A British hairdresser, who paid £26,000 ($42,000) of wages into the wrong bank account over two years has been left unable to get her missing money back – after the recipient spent it.

The woman logged onto the joint Nationwide account that she shares with her husband in May 2010 to arrange for £1,000 to be transferred into it from her HSBC business account each month.

But unbeknown to her, although she had entered the correct account name and sort code, she had keyed one digit of the account number incorrectly and the money was sent to the wrong person.

It has proved a costly mistake for the hairdresser – she didn’t realize that the money was being paid into the wrong account for more than two years, by which time some £26,650 had gone awry.

Unfortunately for her, the recipient of the money had spent it and is refusing to pay it back.

The building society says that there is nothing that it can do to retrieve the funds, and they can’t even identify the recipient due to data protection laws.

Although the hairdresser is legally entitled to demand the cash back, retrieving it in practice is a more complicated matter.

The woman told The Guardian: “Phone calls to Nationwide that night, many tears and numerous subsequent calls and letters, have left us with just £1,000 returned and a complete blank of information from Nationwide.

“We have been reluctant to tell anyone we know about the error, so have dwelled heavily on it ourselves.

“It leaves a sick feeling in my stomach to think someone has been spending all that hard-earned money and I’ve been going to work – running my own hairdresser’s business – when I could have been enjoying a little more time at home with my two sons.”

Hairdresser loses £26,000 by paying her wages into wrong Nationwide account for two years

The hairdresser did not realize that the cash wasn’t reaching her and her husband’s Nationwide account – the couple only receive online statements, she would only check the balance if she went to a cash machine and her husband sorted out all the bills.

Nationwide says that it has never encountered a case of “mis-applied credit” that went on for so long.

Although legally Nationwide can take funds wrongly attributed to an account back without the account holder’s permission up to six years after the error, the building society was unable to take the money back because it had already been withdrawn.

The building society says that they cannot tell if the funds were transferred to another account – the recipient withdrew the cash from ATMs.

Neither it nor HSBC are willing to reimburse the hairdresser as the mistake was down to customer error and they say that it could encourage fraud if they begin to pay back customers who transfer money to the wrong account.

Her family has been hit particularly hard by the loss of the money – her and her husband, a public sector worker, earn less than £50,000 a year between them and live in a modest semi-detached house.

The couple ended up going overdrawn for a period because they struggled without her income.

Taking her case to the Financial Services Ombudsman, the body which regulates banks and building societies might not help the hairdresser’s case either – it can only make a ruling if the bank has made a mistake and has no powers to get the money back from the other account holder.

Although the body says that it receives around 100 complaints about mis-applied credit each year, they are mostly from people who have wrongly been credited extra funds and believe that they should be able to keep the money.

Unfortunately for them, the law does not entitle them to a penny.