Again, I am doing my banking security study recently. Anyway, I like to share some info I knew.This is from Brian.
When electronic banking was being introduced into the UK by the US banks, separate documentation for the use of those services was fairly straightforward — in some cases nonexistent, and in others very simple, covering one or two pages. The treasurers who were offered such contracts, after referring them to their own lawyers, signed them quickly, and since then have resisted attempts by their banks to replace them with anything more detailed.
When the UK clearing banks started to introduce their own electronic banking systems, the contracts which they tried to get their corporate customers to sign mushroomed. The corporate reaction fell into two categories — some companies just signed anything the banks sent to them, the others referred the contract to their in-house or external lawyers. The second response sometimes results in situations close to paralysis, with the company trying to chip away at the original agreement and the bank giving way here and there, but, generally, a long and detailed contract is retained.
The reason for such detailed documentation is that, to date, there is no legislation that specifically addresses electronic payments, nor is there any case law addressing any electronic banking issues which have needed to be clarified or resolved. The fact that, after more than ten years of electronic banking, there is no pressure for legislation suggests that the contracts between the banks and their customers have covered most of the likely areas of dispute. However, this does not necessarily mean that either side is completely satisfied.
The problem with the contracts offered by the UK clearing banks has been that they seem to have been trying to undermine the legal position covering banking practice which renders a bank liable if it pays a cheque with a forged signature, even if the forgery cannot be spotted. Although this is not unreasonable from the banks‘ point of view, it appears to be more of an attempt to rewrite their responsibilities indirectly rather than raise an out of date principle with their customers, a move which would be likely to result in vehement opposition. The outcome has been that some companies have been reluctant to forego the protection provided by the traditional legislation, and, perhaps, have seen the new contracts as an excuse not to use electronic banking.
The position taken by the banks is that this is a completely separate ‘medium’, with a different kind of transaction, using an authorization code (the electronic signature) which they can check for correctness but not for forgery. As a result, this redefinition of the responsibilities for electronic payments is one of the issues which is common to all of the UK clearing banks‘ documentation. It can be expected to remain while major corporate customers decide not to challenge it because of the possible damage to their overall relationship with their banks over an issue which they can manage in other ways.
Although the overall approach to documentation by the banks has been broadly similar, with several common themes, specific details do vary.
