I’ve been making electronic transfers from my bank account for years and never had any trouble with them – just plug in the account name, number and BSB code into the form, and a few days later, the money arrives in the destination account.
I recently switched banks and unfortunately for me, a bank transfer failed – the money left my account but didn’t arrive at the destination account – but thankfully it bounced back a few days later! I verified the account number and BSB code I used with the destination bank, who said that it was all correct, but they flagged one possible issue – the account name.
Normally the account name isn’t something I worry about – I don’t always use my middle name, so my account names are all different, yet the bank usually manages to get my money to where it should go. However, it looks like my new bank is a bit more pedantic than my old one, as this thread on the Whirlpool forums suggests:
In a previous thread it was mentioned that ‘big banks’ do not cross reference account names and account numbers, and thus only a BSB and account number will suffice for transfers to go through. It was said credit unions/smaller institutions do manually cross reference account names / account numbers and therefore account names are required.
On further investigation I realised that I entered a dummy name for the bank transfer which failed – problem solved!
The Financial Ombudsman Service has more to say on account names matching when processing electronic transfers, in this document dated September 2003 (my emphasis):
Internet banking screens for online payments commonly require the name, and account number (including the
BSB) of the intended recipient’s account to be keyed in. Traditionally, the account name has been treated as part of the payment instructions on, for example, a deposit slip and the account name has always been an important part of the instructions for payment of a cheque. Payers often assume that the name and account number for a deposit will be checked against each other before the funds are credited to the payee’s account. In practice we know that an electronic transfer is processed solely on the basis of the account number.
This has the effect that, if the payer keys in the wrong account number the payment will be made but to the holder of the account number that has been keyed in. The mistake may only come to light when the intended recipient tells the payer that the payment has not been received. When the payer tries to find out where the payment has actually gone, he or she may be told that the recipient’s name cannot be released for reasons of confidentiality. Their bank may claim that it acted on the basis of the instructions it was given, that is, the account number.
The Ombudsman Service goes on to detail how the Bulk Electronic Clearing System (BECS) rules apply to online transfers, and account name matches – it gets complicated very quickly in regards to which bank is responsible for bank transfers misrouted due to account number / name mismatches.
So the moral of the story seems to be don’t fat finger the account numbers of transfers to big banks, as they might send the money to the wrong person – and pay attention to the account names for transfers to small banks, as they actually pay attention to the small details!