Transfer Fraud: Paying Fake Bank Details Does Not Discharge the Debt (Cass. com., 17 June 2026, No. 24-13.306)

French Supreme Court (Cour de cassation), Commercial, Financial and Economic Chamber, 17 June 2026, No. 24-13.306 (FP-B+R), quashing: CA Aix-en-Provence, ch. 3-1, 21 December 2023, No. 20/07539, and remitting the case to the Lyon Court of Appeal. Provision applied: Article 1342-3 of the Civil Code (code civil).

What happened in this case?

The case is an almost perfect illustration of what professionals call “fake bank details fraud” or the fake supplier scam. In May 2018, a French company specialising in the supply of fuel products sold, through a broker based in Italy, diesel intended to supply a ship calling at Marseille. The buyer was a foreign company incorporated in the British Virgin Islands. The fuel was delivered, and an invoice of €103,375.64 was issued.

That is when the fraudster stepped in. On 22 May 2018, the intermediary received an email from an address differing by just one letter from the supplier’s genuine address. The message came with the invoice and bank details (relevé d’identité bancaire, or RIB). Believing he was dealing with his usual partner, the intermediary forwarded the invoice and the bank details to the buyer, who transferred the requested sum to the account indicated.

The account in question belonged to a fraudster. The money could never be recovered. The real supplier never received its payment: it sued the buyer for payment of the invoice and, in the alternative, the intermediary for damages.

At first instance, the Marseille Commercial Court (tribunal de commerce) had ordered the buyer to pay the invoice to the supplier. But the Aix-en-Provence Court of Appeal, on 21 December 2023, overturned that judgment: it held that the buyer, who had never been in direct contact with the supplier, could legitimately believe that it was paying its creditor, and that the payment was therefore discharging by virtue of the “apparent creditor” rule. The supplier, its claim dismissed, was left without payment and ordered to pay costs. It is this judgment that the French Supreme Court has just quashed.

What is payment to an “apparent creditor”?

To understand what is at stake, we need to go back to an old rule of the law of obligations, now codified in Article 1342-3 of the Civil Code: “Payment made in good faith to an apparent creditor is valid.”

The idea behind this provision is to protect those who pay in good faith. The law considers that, if all appearances pointed to one person as the creditor, a diligent debtor should not be penalised for having believed those appearances. The payment definitively discharges the debt, even if it later turns out that the person paid was not the real creditor. This is an exception to the principle that payment must be made to the true creditor.

The whole question, in transfer fraud cases, is therefore this: can the fraudster who poses as the supplier and pockets the funds be classified as an “apparent creditor”? If so, the person who paid is released and it is the real supplier who bears the loss. If not, the person who paid must start again: they will have to pay a second time, to their real creditor this time.

Why does the Court refuse to treat the payment as discharging the debt?

The French Supreme Court quashes the appeal judgment on the basis of Article 1342-3 of the Civil Code, and lays down a very clear rule: “A third party who usurps the identity of the creditor is not an apparent creditor within the meaning of that provision.”

The reasoning is compelling. The Court of Appeal had itself found that the buyer knew that its creditor was the identified supplier: there was no uncertainty, and no dispute about the identity of the person to whom the money was owed. The buyer was never mistaken about who its creditor was. The only thing it was mistaken about was the bank account into which to pay the funds.

The distinction between the creditor’s identity and the account holder

This is the heart of the judgment, and it is a distinction that every manager, every accounting department and every individual should keep in mind. The Court criticises the Court of Appeal for having confused two things:

In other words, Article 1342-3 protects the person who is mistaken about the person, not the person who is mistaken about the account. The buyer was not dealing with a false creditor whom it had taken for the real one: it was dealing with its real creditor (whom it knew perfectly well), but paid the funds to a fraudster who had hijacked the bank details. The fraud concerned the IBAN, the instrument used to route the funds, and not the status of creditor.

Why the impersonator is not an apparent creditor

The French Supreme Court refuses to reward an appearance created by the fraud itself. To accept the impersonator as an “apparent creditor” would be to say that the more successful the scam (an email address copied down to one letter, credible fake bank details, genuine documents relayed on), the more the debtor would be released. The protective mechanism of Article 1342-3, designed for situations of legitimate appearance, would then be turned to the benefit of the fraud.

By refusing to classify the impersonator as an apparent creditor, the Court places the risk of the fraud not on the impersonated victim, but on the person who physically carried out the payment to the wrong account. This is a coherent logic: it is the debtor who controls the transfer operation, who chooses the channel, and who can check that the name of the beneficiary matches the actual holder of the account.

“He who pays badly pays twice”: what does the debtor risk?

