Banks told to prevent more erroneous money transfers

Dutch banks will soon be implementing an IBAN name verification for all money transfers in an attempt to prevent erroneous transfers, the Dutch Payments Association announced on Tuesday, ANP reports.

The IBAN name verification system was developed by Rabobank, but will be used by all Dutch banks. The system verifies whether the name filled in for a money transfer matches the name of the account holder. A mostly correct name, with a typo or slightly misspelled surname for example, will be automatically corrected. But if the names are completely different, the user will get a warning. It is up to the user to decide what to do with that warning.

The verification is intended to reduce erroneous transfers and fraud. Dutch banks get about 1,300 thousand reports about erroneous transfers per month, according to the Payments Association. Most of them involve old account numbers and mistakes.But an average of about 200 per month involve fraud.

Rabobank will implement the check in the second quarter and the other banks will follow shortly after.