The ePayments Code also deals with mistaken internet payments, which happens when funds are sent to the wrong person. This may happen if the holder enters the incorrect account details, or is given incorrect information by the intended recipient.

If a person reports a mistaken payment, the bank or credit union must investigate and if possible request the return of the funds from the unintended recipient’s account. There are strict time limits for reporting a mistaken payment, and therefore it is very important to report the error straight away to increase the chances of return.

If a report is made within 10 days, and the bank or credit union is satisfied about the mistake, assuming there are sufficient funds in the recipient’s account, the funds will be returned.

If the report is made after 10 days, but before 7 months, the funds may be frozen in the recipient’s account to allow the recipient to establish an entitlement to the funds.

If a person receives money into their account unexpectedly, the recipient is not entitled to use the money. Once the mistake is discovered, the holder is entitled to recover the money through the bank or credit union.

The electronic transfer of money can be particularly vulnerable to error or scams. It is essential to ensure that all details are correct prior to transfer particularly where large sums are involved.