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Online banking loophole highlighted
September 15, 2009
By John Rowling

Consumers in the UK have been warned about a loophole in online banking systems that could leave them substantially out of pocket.

According to personal finance portal MyMoneyDiva.com, any money mistakenly transferred to the wrong account may be lost forever because, under current rules, banks cannot force individuals to return funds deposited in their accounts.

The website provides the example of London bank worker Clare Logie, who lost £2,000 after she accidentally transferred it to the wrong recipient from her online bank account.

"I have been battling with the bank for four months now and have yet to see a penny," she explains.

"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."

Under current legislation, banks can only request permission to retrieve mistaken payments from customers' accounts, and they are powerless to do anything else if their request is denied or ignored.

Last month, an online banking report from computing experts at Which? revealed that some of the UK's largest banks are doing too little to protect their customers from identity fraud, though Barclays' security measures were described as "excellent".

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