In a scam or fraud case, it is not always clear who the other party is, but sometimes a bank account number is known. Can that number then be seized to prevent money being diverted abroad?

In a procedure, the other party must be known

The defendant in a lawsuit is either a “natural person” (one or more people) or a legal entity (foundation, association, limited liability company, corporation, etc.). The plaintiff’s lawyer in the lawsuit will try to identify the other party. In 99% of cases, this is not a problem at all. Address information from municipalities’ basic records is confidential but attorneys are authorized to make inquiries. Information about companies and institutions at the Chamber of Commerce is public, except for private information about directors. The latter, however, can be requested by a lawyer. That way, through some research, the other party can usually be found and then subpoenaed. But it’s different with scammers. These are very adept at tricks to be untraceable. This is a problem for victims of scams. Who is the other party?

Scammer as unknown counterparty

In a case handled by our firm, a client was the victim of a scammer. The scammer had tricked our client out of more than €1,000,000. The scammer offered investments through a boiler room, a form of investment fraud. The money had been transferred to the scammer’s bank account at a major Dutch bank. A clear case of “tort“. In many cases, bank accounts are in a person’s name – that is, identifiable, with initials and last name. In corporate accounts, the name is often in the name of the company, that is, the official, statutory name. In all these cases, the fraudster can be found. But an owner of a business or a legal entity can also use a trade name. For example: the company is officially called Janssen & Jansen B.V., but that company uses the trade name Tintin Comics. In that case, a bank account can be opened with the name Tintin Comics. If someone pays money into the account of Tintin Comics, it is impossible to see that the company Janssen & Jansen B.V. is actually behind it. There may be logical reasons for opening a bank account with a trade name, but the risk of misuse by scammers and criminal figures is life-threatening. You would think that such a trade name would be found at the Chamber of Commerce, so the owner of the business could be found, but strangely enough, this is not always the case.

Question: can you litigate if you don’t know who your counterparty is?

The answer is: no. For a lawsuit, you need to know exactly who the other party is. This is stated in the Code of Civil Procedure, abbreviated “Rv”. So it’s a life-changing problem when a scammer takes money from you and makes you pay into an account with a trade name, because you don’t know who the account belongs to. And that’s why you can’t sue him or her to claim the money back. Our client was also faced with that problem.

Third party seizure at bank

We had the problem in this case that while we knew what account the money had ended up in, we didn’t know who the account belonged to. In cases like this, the key is not to wait and to seize the account as soon as possible so that the money cannot be siphoned off. But even then you have to deal with the obligation to designate the counterparty against whom you want to litigate. That is, according to art. 700 Rv. in the case of precautionary attachment, the debtor must be designated in the application. Otherwise, the court cannot give leave for the garnishment of the bank (by garnishment is meant: attachment of a party who owes a debt to the debtor. A bank where an account is running with a positive balance is legally a debtor to the account holder).

Broad interpretation of the law

We indicated in the petition to the court that we did not know the exact name of the debtor, but that it was certain that the bank knew this information, and that it was also certain that the account had been used for criminal activity. Thus, in our opinion, at this stage it is not yet necessary to make it exactly clear who the other party is. However, that may become clear in the near future. For example, as a result of intervention by the police and the judiciary or because the bank concerned realizes that it has to disclose the information because otherwise it will itself be in the wrong by facilitating criminals. On the one hand, banking secrecy exists and an account holder of a bank has a right to privacy. On the other hand, banks have a duty of care that also applies to others than their own customers, especially if the bank in question (unwittingly) facilitates criminal activities.

Judge grants permission

The judge authorized the freezing of the fraudulently used bank account. In addition, we are given additional time to conduct the identity search. Normally, the summons must be issued within 8 days, but the judge granted a 60-day period. That should be enough to force the bank to disclose the identity of its customer. Then the main procedure can begin.

Update August 25, 2017

The bank in question has since disclosed to our office the full identity details of the account holder and the proxies.


Posted by Marius Hupkes