New Zealand's top online banking mistakes and how to avoid them
Online banking is now at the heart of most New Zealanders' financial lives. Every day we make more than 6 million payments worth a total of more than $35 billion.
You set up your bill payments online so they are whipped out of your account at the right time, you pay for your Trade Me purchases with a quick online transfer and you check your balances regularly.
But what happens when something goes wrong? We asked the banks about some common internet banking mistakes.
Getting the account number wrong on an internet banking payment
This is the number one fear of many an online shopper. If you get the account number wrong when you are trying to deposit funds, can you get the money back?
You can – but you rely heavily on the goodwill of the person who received the money.
READ MORE: Where do bank payment go overnight?
Banks cannot go into customers' accounts and reverse transactions without their permission. If the money has gone into someone else's account, their bank will need to get the okay from them before they give it back.
The Bankers' Association said that meant it was vital that people checked the details when they were paying online payments.
"If you get the account number wrong, and you accidentally pay someone else, you should contact your bank as soon as possible," a spokeswoman said.
"Your bank can then ask the recipient bank to ask their customer to return the money they received by mistake. Most people who receive payments in error return the money. Failure to do may be unlawful and they may face prosecution."
Bu they can refuse to return the money if they deem the funds were meant for them.
In one case dealt with by the Banking Ombudsman, a business paid $4000 to the wrong bank account, when it was trying to pay an invoice.
The mistake was not picked up until about a month later, when the firm received another invoice with an overdue amount. The bank said that it could not reverse the mistaken transaction, as too much time had passed. It requested a return of the funds from the bank of the account-holder who received the money, but he refused.
The bank said it was not responsible for the error, as under the terms and conditions for use of the system, customers were responsible for any loss caused by errors on their part when entering account information. The Ombudsman backed the bank.
Receiving money you weren't meant to, and spending it
You will usually need to repay it, unless you can say you reasonably believed the money was owed to you, you did not act fraudulently or recklessly when the money turned up and it would be unfair to have to repay it, given your situation.
Making a payment to the wrong credit card
It is common to have a "back-up" credit card that you only use in emergencies. But what happens if you put the payment meant for your day-to-day credit card, on to that back-up card, sending it into credit?
Sometimes, banks will count any attempt to transfer the payment back off as a "cash advance" and start charging interest on the transaction immediately.
The Bankers Association said customers should get in touch with their banks in that situation to discuss their next steps. Sometimes the banks will waive the charge.
Realising you've made a mistake after the payment has left your account but before it turns up in the recipient account
Tough, basically. The fact it hasn't yet turned up won't help.
When you set up a payment you are authorising that transaction. Your responsibility as an account holder is to check the details you have are correct, and to correctly enter them if you are making a payment or transfer.
Once a payment is made it can't be stopped or reversed.
In another case heard by the Banking Ombudsman, a customer gave his Visa debit card details to a company to take a $200 deposit.
He then found $3200 had been withdrawn and contacted the merchant to ask for the funds be returned. The merchant said he would first need to validate his account and sent him several forms, one of which authorised the previous transactions. He completed and returned the forms but the merchant did not return the funds and subsequently ceased all contact with him.
He realised he had been scammed and contacted his bank to dispute the transactions. The funds had not yet been paid to the merchant and were being held in a pending state. The bank attempted to charge back the transactions because they were unauthorised but the merchant disputed this and provided the authorisation forms that had been signed. The bank could not continue the dispute and the payment to the merchant went through.
The Ombudsman said once a transaction had been authorised it could not be withdrawn, even if it had not been finalised.
Checking your balances over public wi-fi
With everyone from McDonalds to the hairdresser offering free wi-fi, it can be easy to forget that you need to be a bit more cautious with what you do on a public network.
If you have to, make sure you know who is providing the wi-fi, that it is encrypted and needs a password to log on to, and the business is staffed by employees you trust.
Do not use public computers such as those in a library to check your online banking - you never know what sort of key-logging software might have been loaded to track your login details.
If you are the genuine victim of fraud, talk to your bank. It may be able to reimburse you, depending on the circumstances.