Posted September 20, 2009 by Simon in News

£429m of internet banking payments go astray

Alison Steed, from financial website mymoneydiva.com, warned people were regularly making mistakes when filling in payment details, meaning millions of pounds are going astray.

She said that the authorities had no powers to recover the cash unless the recipient agrees to return it.

It is estimated that around one per cent of all online banking transactions are paid to the wrong person due to errors made online by banking customers when inputting the recipient’s bank details.


“As it stands, if any of the 21.5 million online banking users in Britain makes this mistake, there is absolutely no guarantee that they can get that money back. What is worse, is that there is no one out there at the moment who can help them,” said the former Daily Telegraph journalist.”

“There are no official figures for how often this happens, but even if just online per cent of the online transactions made each year go astray, with an average value of £570, according to the UK Payments Service, you could be looking at a staggering £439 million going into the wrong pockets.”

“In most cases, this money will be returned by the honest recipient, but if you are unlucky enough to find your money gets into the hands of someone with fewer scruples, then you may just have to kiss it goodbye.”


Bank worker Clare Logie accidentally transferred £2,000 into the wrong account and the recipient has refused to give it back.


“I feel sick to have lost so much money. With the concern about jobs at the moment, no one wants to lose cash, and so this couldn’t have come at a worse time,”

“I have been fighting with the bank for six months now and have yet to see a penny. The one thing I find so hard to believe is how dishonest the recipient is – and that there is nothing the banks can do about it.

“I am not a dizzy person. I am not an idiot. I made the mistake and it is very easy to do.”


Under current legislation, the bank of the person who paid the money can only ask the recipient’s bank for the cash to be returned and it is difficult to take legal action if this request is refused as the Data Protection Act prevents banks from revealing customer details.

Emma Parker, of the Financial Ombudsman Service (FOS), said:

“It would be very difficult to argue that it is the bank’s fault and it would not be something that we would be able to uphold a complaint against the bank about.”

Heather Scott, of online bank Intelligent Finance, part of the Lloyds TSB Group, said:


“We tell customers to check, check and check again before sending money online.

“If the customer who received [the money] refuses to pay up – saying they were expecting the payment – the loss would be incurred by the customer who made the error.”