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#2256187 - 06/30/21 08:51 PM wire posting question
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,417
Pulling people out of the ditc...
looking for some clarity, please. can't locate definitive in Regs:

for wire transfers, is there a requirement to post based on customer name AND account number? Or can a bank only post based on account number?

thanks
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#2256231 - 07/01/21 07:38 PM Re: wire posting question HappyGilmore
HappyGilmore Offline
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Joined: Jun 2004
Posts: 19,417
Pulling people out of the ditc...
someone hit me directly, so answer provided
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#2256321 - 07/06/21 04:19 PM Re: wire posting question HappyGilmore
John Burnett Offline
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John Burnett
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Cape Cod
No. Wires are covered by UCC 4A. Section 4A-207 provides:

(a) Subject to subsection (b) of this section, if, in a payment order received by the beneficiary's bank, the name, bank account number, or other identification of the beneficiary refers to a nonexistent or unidentifiable person or account, no person has rights as a beneficiary of the order and acceptance of the order cannot occur.

(b) If a payment order received by the beneficiary's bank identifies the beneficiary both by name and by an identifying or bank account number and the name and number identify different persons, the following rules apply:

(1) Except as otherwise provided in subsection (c) of this section, if the beneficiary's bank does not know that the name and number refer to different persons, it may rely on the number as the proper identification of the beneficiary of the order. The beneficiary's bank need not determine whether the name and number refer to the same person.

(2) If the beneficiary's bank pays the person identified by name or knows that the name and number identify different persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was entitled to receive payment from the originator of the funds transfer. If no person has rights as beneficiary, acceptance of the order cannot occur.


(c) If (i) a payment order described in subsection (b) of this section is accepted, (ii) the originator's payment order described the beneficiary inconsistently by name and number, and (iii) the beneficiary's bank pays the person identified by number as permitted by paragraph (1) of subsection (b) of this section, the following rules apply:

(1) If the originator is a bank, the originator is obliged to pay its order.

(2) If the originator is not a bank and proves that the person identified by number was not entitled to receive payment from the originator, the originator is not obliged to pay its order unless the originator's bank proves that the originator, before acceptance of the originator's order, had notice that payment of a payment order issued by the originator might be made by the beneficiary's bank on the basis of an identifying or bank account number even if it identifies a person different from the named beneficiary. Proof of notice may be made by any admissible evidence. The originator's bank satisfies the burden of proof if it proves that the originator, before the payment order was accepted, signed a writing stating the information to which the notice relates.

(d) In a case governed by paragraph (1) of subsection (b) of this section, if the beneficiary's bank rightfully pays the person identified by number and that person was not entitled to receive payment from the originator, the amount paid may be recovered from that person to the extent allowed by the law governing mistake and restitution as follows:

(1) If the originator is obliged to pay its payment order as stated in subsection (c) of this section, the originator has the right to recover.

(2) If the originator is not a b and is not obliged to pay its payment order, the originator's bank has the right to recover.

Under paragraph (b), if the beneficiary's bank does not realize the name and number don't agree, it can rely on the number provided in the payment order. But if the beneficiary's bank knows the name and account number don't agree, and doesn't know what the originator of the order intended, the beneficiary bank should reject the order due to the discrepancy.
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