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Abstract:
This article appraises the legal consequences of mistaken payments in banking transaction and answers the question as to whether mistaken payments made by a bank, or bank customer during transactions, are recoverable by the parties involved and who is liable if the funds are not recovered. The article further explores the nature and circumstances under which payments may be wrongly made and the problems which may arise in practice and rules relating to recovery of money paid under a mistake and the defenses available in such circumstances. Customers and banks alike need to exercise due care, when giving out cheques or paying out drawn cheques, writing or entering account numbers, bank details and particulars. As banking transactions are mostly processed by account numbers and drawn cheques, it is necessary that this crucial piece of information should be obtain right. Although banks will often ask for an account name as well as an account number, there are usually system failure or the system maybe hacked for the purposes of committing fraud. This article posits that the banks should be able to solve these problems which hamper effective service delivery.
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