§ 355-4a-207

355.4A -207 Misdescription of beneficiary. (1) Subject to subsection (2) of this section, if, in a payment order received by the beneficiary'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 right s as a beneficiary of the order and acceptance of the order cannot occur. (2) If a payment order received by the beneficiary's bank identifies the beneficiary both by name and by an identifying or bank account number and the name and number identify differ ent persons, the following rules apply: (a) Except as otherwise provided in subsection (3) of this section: 1. If the beneficiary's bank does not know that the name and number refer to different persons, it may rely on the number as the proper identificati on of the beneficiary of the order; and 2. The beneficiary's bank need not determine whether the name and number refer to the same person; and (b) 1. If the beneficiary's bank pays the person identified by name or knows that the name and number identify di fferent persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was

ys the person identified by name or knows that the name and number identify di fferent persons, no person has rights as beneficiary except the person paid by the beneficiary's bank if that person was entitled to receive payment from the originator of the funds transfer. 2. If no person has rights as beneficiary, acceptance of the ord er cannot occur. (3) If a payment order described in subsection (2) of this section is accepted, the originator's payment order described the beneficiary inconsistently by name and number, and the beneficiary's bank pays the person identified by number as permitted by subsecti on (2)(a) of this section, the following rules apply: (a) If the originator is a bank, the originator is obliged to pay its order; and (b) 1. If the originator is not a bank and proves that the person identified by number was not entitled to receive paymen t from the originator, the originator is not obliged to pay its order unless the originator's bank proves that the originator, before acceptance of the originator's order, had notice that payment of a payment order issued by the originator might be made by the beneficiary's bank on the basis of an identifying or bank account

before acceptance of the originator's order, had notice that payment of a payment order issued by the originator might be made by the beneficiary's bank on the basis of an identifying or bank account number even if it identifies a person different from the named beneficiary. 2. Proof of notice may be made by any admissible evidence. 3. The originator's bank satisfies the burden of p roof if it proves that the originator, before the payment order was accepted, signed a record stating the information to which the notice relates. (4) In a case governed by subsection (2)(a) of this section, if the beneficiary's bank rightfully pays the pe rson 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: (a) If the originator is obl iged to pay its payment order as stated in subsection (3) of this section, the originator has the right to recover; and (b) If the originator is not a bank and is not obliged to pay its payment order, the originator's bank has the right to recover.

tion (3) of this section, the originator has the right to recover; and (b) If the originator is not a bank and is not obliged to pay its payment order, the originator's bank has the right to recover. Effecti ve: January 1, 2025 History: Amended 2024 Ky. Acts ch. 10, sec. 30, effective January 1, 2025. -- Created 1992 Ky. Acts ch. 116, sec. 38, effective July 14, 1992.