Source: Radio New Zealand
A man in his 90s tried to transfer US$12,000 via an international money transfer service to his son’s overseas bank account, but one wrong number saw him lose it all. 3dart/123RF
A financial services dispute service says it has dealt with two cases recently in which large sums of money have gone missing when people tried to send them overseas.
In one case dealt with by Financial Services Complaints Ltd (FSCL), a man aged in his 90s tried to transfer US$12,000 via an international money transfer service to his son’s overseas bank account.
When the money did not arrive, the man realised he had entered the wrong routing number for the payment and had used the number for the money transfer service’s intermediary bank rather than his son’s bank.
The account number itself was correct.
The money transfer service asked for a “recipient bank statement” which could not be provided because the son had not received the money.
It was not until 10 working days after the man reported the error that the money transfer service attempted to recall the funds, FSCL said.
The service said that gave an opportunity for money sent to incorrect account details to bounce back and be returned without a recall being needed.
The overseas bank did not respond to the recall request.
The man’s son repeatedly tried to contact it but was told it could only provide information to the money transfer service.
When the service tried again to recall the money, the bank did not respond.
At that point, the man complained to FSCL, which reviewed the complaint and found the money service’s terms and conditions stated customers must provide correct payment details.
“If incorrect details are provided, the money transfer service is not responsible for money sent to the wrong recipient, and is only required to make reasonable efforts to recover the funds.”
FSCL agreed the service should have tried to recall the money earlier.
It said it could have been more helpful but it took reasonable steps to try to recover the money.
“The lack of response from the overseas recipient bank was not within their control.”
It said the service should pay the man $1000 for non-financial loss.
FSCL ombudsman Susan Taylor. FSCL
FSCL ombudsman Susan Taylor said she had another case in recent days in which a person was transferring money to a travel payment card and got the last two numbers the wrong way around.
That sent the money to another customer’s account.
“The other customer was based in Australia, and unfortunately he didn’t notice for two days that the money hadn’t appeared on his card account.
“By that time, by the time his own bank tried to recall the money, the person in Australia had withdrawn all the money and neither the bank nor the money transfer service were able to get it back.
“It was $100,000, so it was a huge loss. We just try to give the message all the time, it’s tragic when you see these cases, and it often is simple human error where even if you’re in a hurry, just slow down and check, double check, triple check that you’ve got all of those numbers right before you press the send button.”
She said in the first case, the money went to an American bank. “A person from New Zealand trying to deal with a massive overseas bank … who knows whether the money is sitting in an account there – the chance of the customer being able to get any traction with a large overseas bank is extremely low.”
Taylor said if people noticed something was wrong, they should get in touch with their bank or money transfer service as soon as possible. “There is a very limited window of time that the bank or money transfer service can act to recall the money. It’s important that you act really quickly.”
Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
