When the Account Name Doesn’t Match the Number: Should the Bank Be Held Liable?

I recently received an email from a friend — a lawyer working at Hana Bank in South Korea. He explained that his bank is currently dealing with a wave of fraudulent international transfers. In these cases, hackers had intercepted email communications between businesses and altered the beneficiary’s account number in the payment instructions. As a result, tens of millions of U.S. dollars were diverted into fraudulent accounts.

The receiving banks, located in the UK, Malaysia, Australia, the Philippines, Italy, and other countries, processed these payments despite mismatches between the beneficiary names and the account numbers. Most of them have refused to refund the stolen funds, leaving clients to consider legal action. The clients, supported by their sending banks, are preparing to file lawsuits, arguing that the receiving banks wrongfully credited funds to fraudulent accounts despite evident discrepancies between the account name and number.

When a Mismatch Goes Unnoticed

In recent years, many banks have shifted to fully automated payment processing. In this system, the account number has become the sole determinant for posting incoming funds, while the beneficiary’s name is often ignored — even when it clearly does not match the actual account holder.

When fraud occurs and money is misrouted to a scammer, the response from receiving banks is all too familiar:

“We followed the system. We’re not liable.”

But it wasn’t always this way

Having worked through both manual and automated eras of payment processing, I remember clearly how things used to be:

• Transfers were rejected if the account name didn’t match the account number.
• Even minor typos or misspellings prompted a request for confirmation from the remitting bank.
• Human oversight was the final safety net, and vigilance was non-negotiable.

Automation may have streamlined the process, but it has also removed a key layer of control — the ability to detect when something simply doesn’t look right.

System failure — or accountability gap?

Banks argue that their systems are functioning as designed: the payment is routed based on the account number, and the beneficiary name is not a required verification field.

But if a bank chooses to use a system that ignores clear mismatches between critical data points — account number and name — can it truly wash its hands of responsibility?

I believe the answer is: no.

If a bank benefits from the speed and cost savings of automation, it must also be willing to assume the risks introduced by that automation, especially when those risks are well-known and preventable.

Some countries are taking action

In the UK, for example, the “Confirmation of Payee” system now cross-checks the account name during domestic transfers. If there’s a mismatch, the sender is alerted and must confirm whether to proceed. This has significantly reduced fraud.

However, in many other jurisdictions — especially in parts of Asia — no such verification system exists, and the responsibility is still pushed back onto customers after the fact.

What can businesses do?

While waiting for regulations and banking systems to catch up, businesses must take proactive steps to protect themselves:

• Avoid sending payment instructions via unencrypted or unsecured email.
• Use secure, authenticated payment platforms with proper audit trails.
• Independently verify beneficiary details through a separate communication channel.
• Implement strict internal approval processes before authorizing large payments.

Closing Thoughts

Automation has brought efficiency — but at a cost. When a banking system ignores mismatches between account names and numbers — even when that mismatch is a red flag for fraud — we must question whether “the system” is truly working as intended.

Ultimately, a system that enables fraud is not a neutral tool.

Banks cannot claim the benefits of automation while disclaiming all liability for its failures.

It’s time the industry asked itself:

Does efficiency justify abandoning basic responsibility?

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By Mr. Old Man (Nguyen Huu Duc)

Trade Finance & International Payments Consultant