Verification of Payee: what the name check does against fake shops

Since 9 October 2025 your bank compares the payee name with the name on the account before every euro transfer. On 9 October 2026 this Verification of Payee turns one year old. It catches typing errors and some fraud schemes. With fake shops and classifieds scams it often shows green although the money is lost.

What Verification of Payee checks

Verification of Payee, called Empfängerüberprüfung in German, compares the name you enter for a transfer with the name the payee’s bank has stored for that IBAN. The legal basis is EU Regulation 2024/886. It has obliged banks in the euro area since 9 October 2025, including Austria. Banks in EU countries without the euro must follow by 9 July 2027.

According to BaFin, the German financial supervisor, the obligation covers instant and regular transfers in euro, from current account to current account. Paper transfers are only checked if you hand them in personally at a branch. Existing standing orders continue without a check, and direct debits are excluded. Under the regulation the check must not prevent you from transferring anyway.

Four results and what to do with each

BaFin describes three results, the Bundesbank and the consumer advice centre name a fourth. The Bundesbank writes that banks may show the cases as a traffic light in green, yellow and red, for example.

• Match. Name and IBAN belong together. The account belongs to the person or company you entered. The Bundesbank points out that this does not protect against every fraud, for example when the payee is a company with fraudulent intent. So check the shop or seller anyway.
• Close match. The bank shows you the name stored for the IBAN. Read the displayed name and compare it with the shop’s legal notice or the seller’s profile. If it fits, correct the name. If it shows a private person although you are ordering from a limited company, do not release the payment.
• No match. The bank warns that the money could go to an account whose holder is not the payee you named. The consumer advice centre advises not to release the transfer in this case and to contact the payee through an official channel. A fake shop usually has no such channel. Cancel the order in that case.
• Verification not possible. The account is outside the rule, such as a trust account or an account outside the EU, or there was a technical fault. The consumer advice centre advises here too not to release the transfer and to ask the payee first.

What the check does against fake shops and classifieds scams

It helps where the name on the website and the name on the account differ. A fake shop presents itself as a company, say a firewood trading limited company, and gives an IBAN for prepayment in the last order step.If the account belongs to a private person or another company, the bank reports a mismatch or shows the different name. That is reason enough to cancel the order. Why prepayment to strangers is so risky is explained in the article The prepayment trap.

On classifieds platforms it catches a scheme the consumer advice centre describes: criminals change the bank details in the profile or in the messages. If you enter the seller’s name and the account belongs to someone else, the check flags it.

Where the name check is useless

The check compares a name. The Bundesbank writes (our translation): “The check can only identify discrepancies between IBAN and name.” In these cases you get a match or no usable answer:

• The account is in the name given. If the shop names a private person as payee in the order step and the account belongs to that person, the bank reports a match. The check does not know that the shop presents itself as a company. You have to make that comparison yourself.
• Money mules. According to German police crime prevention, criminals use job offers to recruit people who provide their current account for other people’s payments. In fraudulent sales, the buyer is told to transfer the price to such a money mule’s account, and the goods never arrive. The account belongs to a real person with a real name.
• Triangle fraud. In the variant the police describe, you pay an honest seller with whom the fraudster is negotiating at the same time. Name and IBAN belong together, and the fraudster gets the goods. More on this in the article Classifieds fraud.
• Accounts at payment services. If a payment service provider holds an account on behalf of several payees, under the regulation it only confirms whether the named payee belongs to that group. According to the Bundesbank, trust and clearing accounts are not covered by the rule. In both cases you learn nothing about the shop itself.
• Instant transfer. The check runs here too, but after release the money reaches the payee within seconds. According to the Bundesbank, instant transfers are also generally irrevocable.

