Have you ever worried about what might happen if you make a mistake while sending money abroad? It’s a common concern, and for good reason. A small error in the account number or bank details can seem like a disaster waiting to happen. Does the money bounce back, or does it vanish into thin air? Relax, mistakes happen, and in most cases, they can be fixed. Let’s break down what you need to know to handle such situations confidently.

Before we start the topic, please take note of the following terms;

1. Remitter/Sender – A Person who sends the money abroad.
2. Intermediary – The Intermediary bank, which routes the money transfer abroad from the sender to the bank account abroad.
3. Receiver/Beneficiary – The person who receives the money being transferred.

Required Documents for International Money Transfers

Here are the required documents for a successful international money transfer:

• Sender’s Information:
  • Identity proof (e.g., Aadhaar Card or Passport)
  • PAN card for tax identification
• Beneficiary’s Information:
  • Beneficiary’s name and address
  • Bank name and address
  • Account number
  • SWIFT code (for international transfers) or IBAN number (used in many European countries)

Got all that? Now let’s see what can go wrong and how to prevent it.

What Happens When You Make Mistakes in International Money Transfers?

Making a mistake when sending money abroad can be worrying. Let’s look at common errors and what happens when they occur:

1. Beneficiary Name Errors

When you’re sending money abroad, the recipient is called the “beneficiary.” Here’s what happens with name-related mistakes:

• Minor Spelling Mistakes
  • Example: Writing “Jonh Smith” instead of “John Smith.”
  • Outcome: The transfer usually goes through because banks prioritize the account number.
  • Important Note: While minor spelling errors might not stop the transfer, they could trigger the bank’s security checks.
• Big Mistakes with Names
  • Example: Using a completely different name.
  • Outcome: The receiving bank might stop the transfer to check what’s happening.
  • Risk: It could take a lot longer to send the money while the banks sort it out.

Bank Resolution Process:

When a beneficiary name mismatch is found during a money transfer, the bank follows these steps to sort it:

• The bank’s system checks the beneficiary’s name. If there’s a mismatch, the transaction is flagged for review.
• The remitting bank is informed of the mismatch.
• Then the remitting bank sends a query to the remitter for clarification and asks for additional documents.
• The remitter is asked to provide:
  • Beneficiary’s passport
  • Beneficiary’s bank statement
  • Any other ID proof
• After submitting the documents, the bank verifies their authenticity.
• The remitting bank communicates with the intermediary, and the intermediary connects to the beneficiary banks, sending the documents to resolve the mismatch.
• If the beneficiary’s name is confirmed, the funds are credited to their account. If not, the transaction may be rejected.

Resolving a name mismatch issue in an international money transfer can vary significantly in duration based on several factors, including the banks involved and the nature of the discrepancy.

Typical Resolution Timeframes

• Initial Hold: The transaction may be put on hold for 3 to 5 days while the bank verifies details.
• Query Resolution: If queries arise, delays could last several days to weeks.
• Interbank Communication: Some cases take up to 90 days for resolution.
• Best-Case Scenario: Minor errors might allow processing without delays.
• Worst-Case Scenario: Major discrepancies may lead to funds being credited to the wrong account, requiring complex recovery processes.

2. Incorrect Account Number

• Valid but Wrong Account:
  • Example: A sender enters the wrong account number by one digit, and the number belongs to an active account.
  • Outcome: Funds are credited to the wrong account.
  • Recovery Process: Resolving this issue requires the incorrect recipient’s consent, which can take weeks.
  • Warning: Some recipients might refuse to return the money.
    
• Invalid Account Number:
  • Example: Entering a number that doesn’t exist.
  • Outcome: The transfer typically bounces back, and funds return to the sender’s account within 3-14 working days.

Bank Resolution Process:

• Reversal of Funds: If funds were transferred to a valid account, reversing the transaction generally requires consent from the recipient. If they refuse, legal action might be necessary to recover funds.
• Documentation: You may need to submit a formal written request detailing the mistake and any supporting documentation (like transaction screenshots) to facilitate recovery efforts.

Also Read: How to Get Back the Money Sent to Wrong Overseas Account?

3. Missing or Incorrect SWIFT/IBAN Code

• Example: Forgetting the SWIFT/IBAN code while filling out Form A2.
• Outcome: The transaction gets delayed as the bank requests the missing details.
• Recovery Process: Double check the details, contact your bank, and update the information to amend the transfer.

Here’s What an A2 Form Looks Like: Form A2 PDF

This is a visual representation of the IBAN number structure:

Image Source: IBAN Architecture

4. Missing Special Instructions

• Example: A student sends tuition fees without including their student ID.
• Outcome: The university cannot identify the payment, causing delays until proof of transfer is provided.
• Recovery Process: Include references like student IDs or invoice numbers to avoid confusion.

Entering incorrect details in an international money transfer can have serious legal repercussions, particularly concerning compliance with financial regulations and the potential for financial loss. Here’s an overview of the key legal implications:

Legal Repercussions of Incorrect Details

Entering incorrect details can have serious legal implications:

• Compliance Violations: Errors can lead to scrutiny under laws like the Foreign Exchange Management Act (FEMA) in India, potentially resulting in penalties or restrictions on future remittances.
• Transaction Delays and Rejections: Mismatched details often cause delays or rejections, incurring additional fees and time.
• Financial Liability: Recovering funds mistakenly sent to the wrong account can be legally complex. If the recipient refuses to return the money, court proceedings may be necessary.
• Documentation Issues: Inaccurate reporting can lead to complications with tax authorities and audits.

Tips to Avoid Mistakes in International Money Transfers

• Triple-Check These Details:
  • Beneficiary’s full name (as it appears on their bank account).
  • Account number.
  • SWIFT/BIC code.
  • IBAN (for European transfers).
  • Any required reference numbers.
    
• Before Sending:
  • Ask the beneficiary to send their details in writing.
  • Take a screenshot or photo of their banking details.
  • Compare against official documents.
    
• After Noticing a Mistake:
  • Contact your bank immediately.
  • Have your transaction reference number ready.
  • Provide written evidence of the intended recipient’s details.
    
• Choose Reliable Services: Opt for trusted platforms like Extravelmoney.com, which offer expert guidance and support on money transfers and ensures your fund reaches abroad safely and speedily.
  
• Understand Fees and Limits: Familiarize yourself with the fees, limits, and exchange rates associated with your chosen transfer service to avoid surprises. A resident Indian is allowed to transfer abroad up to USD 2,50,000 equivalent in a financial year.
  
• Leverage Technology: Many banks and services offer apps that help autofill information, reducing the chances of manual errors. Use these tools to streamline the process.
  
• Seek Professional Help: If you’re unsure about any aspect of the process, don’t hesitate to contact customer support for assistance. It’s better to ask questions than risk making mistakes.
  

Also Read: 8 Mistakes To Avoid When Transferring Money From India.

In Conclusion

International money transfers don’t have to be stressful. By understanding potential mistakes and taking steps to avoid them, you can ensure a smooth and hassle free process. Double check your details, include all required information, and rely on trusted platforms to make your transfers seamless.

Need a reliable way to send money abroad? Visit ExTravelMoney.com for quick, secure, and hassle free transfers. Your peace of mind is just a click away!

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