Can a bank reverse a payment I sent to the wrong account?

The rules apply to a mistaken internet payment — which the Australian Payments Network defines as a payment made on a consumer's instruction through an internet banking facility that results in the money going to the wrong account, usually because the BSB or account number was keyed incorrectly or because you were given the wrong details. Australian banks have since rolled out Confirmation of Payee name-checking under the Scam-Safe Accord, which the Australian Banking Association records as complete, so you may now get a name-mismatch alert before you confirm a payment. Treat that alert as a warning rather than a guarantee. Ring your own bank's fraud or disputes line as soon as you notice, not the branch on Monday — the Australian Payments Network describes recovery as a process run between the two financial institutions, and your bank cannot start it until you report.

The timetable comes from the ePayments Code, administered by ASIC, which ASIC describes as establishing a regime for recovering mistaken internet payments. Reported within 10 business days, the receiving institution assesses the claim and, if satisfied it was a mistaken payment, returns the funds — the Australian Payments Network describes the request being acknowledged within five business days and the funds usually returned within five business days, or ten where further information is required. Reported between 10 business days and seven months, the receiving institution places a hold on the funds and gives the recipient 10 business days to establish they are entitled to the money; if they consent the funds come back faster, and if they do not respond the institution may return them anyway. After seven months, recovery requires the recipient's agreement.

All of this assumes the money is still sitting there. The receiving institution is not required to push the account into overdraft to reverse a payment, and where the balance has already been spent your bank must make reasonable efforts to recover the funds without any guarantee of success. That is the practical reason speed matters more than paperwork. Some payment types are also carved out of the process — the Australian Payments Network notes limits including Centrelink direct credits — so the answer you get can turn on how the money moved rather than on how obviously it was a mistake.

One check worth making early: the ePayments Code is voluntary. It binds only the institutions that have subscribed to it. ASIC publishes the current subscriber list and says the other way to check is to read the terms and conditions attached to your account. Most banks, credit unions and building societies subscribe, and several non-bank payment providers do; smaller apps and platforms may not. If your provider is not a subscriber, you are relying on its own terms and on general law rather than on the Code's timetable.

A payment you were tricked into making is a different problem with a different answer. A mistaken payment is money sent to an account you did not intend to pay. A scam payment is money sent to the account you did intend to pay, because someone lied to you about who owned it — and the mistaken-payment process does not apply. Legal Aid NSW sets out the narrower circumstances in which a bank may still bear responsibility for a scam loss, such as ignoring fraud warnings on an account or failing to act after you reported unauthorised activity, while noting banks are not responsible for blocking every fraudulent transaction.

If the bank declines to recover the money or takes too long, put the complaint in writing to its internal dispute resolution team and ask for a written reference. Legal Aid NSW confirms that an unresolved dispute can then be taken to the Australian Financial Complaints Authority, which is free for consumers and can consider both mistaken payments and scam losses. Keep the transaction receipt, the exact time you first told the bank, and the name of anyone you spoke to — the date of your report is the single fact the whole timetable turns on.