Standing order paid to wrong account

[naomi24]

If a Standing Order is paid to the wrong account and it isn’t the bank’s mistake, is the recipient legally obliged to return the money?

[Maydup]

Who's mistake is it then?

[cathfromsaron]

first of all how was it paid to the wrong account?

it's all automated so it is *always* the banks fault, IF they were given the correct details to start with!

surely they should pay you back and try to get the money back later!

cath x

[naomi24]

The person who set up the Standing Order gave the bank a wrong account number.

[cathfromsaron]

then they should have it corrected straight away and hope the person paid has the courtesy to repay them!

but the bank did nothing wrong!

[Maydup]

Then you're best to ask the bank what the appropriate proceedure is. It can't be the first or last time this has happened and they'll have a standard letter to send the recipient.

[naomi24]

Had they realised they'd given the wrong details, obviously they would have corrected it immediately - and I know the bank has done nothing wrong. I just wondered what the legal position of the recipient is.

[sunny-dave]

It's equivalent to 'theft by finding' - the recipient knows it is not their money and should return it immediately when asked.

If it's a modest amount of money and the recipient has spent it (perhaps because they are disorganised and haven't checked their bank account in detail) then they will be given some leeway in how quickly the money is reclaimed.

[naomi24]

That's what I thought. Thanks for the confirmation, Dave.

[dzug2]

The recipient is legally obliged to repay it.

However enforcing this can be problematical - the bank is not allowed (without an expensive court order) to tell you who the recipient is, so taking legal action against them is going to be difficult.

So if the recipient just ignores any informal request the bank make for it back he's home and dry.

[naomi24]

Thanks dzug.

[Johnysid]

This happened to me once about 30 years back. I phoned a solicitor and he said "what do you think?". I said "I suppose it is someone else's money and should return it". He said "There is no morality without pain young man, phone your bank now."

I phoned my bank who deducted the amount that day and promised to return the money to its owner.