Under a new Code of Best Practice, unveiled today by the Payments Council, customers can expect their bank or building society to start the process of retrieving the incorrect payment within a maximum of two working days.

If a bank is unable to reclaim funds immediately – for instance if the recipient disputes its return – the customer will be notified of the outcome of their bank’s investigation in a maximum of 20 working days from the point of enquiry and in many cases much sooner.

Adam & Company, Barclays, Clydesdale Bank, Coventry Building Society, Coutts, HSBC Bank, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander UK, Tesco Bank, The Co-operative Bank, The Royal Bank of Scotland and Ulster Bank have signed up to the new Code. Others are expected to announce their participation in the coming months.

The launch of the Code follows research by the Payments Council which found that fewer than two in three Brits knew their electronic payments are addressed using the sort code and account number. Almost half incorrectly thought the name of the recipient is checked, while 15 per cent wrongly believed the recipient’s post code is checked.

Adrian Kamellard, chief executive of the Payments Council, said: “Sending a payment with the wrong sort code or account number is like sending a letter with the wrong post code and address – it won’t reach its intended destination and can be very difficult to get back.

“The overwhelming majority of the millions of payments we send each day reach their intended destination without any problem, but if you are unlucky enough to make a mistake this new process should help.”