Incorrect bank transfer – what now?

The reclaiming of erroneously initiated payments is often difficult

Since the Payment Services Act (Zahlungsdienstegesetz) came into force, only the customer identifier “IBAN”, agreed between the customer and the bank, is relevant for the execution of the transfer. The bank no longer matches the recipient's name with the IBAN. In principle, there is no claim for a return transfer against the beneficiary bank if the latter cannot be accused of any error in booking the erroneously initiated transfer.

Since 01.08.2014, only the so-called IBAN (International Bank Account Number) has been used in Austrian payment transactions to make euro transfers and euro direct debits. As of February 1^st, 2016, cross-border euro payments within the European Economic Area can only be made using the IBAN. Since this introduction, the name of the recipient is usually no longer matched with the IBAN on the transfer by the bank. For this reason, we should make sure that there is no typing error when entering the IBAN.

But what can we do if we make a typing error?

In general, the recipient of the incorrectly made transfer is entitled to claim restitution under the Austrian Civil Code (Allgemeines Bürgerliches Gesetzbuch), as the recipient would otherwise be unjustly enriched by the amount transferred. The wrong recipient is therefore generally not allowed to keep the transferred money. Claims for repayment are sometimes countered by the creditor with the objection of bona fide consumption.

In many cases it is difficult to find out the identity of the wrong recipient. Due to banking secrecy, which is regulated in the Banking Act (Bankwesengesetz), banks are generally not allowed to provide information about the identity of their customers. However, a letter of demand from a lawyer can often be used to obtain repayment, provided that the bank is prepared to forward the information to the customer in question.

Should this also remain unsuccessful, the only option left – if the relevant requirements are met – is to initiate criminal investigation proceedings, in the course of which the recipient bank can be required to disclose the identity of the recipient by order of the investigating authorities.

As a result, the lack of matching between the (correct) recipient name and the IBAN opens up a risk that should not be neglected, as an incorrect recipient IBAN can lead to considerable financial losses. Due to existing legal and factual obstacles in the enforceability of recovery claims against the recipient of the payment, the involvement of legal advice can make all the difference in the recovery of the claim.