COMBATTING FRAUD: Online banking can utterly change how we conduct our banking business, says Raymond Oko?ski
Using a computer to access your bank account online has been with us for over 15 years. AIB takes the credit for offering subscribers of Telecom Eireann's Minitel service access their business or private bank accounts. The range of services available back then were quite restricted, but it was possible to check your balance, review a list of transaction since your last printed statement, and the opportunity to make bill payments or administer standing orders.
Bank of Ireland chose to wait and develop their system for personal computer users, but at that time PCs and Minitel terminals were few and far between.
By the mid-1990s computers quickly became affordable, and the prospect of conducting a proportion of your banking business securely online became a reality. However, a PC isn't exactly portable, and for those times when it might be useful to check your account or credit card balance online, the mobile phone was seen as a way of updating those telephone banking services of old.
As the new generation of digital (GSM) phones had a capability of receiving and sending text messages, it was a relatively easy matter to send account balances directly to the authorised phone, and these basic services were subsequently enhanced with the arrival of WAP (Wireless Application Protocol) handsets in autumn 2000.
WAP banking services gave a near-Internet experience; customers could access their accounts, and drill down to individual transactions to get the same information that would eventually appear on their statements, but up to 30 days in advance of the printed copy.
It was also possible to transfer funds between accounts, check to see if a credit card debit had gone through, order up a new chequebook or statement and - inevitably - check what your available balance was.
Account holders had never had it so good, and with the ability to pay for goods and services directly using a mobile phone or PC, a conflict of interest emerged with the direct debit system. It was now easier for customers to transfer their own money as and when required electronically.
There is a rising resentment against this system, as account holders effectively give third parties unfettered access to remove funds accounts, with only a promise to repay should an amount be taken in error (but not the costs of resolving subsequent issues of other debits failing because your entire credit balance disappeared for nearly three weeks).
Those attempting to use a "Direct Credit" system, paying their bills electronically and not giving the supplier an option of access, is being thwarted with excuses ranging from IT systems not being capable of accepting funds (!), to punitive monthly charges being added effectively to "fine" customers for not falling in line.
Until the Government enacts a Bill to protect consumers from this practice - by making it immaterial who initiates the funds transfer - Irish consumers will not see any advantage in controlling their own financial affairs, a worrying trend if proved true.
For smaller payments, a variety of so-called "micro payment" systems have been launched, with Vodafone customers access the proprietary m-pay service, paying for ringtones, video clips of goals or other value-added services.
Designed to allow low value items to be bought easily, with the cost being added to a monthly Vodafone bill (or deducted from the available Ready to Go cash balance in the case of pre-pay customers).
Using a mobile phone is now the key to unlock many value-added services; it may soon be possible to book and pay for cinema or concert tickets, turn up at the venue and use the phone to get the venue's ticket machine to print off your admission tickets - in exactly the same way mPARK issues parking tickets from Dublin's Pay & Display machines.
It is estimated that within three years, the last thing you would do with your mobile phone is speak to someone on it. Data services, text messaging, picture taking, micro payments for parking, theatre and even buying your daily newspaper will become the new hard currency, and save you carrying a pocket or purse-full of notes and coins.
The downside is that nobody has highlighted what will happen to the hapless consumer who loses their phone . . . or has it turned off for lack of credit or non-payment of their monthly mobile bill?
The circular argument that you cannot pay your bills because the mobile phone company turned your handset off may become a reality a lot sooner than you think!
Credit card fraud is an issue that affects everyone - our financial institutions claim to have done all in their power by adding security measures, such as additional verification codes on the signature strip (making it virtually impossible to use the signature strip for its intended purpose) or a tasteful photograph of the cardholder etched on the reverse.
This security may be of assistance when the card is physically handed over to make a purchase, but it all falls apart if the retailer fails to check, or indeed "skims" the card's magnetic strip to enable a duplicate to be made. As the number of "customer not present" transactions increase, physical protection elements contained in the credit card itself become increasingly irrelevant, as the only information required for internet selling is the card number and expiry date.
Unscrupulous individuals have been known to attack vulnerable internet sites to collect lists of customer data, along with their credit card details. Called "harvesting", these card numbers are used to generate false debits and are often successful until cardholders complain of phantom debits.
To combat this type of fraud, AIB signed up to an innovative service developed by a US firm called Orbiscom. The O-card service, which has been branded by AIB as "TransactOnline", allows cardholders to make purchases online without having to provide details from their AIB-issued card, or have these details passed over the internet.It works by generating a new card number each time the cardholder makes a purchase - this number is valid for ONE debit attempt only.
The icing on the cake is that the cardholder can also specify a self-imposed limit on each transaction, which would prevent the retailer taking more than the agreed amount.
The customer uses a secure internet connection to download the O-card software which resides on his or her PC until it's needed to make a purchase. When this happens, the software asks for a "virtual" card number. This is then generated and displayed on the screen, complete with start and end dates, and a security code.
This is also the stage where a maximum limit for the transaction can be set. You then pass the details of this virtual card by phone or e-mail to the retailer. Once the debit has been taken, the virtual card number is of no further use and can be discarded. When the purchase is processed by AIB, it cross-references the generated number to the actual number of your account. The debit is then applied to your monthly statement as normal.
Having used the service extensively over the past six months, I have been amazed at the number of times a vendor has called to say there was a "problem with the card" when in reality they were actually doing something they shouldn't - taking more than the agreed amount or trying to take the payment twice for the same order.
The system does involve the cardholder in a little extra work, but the satisfaction that you are no longer a victim of retailers - and criminals - helping themselves to your line of credit. AIB's TransactOnline is the only way to use your plastic online.
ONLINE BANKING SERVICES:
Bank of Ireland's Banking 365 Online -1890 365 365
AIB's 24-Hour Online - 1890 242 424
Permanent TSB - 1850 500 121
Ulster Bank Anytime - 1800 424 446
