I made an error on an IBAN transfer - how can I rectify matters?

[banter]

Having read the other replies in this forum regarding IBAN errors I would really appreciate any advise on the following and also encourage others to be aware of what can happen:

I made an online transfer of money from a large Irish bank to an UK bank account. I entered all the information correctly such as name of benificairy, address, sort code etc but the Iban number was entered incorrectly. The money was transfered to this IBAN number. (it was somebodies actual account in that branch, a large corporate customer). So that account now has the money and I cant get it back. I quote the following from an email my bank sent me (I removed dates):
"Our payment screen cannot match the bene name field to the IBAN field - when the transfer reaches the destination bank it would be upto them to cross check this information before crediting their customer.
We raised a query with the beneficiary bank on xxxxxx and they requested the customer who had the funds to return them. As per procedure they requested this numerous times with no response.
As per email dated xxxxxx we cannot get involved in a debit authority case".
My Irish banks online "customer care" team say they cant help me since the IBAN was validated. The benificaries bank (another large bank chain in the UK) say they cant deal with such confidential account matters and that I must ask my bank to correspond directly with them.
I assumed that while I was entering all the benificiaries details they would be cross checked to ensure that the money went to the correct account but no. All that is checked is the IBAN number and if thats valid the money goes there.
This is a real and certain error in the online banking system.
Does anyone have an experience of how I might get my money back?
And for everyone who uses online banking be very very aware of getting the IBAN correct.
Any help will be really appreciated.

 

[ClubMan]

Re: beware online banking errors-help needed

I entered all the information correctly such as name of benificairy, address, sort code etc but the Iban number was entered incorrectly.
...

This is a real and certain error in the online banking system.

I don't understand - surely the error was yours?

I am surprised that the banks involved don't seem to be able to help. Have you contacted the mistaken recipient of the money directly?

 

[banter]

Re: beware online banking errors-help needed

Thanks Clubman, OK the IBAN was wrong but all the other information was correct. There was no cross checking by the online banking to ensure that the information was correct. In fact the online banking system only used the IBAN number to process the transaction and ignored all the other information.

The English bank of the benificary will not discuss this matter with me and say I must contact my own bank. I have not contacted the benificary but by searching google with the IBAN I have found out who they are. I will contact them next. I do not know what regulations are in place to stop this happening again. For instance I saw one post in this forum which refered to the account holders name being required. And is the person with the money in the account entitled to keep it, I wonder if the bank transfered money in error to my account would they leave it there?

 

[MugsGame]

Re: beware online banking errors-help needed

Your bank doesn't have access to account details of the destination bank, so can't check them. All your bank can do is check the IBAN is valid before accepting the transaction. The destination bank is supposed to check that the IBAN corresponds to the account holder named on the transfer. I think your bank handled the transfer correctly.

However, your Irish bank should be willing to raise your error with the foreign bank who failed to fully check the transaction. Contacting the recipient is a good idea as it may lead to the quickest resolution if they are willing to cooperate. I'd also write to your bank asking them again to contact the foreign bank, and then escalate through your bank's complaints procedure. Mistakes like this must be quite common and the banks should have systems and procedures in place to deal with them. Don't be too apologetic about your error. It could happen to anyone...

 

[bond-007]

Re: beware online banking errors-help needed

Surely there is no obligation on the receiver in this case to return the gift he has received?

 

[banter]

Re: beware online banking errors-help needed

My bank, BOI,says they have done all they can. The highest I have so far escalated the matter with them is the head of their online customer care team.
Legally they are providing a service so is there not a duty of care on them to ensure it is carried out correctly?

The money transfer seemed to go from BOI, to LLoyds before unding up in a Barclays account. I can only presume that BOI use Lloyds as some sort of agent to move the funds because the transfer money was only intended for Barclays.

 

[Mpsox]

Re: beware online banking errors-help needed

Why is it an error on the online banking system. It's no different then if you walked into a branch to lodge the money into the intended receivers account and wrote the wrong account number on the lodgement slip.

Banking is driven by account numbers and sort codes, the banks systems simply do a modulas check on all of these and if it is a valid sort code and account number then the money will be posted to the account, no banking system that I am aware of will actually check to see if the payee name matches the account details you put in

Harsh reality of this is that you lodged the money to the wrong customers account. That is not BOIs fault and I don't see why they have any responsibility here. They cannot check the receiving customer details as they don't have it.

Likewise the responsibility of the receiving bank is limited as well, basically you lodged money to one of their customers accounts.

The banks have done nothing wrong here, you gave them the wrong instructions

 

[Brendan Burgess]

Re: beware online banking errors-help needed

Banter

Bank of Ireland has done nothing wrong here, from what I can make out.

You asked them to transfer money to a particular IBAN number and that is what they did.

They have followed up on your behalf, but if Barclays or their client don't respond, there is little that the Bank can do.

It's a very interesting question - how do you recover from such an error made by yourself? It's the first I have heard of it happening, so I am guessing that it's not that widespread.

