Today is a big day for the German banking world, as new terms and conditions have come into effect for almost every bank in the country.  This has some particular implications for those who make transfers between accounts.

Behind the new conditions is an EU directive which is meant to make transfers and direct debits between accounts throughout the continent easier, fairer and quicker.  Some of these rules where already in place in Germany, but others are new.

And whilst transfers may still not be common in some countries, most of Germany uses them to make payments, using either a paper-based form on on-line banking.  I haven’t written a cheque here for years!

Until now, you needed not just the sort code and bank account number of the recipient, but also the name.  The banks then checked that the name matched the account before transferring the money, at least if you used the paper-based forms.  Apparently this requirement was dropped at some stage for on-line and telephone banking.

This meant, that if you put the wrong account number of the form, of the bank teller typed it in wrong, or even a scanner with text recognition got it wrong, then the chances were that the transfer would not be made because the name would not match up.

Not any more.

The new condition no longer require the banks to do this, so if you make a mistake then the money is gone!  If the account number does not actually exist, then you can ask the bank to return you your money.  Note the fact that you have to ask them – previously they would have noticed and just returned it in most cases.

Worse still is if the account does exists.  In that case the amount will be transferred and someone will have received your money, just not the person who you wanted to send it to.

How do you get your money back then?

The answer is, you may not, since you have to rely on the recipient going to their bank and returning it.  If you ask your bank to tell you who the account belongs to so that you can ask them directly, they will probably tell you that they can’t give you that information due to data protection laws.

So you really do have to make sure that the numbers on the form or on your computer screen are correct!