks verify all the details of an EFT transaction — name of account, branch name or number, and account number — and that only if all are correct is the transfer successful. But that’s not the case — all it takes for a transfer to happen is for the number in the account field to be a valid account of the selected bank’s.

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