Try the European Consumers Centre as it deals with international transfers. They may well know how to resolve it. If it's from one Irish bank to another, it gets fixed very quickly.

Brendan

 

[ClubMan]

I have edited the thread title to more accurately reflect the nature of the original query.

Seems surprising that an erroneous IBAN would happen to match a real account? I made a similar error with a domestic transfer and the erroneous account details did not hit a real account. See here. I would have thought that chances of making a mistake with an IBAN and it validating OK (e.g. via whatever checksum is used) and hitting a real account were very slim?

 

[banter]

Thanks for all the responses. You may be interested to note that the BOI online system made me input the sort code and the account number which where correct, it was only the IBAN number that was wrong. As I understand it the IBAN number is generated from the sort code and account number so it would have been very easy for BOI to have a simple computer generated check to see if the relevant fields match. And then I would have got a "computer says no" response which I read here banks are quite fond of.
How many of us have made transactions on the internet using our credit card and been asked for the ccv (last three digits on back of card), I assume they are cross checked. Similarly an online banking system should have some form of cross checking. How else are we to feel secure using it?

Regarding how unlikely it is to carry out such an error I dont agree because if one gets the first part of the IBAN correct (which I did) you have in reality entered the sort code, ie you've chosen the branch, then all thats needed is to make an error on the remainder to hit an account.

 

[bond-007]

You are saying that BOI ask for the sort code and account number as well as the IBAN/BIC? Strange indeed. AIB only asks for the IBAN/BIC first and only if this is not available will it allow you to enter the old fashioned sort code/account number.

 

[Mpsox]

IBANs are based around a country code, a bank code and then your normal sortcode and account number. If the BOI system allows you to input the payees sortcode and account number and then their IBAN elsewhere and the 2 did not matchup, I'd describe it more of a design failure on their behalf, rather then a fault

However, are you absolutley sure you input everything correct?

 

[banter]

Bond 007
Yes BOI ask for the sort code and account number as well as the IBAN/BIC. They even go on to ask for the swift code, bank name, bank address, country code and the beniciaries name and address. I have a screen shot of the transaction which I will post when I figure out how to get it on the web.

 

[banter]

IBANs are based around a country code, a bank code and then your normal sortcode and account number. If the BOI system allows you to input the payees sortcode and account number and then their IBAN elsewhere and the 2 did not matchup, I'd describe it more of a design failure on their behalf, rather then a fault

However, are you absolutley sure you input everything correct?

Yes, I have double checked and everything is completely correct.
The online system asked all the right questions, had all the information, yet it didnt not carry out simple cross. I'd like to think it was a fault rather than a design failure.

 

[mathepac]

IBANs are based around a country code, a bank code and then your normal sortcode and account number. If the BOI system allows you to input the payees sortcode and account number and then their IBAN elsewhere and the 2 did not matchup, I'd describe it more of a design failure on their behalf, rather then a fault

However, are you absolutley sure you input everything correct?

There is a good description and discussion of IBAN here http://en.wikipedia.org/wiki/International_Bank_Account_Number
This may not be definitive, but the indications are that the current system is a bit a kludge as internally the clearing banks vary in their implementation of account numbers, sort and routing codes on a country by country basis.

I agree that banks could and should do more to ensure that the details entered are "correct", but I have a little routine that I go through to test that my money goes to the correct beneficiary via electronic payment systems.

Having set up and stored the beneficiary's details on the on-line banking system, I initiate a small payment, send it off into cyberspace and look for confirmation that it has reached the correct beneficiary before sending off big lumps of cash to God knows where.

So while I agree the validation process could be tighter, I think we as users of the systems also need to be responsible in our use of them, as we need to be with cheque-books, debit cards, credit cards and cash.

 

[Gulliver]

I made an online transfer of money from a large Irish bank to an UK bank account. I entered all the information correctly such as name of benificairy, address, sort code etc but the Iban number was entered incorrectly. .

The core issue of this thread raises an issue which has not been resolved in recent years - the banking issue of whether account name or account number takes precedence in the event of an inconsistency between them.

It may not be widely known that there is no legislation in Ireland which supports the transfer of funds by reference to account numbers. In the absence of such legislation, and the fact that it has not been tested by case law, I believe that the account name takes precedence. On this basis, any bank which credits a transaction by reference only to the IBAN is taking a major risk, and would probably lose if tested in court.

In the course of drafting the Payment Services Directive (passed by the EU last April) there were attempts to address this issue, and to give such precedence to the IBAN. This directive has not been incorporated into law in Ireland, but the very fact that it was considered suggests that the current position is as above.

