SUBJECT : LAW 330: FINANCE LAW -------------------------------------------------
TABLE OF CONTENTS
Problems with e-banking3-4
The relevant statutes and cases 5
How the current legislations adequately 6
protect the consumers
Analyse with relevant statutes and cases the problems with electronic banking
and how the current legislations adequately protect the consumers
overcoming these problems.
The following are the problems with e-banking:
1. Time of payment:
The opportunity for a customer to countermand or stop electronic payment is unclear. If the transfer is effective before the countermand is received, then the paying institution will have paid in accord with its mandate and is not liable to reverse or restore payment to the customer. Cheques are only paid or effective once cleared, and the paying bank holds records of the appropriate debit, however with EFT there are 5 possible times of payment: a. The time of transmission.
b. The entering of the transfer instruction into the transfer system. c. The time of receipt of the transfer instruction by the paying institution. d. The time when the recipient financial institution decides to accept the payment. e. The time when the recipient financial institution credits the sum to the account of its customer. 2. Malfunctions:
ADIs accept liability for direct loss if there is a malfunction in the system. In the case where an electronic malfunction resulted in non-payment of an amount of money due under a charter party agreement, such that one of the parties lost the benefit of a ship charter, resulting in the loss of millions of dollars, it may result to indirect or consequential loss. The Uniform Commercial Code, in the USA, prohibits recovery of consequential damages from a recipient bank for...