Is online banking more trouble than it's worth?

Share This:

• 

Text size: A A A

By Mark Burton
Know Your Money Editor

Online banking can be a quick and convenient option for Britons who do not have the time - or sometimes inclination - to queue in their local bank branch in order to organise their finances. However, individuals might make a mistake or have a query which only face-to-face contact or a person at the end of the phone can help with. So if something does go wrong, what rights do savvy surfers have when it comes to sorting out online banking problems?

Claire Logie sat down at her computer to transfer £2,000 into her savings account - but one click of the mouse sent the cash flying into an account she previously paid into - and it wasn't hers, the BBC reports. She works for one of the four big high street banks and is no internet novice. However, Ms Logie tells the BBC that online mistakes are easy to make.

"As soon as I'd done it I felt sick and very upset," she explains. She thought she would get her money bank after explaining to Alliance and Leicester the mistake. But months down the line she still has not received a penny.

What can online bankers in a similar position do?

The Financial Ombudsman is unable to help Ms Logie in this case as the complaint is not against the bank itself, the BBC notes. The online resource suggests that the only thing consumers seem to be able to do is not make the mistake in the first place.

Alison Steed, editor and co-founder of the personal finance website MyMoneyDiva.com, says: "Technically, it is not theft if the money has been transferred to their account in error; but that doesn't prevent the person who made the mistake from suffering the emotional turmoil that comes with losing any amount of money suddenly and unexpectedly."

She adds that she wants to see a change in the arbitration process, and even the law, to help protect customers who find themselves in such a situation. However, since many individuals will not want to shy away from online banking because of slips of the mouse, Ms Steed suggests that for large sums of cash, smaller transactions at a time should be made to minimise the financial impact of a mistake.

Furthermore, if a mistake is made, people should contact their bank as soon as possible should the payment be able to be stopped before it leaves their account. And choosing a recipient by a dropdown list should also be avoided by cash-concerned consumers.

"The one thing I find so hard to believe is how dishonest the recipient is - and that there is nothing the banks can do about it," Ms Logie asserts.

There is hope, however

While laws may not be in place for incorrect online banking transfers, the Financial Ombudsman is a useful way for consumers to voice concerns over their treatment and monetary products.

The watchdog has released figures which show consumers have complained about a number of products such as travel, home and motor insurance, mortgage endowments, savings accounts and unsecured loans.

In particular, the organisation has seen a rise in the number of phishing attacks on current accounts. This type of fraud is where a customer replies to an email, which appears to be from their bank but isn't, and in the process provides the fraudster with their security and access details.

"The issues we have to consider in these cases include the circumstances in which the consumer came to respond to the email and the extent of the relevant security warnings that the bank gave its online banking customers," the Financial Ombudsman Service says.

It seems to suggest that if a consumer was adequately warned by their bank, but still responded to a phishing email, they might not have as much protection as first thought.

However, when it comes to international money transfers, from November 2009, the watchdog will - for the first time ever - cover complaints about money-transfer operators which are not currently regulated by the Financial Services Authority. Neither will they need to be licensed by the Office of Fair Trading, as stated by the European Payment Services Directive.

The ombudsman also says that there has been a drop in the number of complaints about electronic-payment services which consumers use to buy and sell goods over the internet.

"We are usually able to settle cases like this informally at the early stage of our dispute-resolution process," it adds.

Have you had any online banking nightmares? Share your experiences and stories with other consumers on Know Your Money's comment thread.

Important Notice
This guide is intended for general information only and is not intended as, and does not constitute, any form of advice, recommendation or endorsement by us of any particular product(s) or services and you should rely on your own further research and professional advice in relation to your specific requirements and circumstances before purchasing any products or services. Use of this guide is subject to the Terms of Use of the KnowYourMoney site.