Be careful making bank transfers

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!

How to pay for things in Germany

Today in the Monday Podcast I talk about how to pay for things in Germany.

Cash still rules in many parts of the country and people and some businesses are vary wary of paying with cards.

Restaurants, for example, often prefer you to pay cash. Supermarkets accept ec-cards – a debit card linked to your bank account. But only larger businesses such as petrol stations, out-of-town supermarkets and shops in larger cities such as Frankfurt will normally accept credit cards.

As Germany no longer issues eurocheques, payments between private people are often done by bank transfer – called Überweisung.

Paying bills can be done with an Überweisung but often you will be required to agree to direct debit – Einzugsermächtigung or Lastschrift. Except in special circumstances you can require the bank to return any money within six weeks that has been wrongly taking using this method.

If you order goods online you may be required to pay in advance – Vorkasse – but some online shops will send their goods by Nachname, meaning that you pay the postman when the goods arrive.

To find out more, listen to the podcast:

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