Fighting fraud: Belgian banks to check IBAN numbers by name

Fighting fraud: Belgian banks to check IBAN numbers by name
Credit: Belga

In the ongoing fight against fraud and phishing, Belgian banks will roll out a system to warn clients if they are about to transfer money to an account number that is not in the right name, the Belgian Financial Sector Federation Febelfin announced.

Currently, clients cannot check to whom exactly their money is being transferred, allowing internet fraudsters and scammers to create fake accounts that customers then transfer money to without realising it. To stop this, a system will check whether the IBAN number does indeed correspond to the name of the beneficiary.

"We have been working on it for some time. The preparatory work is now behind us and the procedure will be launched in February," Isabelle Marchand, Febelfin spokesperson, told VRT. Once the system is in place (it will be implemented over the course of the year), transfers will be verified and the customer will receive a warning if the account number and name of the beneficiary do not match.

In that case, the customer can choose to stop the transfer. This way, everyone can check whether the identity matches the owner of a given account number.

Getting tough on fraudsters

Automatically matching the account number and beneficiary name presents an operational and technical challenge, Marchand explained. "There is a great variation in the spelling of first and last names. Just think of 'Janssens' (which could also be spelt 'Jansens'). The system has to take all these variations into account, or we get too many error messages."

Such checks on the identity behind an account number already take place in the Netherlands and the United Kingdom. At the European level, too, there are many initiatives with the same aim.

In Belgium, Federal MP for the Flemish separatist rightwing N-VA party, Michael Freilich, submitted a bill on name verification and welcomed Febelfin's announcement. "I am pleased that the banks are taking up my parliamentary initiative and hope first and foremost that innocent fraud victims, both private individuals and companies, will be avoided."

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Consumer protection organisation Test-Achats has been arguing for a system like this for some time and also supports the bill that Freilich previously submitted on this subject. "Other countries have already implemented an IBAN control system, making Belgian account holders more interesting for fraudsters now."

While Test-Achats is happy to hear that the Belgian banks are working to implement such a control system, it also demands that banks take responsibility if a customer loses money due to this type of fraud because the check has not been carried out (correctly).

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