Are you or your bank liable for on-line fraud?
“Banks slip through virus loophole” was the headline for an article by Danny Bradbury in the Guardian last week. This began: “Is my money safe? A quiet rule change allows British banks to refuse to compensate the victims of online fraud if they do not have “up-to-date antivirus and spyware and a personal firewall”
His article claimed that the new section 12.13 the Banking Code (which dictates how banks do business with customers) changes the balance of risk between customers and banks.
“Since the 2005 edition of the code (which dictates how UK banks do business with customers), section 12.9 has advised customers to keep their PCs secure. “Use up-to-date antivirus and spyware software and a personal firewall,” … The contentious addition to the new version is section 12.13. “Unless you have acted fraudulently or without reasonable care (for example, by not following the advice in section 12.9), you will not be liable for losses caused by someone else which take place through your online banking service.”
- read the full text of his article for the arguments that follow.
The report of the House of Lords on Personal Internet Safety recommended “the Government introduce legislation, consistent with the principles enshrined in common law and, with regard to cheques, in the Bills of Exchange Act 1882, to establish the principle that banks should be held laible for losses incurred as a result of electronic fraud”
