robin1234

This is true. The Isle of Man Depositor's Compensation Scheme sounds OK on the surface (it was recently beefed up in the context of the financial crisis and the failure of one of the major IoM banks) but apparently it is completely unfunded & it is likely a depositor would have to wait several decades before getting all the cash back in annual installments.

chartreuse

All of these schemes are unfunded. It's an exercise in smoke and mirrors, with the taxpayer left at the sharp end.

Giantaxe

The US FDIC is funded but could well have to turn to Congress for more funding if there's a glut of big bank failures. But think of it this way, would you rather rely on a very small number of, say, I of Man taxpayers, or a rather larger number of UK taxpayers? I don't see how the former could meaningfully fund a deposit scheme. It's the Iceland scenario, except many times worse.

robin1234

I agree - I believe the IoM scheme is funded by each bank that operates there agreeing to a levy of XX pounds per year. I don't know what the amount of the levy is, but it's limited. Depositors at KSF, the Icelandic bank in the Isle of Man that is in receivership, are talking about get reimbursed over 20-50 years which is a bit rich if you already 80 years old.

chartreuse

Fair comment and, in truth, I have to agree. I was lucky re the Iceland thing, in that I woke up one morning with a bad feeling about the country and got my money out the day before it went tits up.

chartreuse

Not half! I just got telephoned by a Lloyds TSB computer.
Apparently they're freaking out that SWMBO, an American, is using her card in America! But they can't talk to me about it.

Fair play to the girl I got through to when I called back, though. She grasped the concept of time zones and will call the wife at 14:00 UK, 08:00 Central.

dunroving

On a side-note, just a heads up that two of my banks (Barclays and Smile) have moved to a PINSentry system for online banking. I can no longer just log in online and use the usual account ID, password, memorable words, etc. They sent me a card reader (a mini version of what you use at the shops in the UK).

Now, every time I want to check my account, I have to enter my card number online, put my card in the card reader, enter my PIN, and then I get sent (on the card reader) a one-time password/8-digit number. I then enter this number online and I get to my account.

I guess it's maybe more secure than thye old system but it's a right royal PIA. I raise the issue because I don't know if the card reader would work in other countries ... (e.g., is it accessing a UK-only wireless network?)

Dan725

No, it'd work fine overseas - the reader isnt accessing any network. Basicially what it does is make sures that the chip on your card matches your PIN - it then generates a one time code which you enter to verify. The machines in restaraunts do the same thing, but they send the code off - wheras you are doing that piece yourself (entering it in when prompted).

But I agree with you, what a PITA it is, carrying that stupid looking calculator type thing around with you. Completely inconvenient if you want to check your balance when out and have left it at home.

notacrime

RBS have that card reader thing. They only make you use it if you are setting up a standing order or wire though. Just checking balance, seeing statement, transferring between your own accounts is all done with regular username / password.

Did the OP come up with a solution?

chartreuse

Worse than that. A mugger could make you tell him your PIN and use it to make sure you hadn't lied. All from the safety of a dark alleyway...

sime303

Yep I had to use a visit back home a couple of years ago to setup my internet banking with LTSB. They just wouldn't except anything other than me sitting in the branch on the other side of the desk.

dunroving

Mine (Barclays) requires me to use the card reader for any online access (including just checking my accounts).

From the supporting documentation, it says if I am ever without it I can either (a) use the card reader of a friend I trust (huh?), or (b) call Barclays and I will be given 13 days access the old way (sign in, password, etc.), but not the ability to set up a payment, etc., just to see my account online. Of course, if I ever am without my card reader, I will probably by then have completely forgotten my old password.

Definitely an unmitigated PITA.

robin1234

Our son, in London, just told us that his bank - the Co-Op - is introducing the card reader and are sending him his. Being a 24 year old, his attitude to hand-held devices is - the more the merrier.

notacrime

Geek note.

Card readers are a 'technical factor' for authentication. By combining them with a 'personal factor' such as a password or PIN the bank is able to drastically increase the security of their online system. Those keyring widgets that display a different 6-digit code every minute are another example of a technical factor.

There's a decent description here:

http://en.wikipedia.org/wiki/Two-factor_authentication

chartreuse

Perhaps, for a given value of "security" But it would be a mistake to think that banks are up all night worrying about security or fraud. What they care about (other than profits) is risk. And the name of the game is risk transfer. And when you look at the small print that comes with these shiny gadgets, often the risk is transferred to you.

A very good example of that is Chip and PIN in the UK. Yes, it has reduced the volume of Card Present fraud. But the volume of Card Not Present fraud has increased by a greater amount. However, the cost of CNP fraud is borne by the merchant or the customer, not the bank. So, while the overall amount of fraud has increased, the banks' exposure has decreased.

Chip and PIN is a very effective technology, doing exactly what it was designed to do. It's just that most people are led to believe that it was designed to do something different.