The direct consequence of the judgment is severe for the person who paid the fraudster: since their payment has no discharging effect, their debt remains. They will therefore have to pay a second time, this time to their real creditor. This is the modern application of the adage well known to lawyers: “qui paie mal paie deux fois” (“he who pays badly pays twice”).

In this case, the buyer had nevertheless acted in good faith: it had never been in direct contact with the supplier, and had received the fake bank details only through a trusted third party. That changes nothing: good faith is not enough to make a payment discharging where there is no true apparent creditor. The loss of €103,375.64 therefore rests, as matters stand, on the payer, subject to the decision of the court to which the case is remitted.

The quashing is, moreover, total. The Court specifies that, pursuant to Article 624 of the Code of Civil Procedure (code de procédure civile), the quashing of the part of the ruling dismissing the principal claim for payment against the buyer entails, as a consequence, the quashing of the dismissal of the alternative claim for damages against the intermediary: everything is to be retried before the Lyon Court of Appeal.

What is the scope for victims of transfer fraud?

The publication status chosen for this judgment is no accident. Delivered by a full chamber formation (formation plénière de chambre) and intended for publication in both the Bulletin and the Annual Report of the French Supreme Court (the “FP-B+R” designation), it is meant to settle the case law in a rapidly expanding area of litigation. Fake transfer order scams are today one of the main sources of financial loss for businesses and individuals alike (property purchases, notaries’ payments, supplier invoices).

For the impersonated creditor (the one who actually supplied the goods or services and never received payment), the decision is protective. It confirms that its claim remains intact: the fact that a fraudster stepped in did not deprive it of its right to demand payment from its debtor. The victim of the impersonation does not have to bear the loss generated by a fraud it did not commit and whose execution it did not control either.

For the debtor who paid the funds, on the other hand, the decision calls for the utmost vigilance: any change of bank details during a business relationship must be checked through an independent channel (a phone call to a known number, never the one shown on the suspicious email). But above all, this debtor does not necessarily face the loss alone: the banks involved in the payment chain also have obligations.

What about the liability of banks?

This is where the litigation does not end with the judgment under comment. The person who ultimately bears the loss, whether the debtor ordered to pay twice or the impersonated creditor, may legitimately question the role of the banking institutions.

The subject is delicate, and precision is needed. The vigilance obligations arising from the anti-money laundering and counter-terrorist financing (AML/CFT) regime do not provide a basis for compensating the victim: the French Supreme Court recently reiterated (Cass. com., 4 March 2026, No. 24-19.588) that these obligations “have the sole purpose” of combating money laundering, and not of protecting private interests. Relying on an AML/CFT breach to obtain damages is therefore a dead end.

On the other hand, one avenue remains largely under-exploited: the technical obligations borne by payment service providers under the regulatory technical standards (RTS) supplementing the Payment Services Directive (PSD2), namely strong authentication, and anomaly detection and transaction monitoring systems. To these are added the recent systems for verifying that the beneficiary’s name matches the holder of the credited account, which are aimed precisely at intercepting this type of fake bank details fraud. Where a bank has failed in these obligations, its civil liability may be sought. This lever deserves to be examined case by case: it falls not under AML/CFT, but under payment services law.

Filing a criminal complaint and, where appropriate, reporting to the Tracfin unit nevertheless remain useful on a practical level (identifying accounts, attempting recovery, freezing funds), even though they do not in themselves constitute a civil basis for compensation.

What to do if you are a victim of fake bank details?

Whether you are the company or individual who paid the fraudster, or the creditor whose identity was usurped, several reflexes are needed without delay:

Legal characterisation is decisive, because it determines the strategy. Depending on whether you are the payer or the impersonated party, your arguments and your targets are not the same. The judgment of 17 June 2026 gives you, in many cases, a solid basis: payment to the fraudster is not discharging, and the claim remains.

Conclusion

By ruling that “a third party who usurps the identity of the creditor is not an apparent creditor”, the French Supreme Court closes a loophole that threatened all victims of transfer fraud. From now on, the fraudster can no longer serve as a legal shield: a person who pays fake bank details does not discharge their debt, and the impersonated creditor keeps their right to payment. The distinction between the identity of the creditor and that of the holder of the payment account, carefully set out in the judgment, is now an essential analytical tool in this area of litigation.

That said, the judgment does not have the last word. It designates who, as between the payer and the creditor, provisionally bears the loss; it does not settle the often decisive question of the banks’ liability in the payment chain. It is precisely on that ground (the technical obligations of payment service providers and the verification of the beneficiary’s details) that the best chances of recovering the lost sums now lie. A careful analysis of each case remains essential.

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