                                 CODE OF VIRGINIA

MISDESCRIPTION OF BENEFICIARY (§ 8.4A-207)

a. Subject to subsection (b) of this section, if, in a payment order received by
the beneficiary&#8217;s bank, the name, bank account number, or other
identification of the beneficiary refers to a nonexistent or unidentifiable
person or account, no person has rights as a beneficiary of the order and
acceptance of the order cannot occur.

b. If a payment order received by the beneficiary&#8217;s bank identifies the
beneficiary both by name and by an identifying or bank account number and the
name and number identify different persons, the following rules apply:

   1. Except as otherwise provided in subsection (c) of this section, if the
   beneficiary&#8217;s bank does not know that the name and number refer to
   different persons, it may rely on the number as the proper identification of
   the beneficiary of the order. The beneficiary&#8217;s bank need not determine
   whether the name and number refer to the same person.

   2. If the beneficiary&#8217;s bank pays the person identified by name or knows
   that the name and number identify different persons, no person has rights as
   beneficiary except the person paid by the beneficiary&#8217;s bank if that
   person was entitled to receive payment from the originator of the funds
   transfer. If no person has rights as beneficiary, acceptance of the order
   cannot occur.

c. If (i) a payment order described in subsection (b) of this section is
accepted, (ii) the originator&#8217;s payment order described the beneficiary
inconsistently by name and number, and (iii) the beneficiary&#8217;s bank pays
the person identified by number as permitted by subdivision (b) (1) of this
section, the following rules apply:

   1. If the originator is a bank, the originator is obliged to pay its order.

   2. If the originator is not a bank and proves that the person identified by
   number was not entitled to receive payment from the originator, the originator
   is not obliged to pay its order unless the originator&#8217;s bank proves that
   the originator, before acceptance of the originator&#8217;s order, had notice
   that payment of a payment order issued by the originator might be made by the
   beneficiary&#8217;s bank on the basis of an identifying or bank account number
   even if it identifies a person different from the named beneficiary. Proof of
   notice may be made by any admissible evidence. The originator&#8217;s bank
   satisfies the burden of proof if it proves that the originator, before the
   payment order was accepted, signed a record stating the information to which
   the notice relates.

d. In a case governed by subdivision (b) (1) of this section, if the
beneficiary&#8217;s bank rightfully pays the person identified by number and
that person was not entitled to receive payment from the originator, the amount
paid may be recovered from that person to the extent allowed by the law
governing mistake and restitution as follows:

   1. If the originator is obliged to pay its payment order as stated in
   subsection (c) of this section, the originator has the right to recover.

   2. If the originator is not a bank and is not obliged to pay its payment
   order, the originator&#8217;s bank has the right to recover.

HISTORY: 1990, c. 9; 2024, c. 652.