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Friday, 7 July, 2000, 09:26 GMT 10:26 UK
Fraud fear for online bankers
lots of money
Who should pay for fraud?
By BBC News Online internet reporter Mark Ward

Consumers who bank online are being warned that they risk being made liable for fraudulent purchases carried out in their name.

An investigation of electronic banking in the UK has shown that many people with online accounts have far less protection against misuse of their credit or cash cards than those who bank offline.

Currently, when a credit card is used fraudulently, or a cheque is forged, the consumer rarely picks up the bill. The money is usually refunded after an investigation.

But the report by the Foundation for Information Policy Research (FIPR) found that the small print in online account contracts reverses this state of affairs.

Open for e-business

The electronic watchdog warns that consumers could be left to prove that they have not acted fraudulently and be liable for the bills run up in their name.

The report says that the extra faith people have in e-commerce thanks to the advent of electronic signatures could be misplaced.

"It will do grave damage to the public confidence in e-commerce if its advent is used as an excuse to transfer to consumers the risks that should be carried by those who implement new electronic systems," said Nicholas Bohm, FIPR report author and member of the Law Society's electronic commerce working group.

Fighting fraud

Will Roebuck, legal advisor at e-commerce industry group e-centre UK, said the report lumped together issues that would be better dealt with separately.

E-centre UK is currently working with industry groups to draw up new legislation that would give consumers and businesses the same protection online and offline.

Mr Roebuck, speaking on behalf of e-centre member the British Bankers Association, said that banks would always investigate cases of fraud and ensure no-one is unduly penalised.

He added that banks will use different technologies to identify account holders to increase security and reduce the risk that the account could be compromised.

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