Tale of money transfers

Can you get back money mistakenly transferred to a wrong bank account?

Srinagar, Publish Date: Oct 17 2017 11:34PM | Updated Date: Oct 17 2017 11:34PM
Tale of money transfersRepresentational Pic

Let me begin with an interesting tale of fraud. It may look redundant for the basic nature of the fraud. But at the end it carries a warning shot for greedy who get lured to murky offers. Last week two young men approached me with a bunch of certificates, containing death certificate, legal heir certificate, power of attorney, and funds ownership certificate (valuing $5000 million). There were also some bank receipts showing funds transferred from this place (Srinagar) to other banks in five different locations across India.

However, there were two interesting documents – a communication announcing transfer of a little over $4500 million and another communication suggesting seizure of funds by some tax authorities and advising the ‘beneficiary’ to deposit Rs.30 lacs as ‘income tax’ for release of the whopping amount of funds. Notably, one among the young man as a ‘beneficiary’ had transferred funds to the tune of Rs.20 lacs at regular intervals since August this year. Now he was in dilemma, whether to transfer additional Rs 30 lacs or not.

Meantime, while smelling some foul, he had learnt that the funds transferred to various accounts were withdrawn by the accountholders, except in one account where the transferred funds to the tune of Rs.3.50 lacs were not withdrawn. He had approached his bank to get ‘debit freeze’ in the account.

The purpose of the young men to share the case was to get the authenticity of these documents vetted by me. The reason for choosing me to vet the documents was based on this column. Actually, on August 2, 2017 I had shared a ‘tale of princess’ in this column in which I had cautioned gullible persons against the changing tactics of cyber criminals.

Surprisingly, the ‘beneficiary’ had started responding to the funds transfer offer from an unknown source and transferring funds regularly despite, as he acknowledged, coming to know about these kinds of cyber frauds through the said column. He was clueless and wanted retrieval of his funds from the fraudsters’ accounts, at least from the account where Rs.3.5 lacs were yet to be withdrawn by the fraudsters.  

Now, the story has left two important questions to answer. One, will you be able to get back the money mistakenly transferred to a wrong bank account? Two, what’s the solution for a person who has been duped like the above mentioned gentleman to recover his money from person/s who is/are unknown to him?

In case of first question, it is very important to be very alert while transferring money to a bank account. One transaction mistakenly involving a wrong account can make you struggle a lot to get back the money. It’s noteworthy, banking rules don’t permit a bank to reverse any transaction done wrongfully in a manner described above. Reserve Bank of India (RBI) rules make it responsibility of the remitter to provide the correct beneficiary account number and other details while transferring the funds.

However, the bank can reverse it only with the approval from the account holder whose account has been credited wrongly. But this is the most difficult job to do. Still banks in such situations have a role to act as a facilitator by providing the contact details and branch name of the account holder receiving unintended remittance.

In the case of second question, it’s the customer who is on the receiving side. For his greed, he has sacrificed logic. The reversal of funds which have been transferred to some fraudsters’ accounts in different banks is almost an impossible task. However, there is a way out to track them down.

Today, it’s impossible for banks to open or maintain an account without proper details about identity and address of an accountholder.  Last year in July, the RBI imposed Rs 27-crore penalty on 13 public and private sector banks, including PNB and HDFC Bank for KYC and Foreign Exchange Management Act (FEMA) violations. Besides the apex bank asked eight others including SBI and ICICI Bank to ensure strict compliance with guidelines.

So the persons who have fallen victim to the cyber fraudsters and have transferred funds to the given account numbers in any bank, can immediately lodge a complaint with the respective banks and ask for details about the fraudulent account holders. As already explained, the banks have to necessarily by virtue of the law maintain full profile of the accountholders. If it’s missing on the banks’ part, the sufferer (who was lured to transfer funds into the account) can take legal course against the bank. Here the chances are bright to trace the fraudster/s and recover money or otherwise also the beneficiary bank can be caught on wrong foot for violation of KYC norms if it fails to furnish details of the account holder.


(The views are of the author and not that of the institution he works for)