With the increasing reliance on bank and electronic transfers, mistakes in transferring money have become a recurring issue, often putting individuals in difficult situations, especially when a sum is sent to the wrong account.
So, what is the legal position in such cases?
What procedures are available to recover the funds?
And what happens to the person who received the money and refuses to return it?
This article explores the legal framework, practical steps, and both civil and criminal consequences related to this matter.
First: What is the legal basis for reclaiming the amount?
The legal foundation in the United Arab Emirates is the principle of unjust enrichment, as stipulated in the UAE Civil Transactions Law.
It states:
“No one may enrich themselves at the expense of another without a legitimate reason. Whoever gains unjustly at the expense of another shall be required to return what they have gained, to the extent of the loss suffered by the other party.”
Based on this, a person who receives a sum of money by mistake is legally obligated to return it, and cannot justify keeping it by claiming they did not request the transfer.
Second: What are the practical steps to recover the amount?
1. Immediate contact with the bank
The first step is to contact the bank through which the transfer was made as soon as the error is discovered.
Provide the bank with all relevant information:
Date of the transfer
Sender and receiver account numbers
Transfer amount
Purpose (if available)
Expected response time from the bank:
Usually, the initial response takes between 3 to 7 business days, and may extend up to 14 days if coordination with another bank or external branch is required.
If the amount hasn’t been withdrawn yet, the bank may be able to freeze the funds or contact the other bank to halt the transfer.
However, the bank cannot deduct the amount from the recipient’s account without their consent, which makes legal cooperation essential.
2. Friendly contact with the recipient
In some cases, the bank may provide you with the recipient’s contact details (while observing data protection laws), allowing you to reach out and request a voluntary return of the funds.
Many people return the money voluntarily once informed of the mistake.
3. Filing a civil lawsuit
If friendly attempts fail, a civil lawsuit can be filed before the competent court to reclaim the funds.
Legal requirements:
Proof of the transfer (e.g. bank statement or transaction receipt)
Evidence that the transfer was made in error and not intended as a gift
Proof that the recipient has no legal grounds to keep the money
In such cases, the court is likely to issue a judgment obligating the recipient to return the funds with legal interest from the date of the claim.
4. Criminal action (if intent to misappropriate is proven)
If it is proven that the recipient deliberately denied receiving the amount or refused to return it despite knowing it was sent by mistake, this could be considered a criminal offense, such as unlawful appropriation or fraud under the UAE Penal Code.