James Watt, the co-founder of BrewDog, shared a shocking story about how a small banking error nearly cost him £51.2 million (approximately $64.9 million USD). In a detailed LinkedIn post, Watt revealed the nerve-wracking events following a misstep during a significant financial transaction in 2017. His candid account serves as a stark reminder of the importance of meticulous attention to detail in financial matters.
The Costliest Mistake of His Career
The trouble began after BrewDog closed its first major investment deal, an achievement that brought Watt a life-changing financial windfall. However, the celebration was short-lived when the expected funds failed to appear in his bank account.
Watt explained: "When the lawyers finally wired the money to my bank, I excitedly logged on to my bank account. Day 1: Nothing. Day 2: Nothing. Day 3: Still nothing."
Alarmed, Watt contacted his bank, only to discover that he and his assistant had mistakenly provided an incorrect sort code for the transfer. To make matters worse, they had verbally confirmed the incorrect details, adding to the complexity of the situation.
"My bank manager then hit me with what is still one of the worst sentences I have ever heard: 'We'll do our best to help, but since the mistake was on your end, there's a chance the money is unrecoverable.'"
The Chase Across Borders
The bank's investigation led them to trace the funds to an account in northern Russia. Watt described the ensuing four days as the "longest of my life," filled with anxiety and uncertainty about whether the money could be retrieved.
"I just prayed that the money had not been moved on, in which case there was zero chance I would ever see it again," Watt recounted.
After tense back and forths involving his bank and its Russian counterpart, the funds were successfully recovered. Watt described the relief as overwhelming, though the experience left a lasting impression.
Watt now takes multiple precautions to avoid similar mistakes, such as triple-checking bank details and splitting large sums into smaller transfers. "Since then, it feels like I check and re-check the details are correct on every single bank transfer at least 50 million times," he joked in his post.
The Risks of Misdirected Payments
Watt's ordeal underscores a common issue many face in today's digital banking landscape: misdirected payments. According to Which?, a misdirected payment occurs when funds are sent to the wrong account due to incorrect information, such as an incorrect sort code or account number. These errors can be challenging to resolve, particularly if the recipient disputes the transaction or if the funds are quickly moved.
Steps to Recover Misdirected Funds
Consumer advocacy groups like Which? offer guidance on how to recover misdirected funds. Key steps include:
1. Act Quickly: Contact your bank immediately upon discovering the error. Provide details such as the amount, the date of the transfer, and the incorrect account information.
2. Bank Investigation: Under the misdirected payments code of practice, banks must act within two working days to attempt recovery. While the code doesn't guarantee recovery, it sets standards for banks to follow.
3. Escalate When Necessary: If the funds cannot be immediately recovered, the bank may initiate an investigation. Customers can escalate unresolved cases to the Financial Ombudsman Service.
4. Preventative Measures: Services like Confirmation of Payee, introduced in 2020, help verify recipient details before transactions are processed. Double-checking account information and conducting small test payments can also reduce risks.
What to Do If You Receive Money in Error
Mistakenly receiving funds can also lead to legal complications. If you knowingly retain and use money sent in error, you could face charges for "retaining wrongful credit." Banks advise contacting them immediately if such a situation arises.
