Internet banking has become a widely used tool among todays consumers, but many are unaware of the potential risk of losing money when transferring cash between accounts.
A loophole in e-banking law means that through making a mistake when filling out the details of the proposed bank account, you could accidentally move funds into a strangers bank, and find you have no guarantee that you will ever have the money refunded.
It has recently been reported that Clare Logie,a bank worker, lost £2,000 after entering the wrong account details when attempting to move money between accounts. After contacting her bank, she was told that the recipient was failing to respond when requests were made to retrieve the funds. "I feel sick to have lost so much money," she said. "With the concern about jobs at the moment no one wants to lose cash, so this couldn't have come at a worse time."
Under current legislation, your bank can only request to have the payment refunded when made in your error. If the recipient denies, or they ignore the request, your bank does not have the power to do anything more, so you could potentially lose out.
The current Data Protection Act also makes it very difficult to take legal action against the receiving account holder when attempting to recover the money, as banks are prohibeted from revealing customer details.
Gemma Smith, spokeswoman for the UK payments association, Apacs, says: "There is no legislation on this matter because it would be very difficult to come up with a law that would cover all situations.
"It's likely to be taking one person's claim over another, and a claim by somebody who isn't even a customer of the bank, giving no simple solution."
Apacs advises that anyone using the internet banking facility provided by their bank must "check, check and check again" that all details of the account you wish to transfer funds to are correct, to protect yourself against this flaw in the e-banking system.
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