§ 4-A-207 — Misdescription of Beneficiary

New York § 4-A-207

• Jurisdiction: New York
• Law UCC: Uniform Commercial Code
• Part 2: Issue and Acceptance of Payment Order
• Art. 4-A: Funds Transfers

Text

Section 4-A-207. Misdescription of Beneficiary.\n (1) Subject to subsection (2), if, in a payment order received by the\nbeneficiary's bank, the name, bank account number, or other\nidentification of the beneficiary refers to a nonexistent or\nunidentifiable person or account, no person has rights as a beneficiary\nof the order and acceptance of the order cannot occur.\n (2) If a payment order received by the beneficiary's bank identifies\nthe beneficiary both by name and by an identifying or bank account\nnumber and the name and number identify different persons, the following\nrules apply:\n (a) Except as otherwise provided in subsection (3), if the\n beneficiary's bank does not know that the name and number\n refer to different persons, it may rely on the number as the\n proper identification of the beneficiary of the order. The\n beneficiary's bank need not determine whether the name and\n number refer to the same person.\n (b) If the beneficiary's bank pays the person identified by name\n or knows that the name and number identify different persons,\n no person has rights as beneficiary except the person paid by\n the beneficiary's bank if that person was entitled to receive\n payment from the originator of the funds transfer. If no\n person has rights as beneficiary, acceptance of the order\n cannot occur.\n * (3) If (i) a payment order described in subsection (2) is accepted,\n(ii) the originator's payment order described the beneficiary\ninconsistently by name and number, and (iii) the beneficiary's bank pays\nthe person identified by number as permitted by paragraph (a) of\nsubsection (2), the following rules apply:\n (a) If the originator is a bank, the originator is obliged to pay\n its order.\n (b) If the originator is not a bank and proves that the person\n identified by number was not entitled to receive payment from\n the originator, the originator is not obliged to pay its\n order unless the originator's bank proves that the\n originator, before acceptance of the originator's order, had\n notice that payment of a payment order issued by the\n originator might be made by the beneficiary's bank on the\n basis of an identifying or bank account number even if it\n identifies a person different from the named beneficiary.\n Proof of notice may be made by any admissible evidence. The\n originator's bank satisfies the burden of proof if it proves\n that the originator, before the payment order was accepted,\n signed a writing stating the information to which the notice\n relates.\n * NB Effective until June 3, 2026\n* (3) If (i) a payment order described in subsection (2) is accepted,\n(ii) the originator's payment order described the beneficiary\ninconsistently by name and number, and (iii) the beneficiary's bank pays\nthe person identified by number as permitted by paragraph (a) of\nsubsection (2), the following rules apply:\n (a) If the originator is a bank, the originator is obliged to pay\n its order.\n (b) If the originator is not a bank and proves that the person\n identified by number was not entitled to receive payment from\n the originator, the originator is not obliged to pay its\n order unless the originator's bank proves that the\n originator, before acceptance of the originator's order, had\n notice that payment of a payment order issued by the\n originator might be made by the beneficiary's bank on the\n basis of an identifying or bank account number even if it\n identifies a person different from the named beneficiary.\n Proof of notice may be made by any admissible evidence. The\n originator's bank satisfies the burden of proof if it proves\n that the originator, before the payment order was accepted,\n signed a record stating the information to which the notice\n relates.\n * NB Effective June 3, 2026\n (4) In a case governed by paragraph (a) of subsection (2), if the\nbeneficiary's bank rightfully pays the person identified by number and\nthat person was not entitled to receive payment from the originator, the\namount paid may be recovered from that person to the extent allowed by\nthe law governing mistake and restitution as follows:\n (a) If the originator is obliged to pay its payment order as\n stated in subsection (3), the originator has the right to\n recover.\n (b) If the originator is not a bank and is not obliged to pay its\n payment order, the originator's bank has the right to\n recover.\n