How the warning gets talked away

When there is a mismatch, the payee needs an explanation to get you to pay anyway. We had not found an official report by 3 October 2026 stating that fraudsters proceed this way. The following three excuses are our own examples, derived from the scheme. We cannot document them. Each has a counter-check:

• The mismatch is said to be normal because it is the accounts department’s account. The Bundesbank gives entering a company name that differs from the invoice as an example of a minor discrepancy. In that case the bank shows you the registered company name. If a person’s name appears, an accounts department does not explain it. Call the company on a number you looked up yourself.
• The check supposedly does not work with the trader’s bank yet. The obligation has applied to all banks in the euro area since 9 October 2025. If your bank reports that no verification is possible, the account may be outside the rule, for example in a non-EU country. The consumer advice centre then advises not to release the payment.
• You are told to enter the name your bank shows. That turns a warning into a match. The bank then only confirms that the account belongs to this person. Why a shop collects money into someone else’s account remains unanswered.

An honest trader tells you before payment who holds the account. If the trader evades the question, cancel.

Who is liable if you transfer despite a warning

Legally the risk is then yours. The consumer advice centre writes on its page about the IBAN check (our translation):

“If you send a transfer despite a warning, you bear the risk yourself. The bank is only liable if the check has previously expressly shown that name and IBAN match.”

The legal basis is Article 5c(8) of Regulation 2024/886. Under it, banks are not liable for transfers to unintended payees on the basis of an incorrect unique identifier, provided they have met the requirements of the article. If your bank failed to carry out the check and the payment was executed incorrectly as a result, it must refund the amount without delay. Under paragraph 7 it must tell you what consequences for liability and refunds it has if you ignore a warning.

With a fake shop there is a further point: you usually pay into the account the shop gave you. The regulation’s liability rule is designed for misdirected transfers. In our understanding it does not give you a claim against your bank when the named payee commits fraud. This is not legal advice. A consumer advice centre or your bank’s arbitration body can assess your case.

What the bank checks and what we add

On 3 October 2026 we compared the information from BaFin, the Bundesbank and the consumer advice centre with the text of the regulation. All four describe a name comparison, and none says the check assesses the payee. The Bundesbank states that it does not replace your own duty of care to check the plausibility of the transfer as well. We did not find an official figure on the BaFin and Bundesbank websites for how many payments the warning prevented in its first year.

Our tools address the questions the check leaves open. The IBAN check first recalculates the check digits of the IBAN in your browser. It then looks up whether there are fraud reports for this number that we have reviewed and approved by hand.Three details come back: whether there are reports, how many and when the first arrived. We do not name the account holder, only the bank knows that. An empty result is not an all-clear, because most accounts have never been reported.

The shop check answers the second open question, who is behind the site. It shows the domain age, matches the legal notice against the trade register and takes approved IBAN reports into account. Together with your bank’s name check this gives a picture: does the name on the account match the legal notice, does the legal notice match a real company, and has the account already been reported?

How to check before a transfer

1. Check the shop or seller.

   Enter the address in the shop check. Warning signs such as an incomplete legal notice or a very young domain are listed under Spotting a fake shop.

2. Enter the name from the legal notice.

   Enter the company name from the legal notice as payee. If the payment request gives a different name, that is already the first mismatch.

3. Read the result.

   With a close match, compare the displayed name with the legal notice. With no match or no possible verification, do not release the payment.

4. Check the IBAN.

   Look up the number in the IBAN check. If there are approved reports, do not pay into this account.

5. Choose the payment method.

   If the trader offers it, pay with a method that lets you reclaim money, such as direct debit, credit card or buying on invoice. Deadlines and conditions for each method are listed under Payment methods. If only prepayment to an unknown person remains at the end, cancel, because a transfer can hardly be recalled.

If you have already transferred

Call your bank immediately. According to the consumer advice centre, an executed transfer can no longer be reversed, and because many transfers are booked in real time, even a quick call usually no longer helps. What you need for that is under Recalling a bank transfer.Secure the records, file a police report and report the account so that it shows up in the IBAN check for the next person. The article Reporting a fake shop explains the order of steps.