Whenever you request guidance on how to invest to reach FIRE, you will often receive the comment you should invest in Emerging Markets e.g. through IWDA + EMIM. But should you?
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Last Updated on November 7, 2020 by Mr. FightToFIRE
This popped in my head a few weeks ago when transferring my deposit of 5% for my apartment in Brussels. Say that at the end of a busy day, you still have to make a large transfer to a company or a friend. It’s best not something you do while not being focused but a mistake is easily made. Especially now that transfers are made online and no longer through a physical office. So, can you get money back if you paid to the wrong account?
In case of a transfer into an old or wrong account number, the damage is not so bad. Money that is deposited into a closed account is automatically returned. If you enter a wrong account number, the payment will seldom take place in practice.
Each account has a certain format. There is a control number at the end which makes this type of mistake almost impossible.
Can I get my money back from a wrong bank transfer?
But what if that does happen? What happens if you entered a too high amount? A zero or number too much for example. Or you choose the wrong one from the list of stored beneficiaries and accidentally paid a bill with the wrong account number? Can bank transfers be reversed?
In these cases, you technically made a correct transaction so getting your money back is not so straightforward because the bank never checks whether an account belongs to the person mentioned on the online transfer. How can they know to who or which company you want to transfer a certain amount at a random moment? In theory, this could maybe be predicted based on your payment or transaction history. ING made a micro-step [NL] in predicting your payments but for the moment this is just a glorified view of your fixed payments. But that’s not the case today.
A wrong bank transfer got through, so you have to switch to plan B. Doing the following steps should help you retrieve your money and your peace of mind:
- Contact your bank
- Save details of the wrong transaction
- Contact the person you transferred the money to and ask for a reclaim
- If all else fails, go to court
4-Step Guide how to Get Money Back from a Wrong Payment or Transaction
Step 1: Contact your bank
In the first instance after a wrong payment, contact your bank. They may be able to stop the transfer. If this does not work, the bank may want to contact the beneficiary’s bank and ask it to refund the amount.
Step 2: Save the details
Keep a close eye on the evidence of the wrong payment and save the details of the wrong bank transfer. If you do not know to whom you have transferred – for example in the event of a typo in the account number – contact your bank: it will ask the payee bank for the details of the person to whom you have mistakenly transferred your money.
Please note that this is important because you can never cancel a bank transfer. No matter how fast you are to notify your bank after a mistake. You can only ask your bank to recover the money wrongly transferred if it has made a mistake itself and, for example, made a transfer more than once. In other cases, the following rule applies to the bank: paid is paid. You do not have to count on a refund from the bank itself.
Step 3: No response: Send a registered letter to the beneficiary of the transfer
When your bank contacts the receiver, there is a chance that the other party will refuse to cooperate. Even then, you don’t have to panic. Is he or she not responding? For a second the thought may flash through your mind “Can someone keep money that was accidentally paid into their bank account?” No, the receiver cannot keep money from a wire transfer to a wrong account number.
You have the right to reclaim the money yourself from the person in whose account it was deposited. Then send a registered letter to the beneficiary of the transfer. He or she is then legally obliged to refund it. Your bank can also provide the details to contact them after you made a wrong payment although they might not comply right away due to privacy reasons.
Step 4: If all else fails: Go to the court
If all else fails and the wrong beneficiary refuses, you can go to court if the amount involved is significant.
You will get back the wrong amount and the beneficiary will have to pay the costs of the lawsuit.
Chargeback of your wrong payment
You are more lucky if the wrong transfer is not made with a regular debit card but with a credit card of e.g. Visa, MasterCard, American Express. There are then possibilities to be reimbursed outside of the beneficiary.
Did you place an online order that you paid with your credit card, but the package does not arrive or the seller is bankrupt? Then you can recover your money from the wrong payment via charge backs.
It is sufficient to fill in the dispute form of the issuer of your credit card within a period of 3 months after the transaction. For my Belgian readers that made a wrong transfer and have a Visa or MasterCard go to www.mijnkaart.be [NL] and for American Express go to their own site [NL] If you are unable to prove that you are entitled to a refund and that you have made every effort, you may be able to count on a refund from the credit card issuer.