Problems with E-Banking

The relevant statutes and movements 5 How the current legislations adequately 6 protect the consumers References 7 QUESTION Analyse with relevant statutes and cases the problems with electronic banking and how the current legislations adequately protect the consumers overcoming these problems. ANSWER The following argon the problems with e-banking 1. prison term of honorariumThe opportunity for a node to countermand or can electronic payment is unclear. If the enchant is effective in the lead the countermand is received, conformanceingly the pay institution leave behind have paid in accord with its mandate and is not liable to reverse or restore payment to the customer. Cheques ar only paid or effective once cleared, and the paying bank holds records of the appropriate debit, however with EFT there are 5 mathematical successions of payment a. The fourth dimension of transmission. b. The entering of the transfer instruction into the transfer system. c. The time of recei pt of the transfer instruction by the paying institution. . The time when the recipient fiscal institution decides to accept the payment. e. The time when the recipient financial institution faiths the sum to the key of its customer. 2. Malfunctions ADIs accept liability for leave loss if there is a malfunction in the system. In the case where an electronic malfunction resulted in non-payment of an aggregate of money due on a lower floor a charter party pact, such that one of the parties lost the realize of a ship charter, resulting in the loss of millions of dollars, it may result to confirmatory or consequential loss.The Uniform Commercial Code, in the USA, prohibits recovery of consequential damages from a recipient bank for a delayed or otherwise mishandled funds transfer unless there is express written agreement permitting recovery between the bank and its customer. 3. Evidence of transactions EFT transactions are unremarkably evidenced at the point of transaction by a document proffered to the customer. The problem arises with the unauthorized or fraudulent use of the facility, this will result to the customer not discovering the unauthorized use until there is a periodic statement issued. . Security, fraud and liability In accordance with cheques and bills, a customer is not ordinarily liable for losing a bill, cheque or cheque book or failing to check bank statements for inaccuracies the duties owed by the customer to a bank are preferably limited in scope. However in the case of debit and credit placards, the duties are quite contrasting. The customer is under greater contractual duties regarding security and liability for fraud. He must keep the card in a safe endue and is required to notify the bank immediately of its loss or theft. 5. impairment of contractThe terms of e-banking account are set by the ADI and are varied upon notice from time to time. Customers have little bargaining strength and also problems with understanding the contractual obligations. To further illustrate this point, there is usually a Conditions of Use document supplied with a debit or credit card but rarely is it understood, and as soon as the customer signs the card or first uses it, they are deemed to have true the card on these conditions. The relevant statutes and cases illustrating the problems with electronic banking 1.ANZ vs Westpac (1988) 164 CLR 662, A meat company ( privy) had an account with the branch of the Westpac Bank. At the relevant time the account was overdrawn in the amount of $67,000. A customer presented to ANZ a cheque in favour of Jakes for $14,000, but, by reason of clerial error, ANZ credited Jakes account with Westpac for $114,000. By the time ANZ notified Westpac for the error, Westpac had applied the money in reducing the overdraft and in honouring a enumerate of Jakess cheques. Jakes paid back only $2,500 of the $100,000 before going into liquidation.ANZ brought an action against Westpac to recover the o verpayment, however Westpac sought to rely on the defence of ministerial receipt. Bth parties acted on the basis of concessions made by Westpac that the diminution of the overdraft anad the payment of certain cheques which could have been dishonoured by Westpac at the time was notified of the steal should be ignored for the purposes of determining whether the moneys had been applied. As a result of the concessions it was accepted by Westpac that it had not applied $17,021 of the payment and that it was liable to return this amount. . Mercedes Benz v ANZ and National Mutual Royal Savings Bank Ltd (Part 2), Mrs R was diligent by the plaintiff as a payroll supervisor. By army with the second defendant, she was given(p) forms for opening accounts for new employees of the plaintiff, and she received cards and PINs for accessing those accounts. The plaintiff paid wages and commissions by issuing a cheque in favour of NMRB who then credited the appropriate accounts. There was virtuall y no supervision of Mrs R after her appointment, nor did the second defendant ever read/write head the creation of accounts.Mrs R defrauded the plaintiff company using several different schemes. For the purposes of the present note, the relevant scheme was to create accounts in fictitious name and then use those accounts for the deposit of cheques. How the current legislations adequately protect the consumers To speech these problems, a joint State and Federal Committee of Consumer Affairs Ministers prompt a Code of Conduct to be allowed by financial institutions. They were given some time to incorporate the Code into their standard EFT contracts or rather face legislation.After amendments recommended by the Trade Practices Commission in 1989, the Code was utilize along with the Australian Banking Ombudsman Scheme. The current Code is now part of ASICs scope of administration.REFERENCES 1. Restitution law By Sharon Erbacher pg. 639 2. Law 330 module 2 pg. 30-32 3. Cases and ma terials on the law of restitutionBy Andrew Burrows, Ewan McKendrick, James Edelman pg. 838 4. http//austlii. edu. au/alan/mb2. html, Mercedes Benz v ANZ and National Mutual Royal Savings Bank Ltd (Part 2), accessed on 20/08/10.