Besides the checksum, in some countries (e.g. in many banks in The Netherlands), the given name is also checked against the name associated with the target account [1].
> And besides, big banks still have to deal with checksum-passing iban typos on a daily basis. IBANs only have two check digits.
Actually the checksum was designed especially to deal with typos. As such, dealing with typo errors is usually not an issue at all.
What they do have to deal with is maliciously created IBANs though. However, if the account an IBAN should point at doesn't exist then the transaction usually just bounces.
They’ll ask the other bank if they’d like to return the money, and that bank will maybe ask the recipient if they’d like to return the money.
The recipient doesn’t want to return the money? You’re SOL. You can go to court, but they can trivially evade civil action by transferring the money overseas.
I think there's a misunderstanding here. If the customer mistypes the IBAN account number, the bank (website, app etc) will automatically reject it as invalid immediately, he won't have to deal with the customer service.
This is overly simplified so not entirely accurate, but if 100 customers typo their destination IBAN the modulo 97 checksum will probably let 3 of them through.
Wikipedia says that "where used, IBANs have reduced trans-national money transfer errors to under 0.1% of total payments", although there's no source for the claim.
I have more than once typed ref-number into the amount field. Ofc a transmission of $9765775689758 won't succeed, but if it did, I'm told there's little to be done about it, finders keepers.
Yeah, if you do that and the other party runs off with the money you’re screwed.
You can certainly pursue the matter in civil courts, but law enforcement does not like to touch this kind of stuff at all. If the recipient transfers the money overseas, you will most likely never be able to recover it.
I don't think that's the case everywhere. In Switzerland at least, if I send you money by mistake, I can claim that money back and you would have to give it back to me, even if you have spent it already - unless you can reasonably claim that you were unaware that this money was not meant for you.
As a result, if I received a large amount of money that I coulnd't explain, I would contact the sender or the bank first. I can't just spend it immeditaly and claim that I had no idea.
Where would it be non-reversible? At least in Europe you totally do not own money that is transferred to your bank account by mistake. You'll have to pay it all back. There have been court cases after people spent such windfalls, and yes, they are still in the hook for full returns.
