Pub. 6 2011-2012 Issue 6

www.nebankers.org 18 Extraordinary Service for Extraordinary Members. SECURITY OFFICER’S BY-WORD H OWEVER, MANY CUSTOMERS want to be able to use Inter- net banking to transfer funds between any accounts they own—even if not all of the owners of the account are identical. Most Internet banking providers allow banks the ability to link accounts to a single user ID and password so that the bank can give a customer access to the various accounts he or she owns. However, at least one major Internet banking provider requires all owners of an account to use the same user ID and password. All owners of the main account then have access to all linked accounts, even if some of the owners of the main account are not owners of the linked accounts. This has resulted in serious problems. A husband and wife had a joint checking account. The wife also had a savings account at the same bank that named only her as the owner. The bank’s Internet processor only allowed one user ID and password to access any account. The wife applied for Internet banking and requested that she have access to both the joint account and her personal account for the purpose of In- ternet banking. Later, the husband ap- plied for Internet banking on the joint account and was given the same user ID and password because the Internet processor required only one user ID for any account. The couple happily used Internet banking under this arrange- ment for more than five years. One day the husband used Internet banking to transfer all the funds from his wife’s savings account to the joint checking account and withdrew the funds. He then moved in with his new girlfriend. The wife was unable to obtain the funds during their divorce proceedings, so she claimed the bank was liable to her for the stolen funds. At another bank, a savings account was opened in the name of a young child who had received a large settle- ment after his mother was killed in a vehicle accident. His father was named custodian on the account. The father remarried and had a joint checking account with his new wife. Both were given the same user ID and password for Internet banking. At the request of the father, the son’s account was added to the Internet banking function. Because the bank’s Internet processor insisted that only one user ID and pass- word could be used to access the joint account, the new wife also was given access to both accounts even though she was a signer on only one account. The wife transferred the funds from the custodial account to the joint account and then withdrew all funds from the joint account and moved to another country. The father, on behalf of his minor son, made claim against the bank for the stolen funds. The Internet processor told bank management they could not allowmul- tiple user IDs to access any one account in the Internet banking function. Bank management wanted to allow multiple owners of accounts to access the accounts using Internet banking. Bank management had three choices: 1) The bank could restrict access to In- ternet banking to only accounts where Internet Banking Access Charles M. Towle, Senior Vice President, Kansas Bankers Surety Co. In an ideal situation, every bank would allow Internet banking transfers between accounts only if all owners of the accounts are identical.