As regards the likelihood that a valid account could exist which matches the erroneous account number provided by banter, the chances are fairly remote. The modulus check on an IBAN produces a check digit in the range 1-98. That does not necessarily reject 97/98 of all possible errors in IBANS, but comes close to that. When the IBAN is deconstructed by the destination bank, then the modulus checks of that bank are applied which should eliminate over 90% of erroneous account numbers. So the combination of these checks should trap well over 99.5% of all errors

 

[Brendan Burgess]

As regards the likelihood that a valid account could exist which matches the erroneous account number provided by banter, the chances are fairly remote. The modulus check on an IBAN produces a check digit in the range 1-98. That does not necessarily reject 97/98 of all possible errors in IBANS, but comes close to that. When the IBAN is deconstructed by the destination bank, then the modulus checks of that bank are applied which should eliminate over 90% of erroneous account numbers. So the combination of these checks should trap well over 99.5% of all errors

Hi Gulliver

I don't understand the technology you are describing here. But are you saying that if I put in a wrong number there is about .5% of a chance that it will be a valid number and my money will go into someone else's account?

While that seems quite low, surely there are thousands of such payments every day, and so there must frequently be money transferred into the wrong accounts.

Is there a protocol for fixing these errors?

What happens in practice if I transfer money into a wrong bank account in Ireland? I think that the bank just reverses it as soon as they are informed.

Brendan

 

[banter]

There is a good description and discussion of IBAN here http://en.wikipedia.org/wiki/International_Bank_Account_Number
This may not be definitive, but the indications are that the current system is a bit a kludge as internally the clearing banks vary in their implementation of account numbers, sort and routing codes on a country by country basis.

I agree that banks could and should do more to ensure that the details entered are "correct", but I have a little routine that I go through to test that my money goes to the correct beneficiary via electronic payment systems.

Having set up and stored the beneficiary's details on the on-line banking system, I initiate a small payment, send it off into cyberspace and look for confirmation that it has reached the correct beneficiary before sending off big lumps of cash to God knows where.

So while I agree the validation process could be tighter, I think we as users of the systems also need to be responsible in our use of them, as we need to be with cheque-books, debit cards, credit cards and cash.

I just read the article you refer to and it demonstrates that an IBAN is made up of several recognisable parts. These parts include the sort code and the account number. These two parts are not altered in the IBAN and actually form part of the IBAN number. The online system required these parts to be input. In my case a simple cross check would have spotted that they did not match and I would have my money now. I only wish I had known of your routine in sending a small amount first.

 

[mathepac]

Hi Gulliver

I don't understand the technology you are describing here. But are you saying that if I put in a wrong number there is about .5% of a chance that it will be a valid number and my money will go into someone else's account?

While that seems quite low, surely there are thousands of such payments every day, and so there must frequently be money transferred into the wrong accounts.

Is there a protocol for fixing these errors?

What happens in practice if I transfer money into a wrong bank account in Ireland? I think that the bank just reverses it as soon as they are informed.

Brendan

Below is a link to a description of Modulus 10 , 11 and Alpha check numbering, as implemented by banks and other organisations that want to attempt to eliminate data-entry mistakes at source.

[broken link removed]

Despite check digiting, there is still a (remote) chance that an incorrect but existing account number can be used, which is why banks now issue personalised cheque books and lodgment slips with pre-printed account numbers and sort-codes. I believe this is also why on generic Express Lodgment slips which are not pre-printed, there is a space for the depositer to fill in their mobile number in case of a query.

It is probable that no protocol exists for retrieving money lodged internationally to the wrong account, and I have no idea how this would work in Ireland, other than through a process of negotiation between the relevant parties. I can't see a bank in Ireland giving me back money I lodged to your account just because I say it was the wrong account, as it is now your money, unless someone (me) can prove differently!

 

[Gulliver]

Hi Gulliver

I don't understand the technology you are describing here. But are you saying that if I put in a wrong number there is about .5% of a chance that it will be a valid number and my money will go into someone else's account?

While that seems quite low, surely there are thousands of such payments every day, and so there must frequently be money transferred into the wrong accounts.

Is there a protocol for fixing these errors?

What happens in practice if I transfer money into a wrong bank account in Ireland? I think that the bank just reverses it as soon as they are informed.

Brendan

1.... The standard for IBAN includes a form of Modulo 97 check digits, in accordance with ISO 7064. The method by which this is applied in the case of IBAN is described in Chapter 6 of Document EBS 204 on the ECBS (European Ctte for Banking Standards) website www.ecbs.org
2.... Most credit payments are effected by pre-printed stationary or electronically, and so the incidence of error is low. When hand-entered or hand-written numbers are involved, people are generally very careful of transactions involving money. And banks will use other checks.
3.... SEPA, which is in operation since end Jan is intended for straight-through-processing, and as this progresses, further new checks will be made
4.... Self checking numbers (originally developed in Ireland for the ISBN number which appears in every book) only reject a percentage of erroneous numbers, and are never relied upon as the sole check. The system based on Mod 97 as used in IBAN appears to have an efficiency of well over 90%. The type of check described further up this thread only checks that the IBAN satisfies the modulo 97 calculation. It does not prove that the IBAN number exists or is a valid number.
5.... In Ireland, if a bank posts a credit to a wrong account, the bank cannot simply reverse the transaction. It must first seek permission from the holder of the account which was wrongly credited. If that permission is not forthcoming, then there are certain legal processes which may be followed. The precedent case here, as far as I recall involved Team Aer Lingus.