Hudson used a money transfer service to set up a transfer of $2,000 to his friend overseas. Hudson did not complete the transfer, so it remained pending in his account. A few days later, Hudson set up a different transfer of $2,000 to his mother. He immediately transferred $2,000 to the money transfer service and assumed that the money would be sent to his mother. However, the money transfer service linked the payment to the first pending transfer, to his friend overseas. Hudson’s friend did not return the money, so Hudson asked the money transfer service to cover his loss of $2,000.
Dispute
Hudson said that the money transfer service should not have linked the payment to his first pending transfer, as he intended it to go to his mother instead. Hudson said that the transfer he had set up to his friend was an incomplete transfer, as he never confirmed that he had paid. With the transfer to his mother, Hudson had clicked a button saying that he had paid for the transfer.
The money transfer service explained that when a customer transfers money to their account, it is not allocated to a specific transfer. Rather, they allocate it to the first pending transfer. They said this information was on their website. They also noted that Hudson would have been able to see that the transfer to his friend was still pending when he went to set up the transfer to his mother.
The money transfer service said they would not refund the money and Hudson complained to FSCL.
Review
Hudson thought the transfer to his mother had been completed after he clicked the button saying that he had paid. However, he then had the option to click a button saying that he had not paid, which showed us that the transfer had not been completed yet. This was supported by the money transfer service’s rules, which said that a customer can cancel their transfer up until the money has been sent out.
We explained that there was no way for the money transfer service to know that Hudson no longer wanted to complete the transfer to his friend, as the transfer was still open and pending in his account. We said that the money transfer service was following their standard practice when they linked his payment to the first pending transfer. We decided that the money transfer service was not liable for Hudson’s loss.
Resolution
Hudson did not accept our Ombudsman’s final decision, so we closed our file.
Insights for consumers
Money transfer services have no way of knowing that a consumer no longer wants to complete a transfer, so we encourage consumers to cancel any pending payments that they no longer want to proceed with, and before starting a new transaction.
