Harry bought some tools for his business through an overseas website and, on 13 October 2021, paid the seller about $5,000 using a money transfer service. The following day the seller said he had not received the money. Harry contacted the money transfer service who said it could take a couple of days for the money to appear in the seller’s account. In the meantime, Harry had not received the tools.
When the seller insisted he had not been paid, Harry became suspicious and contacted the money transfer service’s customer support team on 19 October 2021. The money transfer service investigated and then blocked transfers to the seller the following day.
On 21 October 2021, the money transfer service said that because the money had been sent overseas, they were unable to retrieve Harry’s funds, but that they would ask the seller’s bank to see if it was possible to recall the money.
On 6 December 2021 the money transfer service followed up with the bank and discovered that, as the result of an administrative error, the request to recall the funds had not been sent on 21 October 2021. The money transfer service immediately sent the recall to the bank, but by this time the account had been closed.
When Harry complained that the money transfer service had not done enough to recall his money, the money transfer service accepted responsibility for their failure to send the request to the bank on 21 October 2021 and offered Harry $150 as compensation for this oversight.
Harry did not accept the money transfer service’s settlement offer and complained to FSCL.
Harry complained that the money transfer service had not done enough to recall the transaction and that, if the request had been sent to the bank on 21 October 2021, it may have been possible to recover the money.
Harry also considered that the money transfer service could have prevented the loss in the first place if they had proper protections in place to prevent scammers from using the service.
The money transfer service agreed they should have sent the request to the bank on 21 October 2021, but they did not accept that their error had caused Harry’s loss. The money transfer service said that there was no guarantee that Harry’s money would still have been in the seller’s account on 21 October 2021. The money transfer service again offered Harry $150 as compensation for inconvenience.
The money transfer service said that they do have mechanisms in place to identify fraudulent behaviour, but Harry’s transfer did not trigger any alerts.
We explained to Harry that once the money had reached the seller’s bank account, the money transfer service no longer has control of that money. Although the money transfer service should have asked the seller’s bank to return the funds earlier, we were not convinced the recall would have been successful.
Harry transferred the money on 13 October 2021 and alerted the money transfer service to his concerns on 19 October 2021. In our experience, scammers will immediately withdraw money to avoid the possibility that the sender becomes suspicious. We considered it very likely that the money had been withdrawn by the seller before Harry even realised he had been scammed. We were not satisfied that the delay in sending the recall request contributed to Harry’s loss. This meant that there was no basis for saying the money transfer service were liable for Harry’s loss.
We also referred to information on the money transfer service’s website that said that once a transfer was complete, the transaction cannot be reversed or recalled. The website encouraged senders to know and trust the recipient before sending any money.
We accepted the money transfer service’s advice that they have mechanisms in place to identify fraudulent behaviour, but Harry’s transaction did not trigger any alerts.
We suggested to Harry that he accept the money transfer service’s offer of $150.
Harry did not respond to our final decision, so we closed our file.
Insights for consumers
Sending money overseas to someone you have never met in person is risky. Although the money transfer services have some protections in place, as the sender of the money, you are best placed to make sure the person you are dealing with is who they say they are and that their business is a legitimate business.