Before we start, this is not an internet scam thing, money was not sent to Nigerian Prince, it was just transferred to a wrong person, 11 times!
My friend has set up a periodic bank transfer to pay an employee $2000 weekly last year. However, he unwittingly chose a payee details from previous payee list due to similarity of the names. This error was only discovered after 11 transfers had been made to the wrong person. Sounds unbelievable but it's true. The total of $22,000 has gone to the wrong recipient.
It seems lot of people doubt that how come there were 11 transfers before the error has been discovered. On their behalf, I have contacted my friend to make the story straight.
It's a husband and wife restaurant business, normally wife is in charge of setting up of payroll and make payment. Husband asked wife to setup a transfer to pay the employee. When the employee notice the payment didn't come, he contacted the husband, then husband couldn't see the payment to the correct person, so he paid him through another fund. He forgot to check with his wife on this matter.
The wrong recipient was paid once on 2016, so his bank detail is on the payee list.
That's why it was only discovered after 11 transfers.
The money was sent from Bank S to Bank A, which was wrong recipient's bank. He has contacted his own Bank S, told them the mistake and asked them to recover the money on his behalf. After a while, Bank S sent 11 letters to him, all but said one thing, Recover is Unsuccessful, End of Message.
He has contacted Bank S again, they told him they couldn't help him anymore, he should contact the person who wrongly received his money directly. Is this a correct advice?
He only has the person's name and bank detail, no address though. When he tried to contact Bank A, they told him they couldn't help him due to privacy laws. Fair enough.
Here are some options I can think of:
1) ask a lawyer to send a letter of demand to Bank A, demand Bank A to freeze the fund and return to my friend.
This is base on the Fact Sheet - Mistaken internet payments from Financial Ombudsman Service.
"Between 10 business days and 7 months: the recipient's bank will freeze the funds.
The recipient will then have 10 business days to show they are entitled to the funds. If
they do not, the funds will be returned to you. "
2) report to Police, it should be equivalent to the case that you drop your wallet, someone picked it up but unwilling to return it back to you. right?
3) engage professional service, e.g. private investigator, debt collector, even bikies? the dilemma is that the amount of the lost money may not be quite substantial to cover the cost in the end, so is it a worthwhile option?
Can any fellow OzBargainer come up a recourse to recoup the money? Or the money is lost forever due to bank unwilling to assist anymore.
Thanks in advance
TLDR: $22000 was sent to wrong person due to genuine mistake, not due to scam, how to get it back
Hi OP, my advice is as follows - please take with a grain of salt - its been like 15 years since I graduated law school and finished my last stints in private and public service. So, my advice is probably in the general right direction but may not have all the technicalities right.
Get a lawyer - no need for a big shot, and that is a fine sum. When I worked in private practice I did civil claims, which is exactly what this is. Law firms would 'buy' unpaid, say, vodafone (only an example, not real) bills. Then, sue that person to obtain a judgement. With a judgment in hand, you could then proceed to garnishee that person's wages, or take their car, or their furniture, etc.
The difference here is the proof - it's easy to prove money owed in a phone contract, its black and white. Your mistaken transfers would be harder to prove, albeit not hugely so. (This next point is most likely where I'd be wrong) In Australia there is the legal doctrine of unjust enrichment (law school reading: http://classic.austlii.edu.au/au/journals/SydLawRw/1993/39.p…) tbh I'm not sure if its entirely applicable here because the case facts are different, but its worth a try. Let me put it this way - remember when Westpac mistakenly gave some girl an unlimited credit card and she spent millions or similar on handbags etc. She tried to leave the country and was arrested at the airport I think. If they can do that, why not this. The point is, this is something a legal professional would probably be able to do, but not something your friend could do easily.
So, find a law firm that does civil claims - have a call with the lawyer and ask something along the lines of - do you buy unpaid say, electricity bills, and chase those down. That's probably a good indication they handle stuff like this. Maybe, if you only call 3 firms, you may or may not find a lawyer with experience doing this. But if you call 20 civil claims specialists, its highly likely you will find someone who has done exactly this.
Your friend would likely need to sign an affidavit stating the payments were in error etc, with proof of the transfers. They lawyer would then place the matter in court, and then track down the person's registered address to 'serve; them with the court summons. They will have 28 days to prepare. 90% of people do not show up, which means they lose automatically (what's the point of showing up, its not like you can provide evidence that you were entitled to the money). Then, you get a judgment in your favour, and free to pursue a number of means to recover the money. Garnishee, reposession, payment plan, whatever.
$22k is a fine sum, the civil claims firm i worked at (which has closed down, sold off now), bought bills for maybe 40-70 cents in the dollar depending on their recovery rate. So, its unlikely a civil claims specialist will see this as too small.
And, everyone, please understand the realities of working in a small business. I was the CFO of a startup going on $10m in revenue, and the accounting issues were many. If you haven't worked in a similar environment, please empathise, these mistakes do happen. I've made similar mistakes, my team have, including one who did not enter my super details. The focus should not be on the problem but on the solution. If you know more than me, please help, but please don't highlight the problem all over again. That's obvious enough without your input.
OP good luck, let us know how you and your friend go, I'll take the opportunity to update my legal knowledge