One Wrong Click Could Prove a Costly Error

Internet banking users have reached the highest level yet in the UK, with 22m banking online to deal with their current accounts, according to data from the Payments Council, yet online bankers could be losing a staggering ?439m a year in transactions that go astray because of a lack of protection. My Money Diva is a personal finance website run by woman who understand money matters, if you are worried about your finances or would like great tips on how to save money or make your moeny go that little bit further, visit their site today.

More than half of the 41.5m internet users are now banking online as a main way of dealing with their current account. Most of us using online banking services do so simply to check statements and balances, but increasingly we are also carrying out transactions online too.

But if something goes wrong with an online transaction, you could seriously struggle to get your money back, as currently it is one of the few areas which is not covered by any form of specific legislation to help those who make a mistake.

One small typo when transferring money to another bank account could land you with a serious problem. This could represent - in our estimation - a staggering ?439m to Brits which even the Financial Ombudsman is powerless to assist in retrieving.

You may well never see that hard-earned cash again if it goes into the account of a stranger. An accidental transfer of ?2,000 into the wrong account put one unfortunate bank worker in this very position last year.

The onus is on the person making the mistake to first contact their bank to request that the receiving bank contacts their customer asking them to return the money.
But under the current legislation, the only thing the bank can do is ?request? permission to retrieve the mistaken payment from its customer?s account. If that request is ignored or the bank refuses to act, there is nothing else that can be done by your bank.

As is it wasn't enough to have made the mistake in the first place, the Data Protection Act makes it hard for the person who made the error to get the money back, as the bank is not allowed to reveal customer details.

This, in turn, means you would not be able to take any court action against the individual, because you do not know who you would be chasing for the money. You could ask a judge to rule that the banks have to divulge the details so you can pursue the person, but this will cost you more money. Not exactly ideal when you have already lost money because of a simple mistake in the first place.

As it stands then, the law, as they had no hand in that money appearing in their account - 'stolen' your money.
It would be lovely to believe that the majority of people would be honest enough to return the extra money immediately - however, the reality is that in this economic climate an unexpected deposit into your bank account could be just too tempting to pass up on for many.

We are working on trying to build a case for the law to be changed to offer more protection to online banking users, but for now, there are five top tips on what you can do to try to protect yourself:
1. Check, double check, and then triple check the account details you input. Ask another household member to check them with you if possible.
2. Ensure you have selected the correct name if choosing from a drop-down list - a banking favourite where mistakes can easily occur.
3. Do not hesitate to contact the bank - even if this means sending an email in the middle of the night - the moment you realise a mistake has been made. The easiest way to solve the problem is to try and let the bank know before the money has actually left your account.
4. Transferring large amounts online is a risk, so perhaps if you have to move a significant amount of money from one account to another, you should consider going into the bank or using phone banking. At least then you will not be at fault if the wrong details are entered and will have some comeback. If using online banking is better for you, then be extremely careful. Many banks will have a limit on how much can be transferred in one day in any case - usually this is around ?10,000.
5. For larger sums, consider doing a series of smaller transactions to avoid losing a lot of money if something does go wrong.

MyMoneyDiva.com would like to hear from anyone who has had problems along these lines. Please go to www.mymoneydiva.com/ and tell us about what happened.

Alison Steed is the editor of the personal finance website for women MyMoneyDiva.com.