Insights for consumers
Before making large payments through a money transfer service, check the full account number carefully, including the final digits. Some services do not use suffixes, and changing even one digit can send the money to the wrong account. If you realise you made a mistake, contact your bank and the money transfer service immediately.
Alex gets one digit wrong when transferring money
On 3 September 2025, Alex attempted to transfer $100,000 from his bank account to his money transfer service account. Unfortunately, he entered one wrong digit at the end of the account number. Alex believed the final digits were a suffix, as is common in the New Zealand banking system, but the money transfer service does not use suffixes. Each digit forms part of a single account identifier.
Two days later, the money still isn’t in his account
With the money not in the intended account two days later, Alex reviewed the transaction details and realised he had made a mistake. Alex contacted the sending bank immediately. The bank agreed to initiate a recall request and advised Alex to also notify the money transfer service. Alex contacted the money transfer service that day. He explained that the payment had gone to the wrong account and asked for help recovering his money. The money transfer service said they could not take any action until they received the recall request from the bank.
An opportunist takes all the money
The next day, the unintended recipient withdrew all the money from their account.
What happens when the bank’s recall request is too late
Two days after the money was withdrawn, the money transfer service received the recall request from the bank. After receiving the recall, the money transfer service tried to reach the recipient but got no response. They told Alex that they could not reverse the payment without the recipient’s consent, and the money was already withdrawn from the account, so there was nothing else they could do.
Did the money transfer service miss the opportunity to get money back?
Alex thought that the money transfer service took too long to act after being told about the mistake. He thought this reduced the chance of recovering his money and complained to FSCL.
The money transfer service said Alex was responsible for entering the incorrect account number, and that they could not reverse the payment without the recipient’s consent.
They later offered $500 as a goodwill gesture, which Alex declined.
FSCL investigates the complaint
We found that the payment had gone to the incorrect account because Alex had entered the wrong account number. He was responsible for ensuring that the full account number was correct before submitting the payment.
Given Alex made a genuine mistake, we reviewed whether the steps taken by the money transfer service were reasonable and timely. We thought that the money transfer service could have placed a short-term hold on the disputed amount, and contacted the recipient account holder earlier and phoned instead of just sending an email before the recipient withdrew the money, as the money transfer service were told about the mistake the day before.
However, even quick action could not have guaranteed recovery of the money because the money transfer service could not reverse the payment without the recipient’s consent.
We said that it would not be fair to hold the money transfer service responsible for the financial loss, as they did not cause the error. Alex made the mistake, leading to the money going into another person’s account. Given that recovery was not guaranteed and the money transfer service had not caused the loss, we concluded that the money transfer service was not responsible for the $100,000 financial loss.
However, we could look at whether the money transfer service acted appropriately once notified of the mistake and whether they took reasonable steps to attempt recovery of the funds.
FSCL decides on an outcome for the case
We accepted that the money transfer service could not guarantee recovery, and they had no obligation to freeze the funds. However, we believe that there was a period of inaction, where the money transfer service could have acted more quickly, and didn’t.
This caused a lost opportunity to try to recover the funds. That lost opportunity caused distress and inconvenience to Alex.
We awarded $1,800 in compensation for non‑financial loss for the distress and inconvenience this caused Alex.
Alex accepted the final decision, and the complaint was closed.
