Help, cyberspace has stolen my money!
There have been many consumer revolutions in my lifetime. Frozen peas for one, and sliced bread for another. But perhaps the most convenient, I thought until this week, was the invention of the credit card.
Hooray. It's so multilingual, you can take it anywhere in the world. But of course there is a downside, which I quickly discovered when my son was stranded without food or drink, thousands of miles away, without even the money to buy a ticket home.
My son's a medical student, and this summer he decided to drive from California to New York before taking up a trainee student's position at a Long Island hospital.
But as he put his debit card into an ATM in Los Angeles our family's absent-minded gene struck (my brilliant father once forgot to act as best man at his brother's wedding. My aunt never forgave him).
He took the cash, but left the card behind, so the machine ate it. That's what ATM machines do, and quite right too.
No help in foreign climes
The first problem was that my son banks with Barclays, and there was no US branch to assist him. The second was that he had no other card with him. While he had money in his account, there was no way for him to reach it. He rang me in desperation – not much fun for an independent-minded, macho 29-year-old.
So, because I love the young man, I tried to get money to him. Western Union was the obvious answer. But he needed at least £500 urgently, and a Western Union clerk explained that I would have to draw out the cash from my bank and literally walk it across to the branch, passport and utility bill in hand.
Hampstead is a law-abiding leafy suburb and the only break-ins are when George Michael drives through the front window of our local Snappy Snaps. Even so, I don't much like the idea of carrying that kind of money down the high street. I thought there must be an easier way to send money around the world.
My son rang again. He had found one. He had opened a Tuxedo Travel Mastercard Account, and all I had to do was transfer the money online. I did. And in the magical way internet banking works, I saw £500 instantly evaporate from my account like morning mist in bright sunlight.
But where did it go? Every time my son tried to access it he would ring me in mounting despair. It had simply disappeared. He couldn't draw out a penny. Hundreds of pounds were lost in cyberspace.
But who to contact? Day after day I searched the internet for some kind of phone number for Tuxedo. All I could find was a website with a 'contact us' link. It showed a phone number, but only for reporting lost or stolen cards. It did offer an email, with a 24-hour response time – I sent one off but still nothing.
My son rang me in despair, out of food and unable to even buy a beer. Now, as I mentioned in my last column, what you need at this point is a human being. Someone to tell the tale to. Someone to find my blooming money.
I finally spotted a reference, in tiny print at the foot of Tuxedo's homepage, to the Newcastle Building Society. That sounded like a real place. And it turned out to have a real address and a phone number answered by real human beings.
A sweet man called Jack told me he would pop round to Tuxedo's compliance department.
He then rang back and said its compliance people had not liked the name of my son's account, and therefore had held my money in cyberspace like ectoplasm. Jack reached out, grabbed it, and shoved it into my son's account. My son could suddenly eat again.
Now, Mastercard and Tuxedo, this won't do. If you provide a service, you must also provide customer service, and that means a real, live, thinking, breathing person who can discover stupid glitches and put them right, fast.
I understand money-laundering fears, but please, if someone in compliance gets suspicious about the fact that a pre-paid card account is named Capone, ring and ask some questions – even if it's just for the name of their pet dog.
And maybe we should have a new law, that for every website there has to be a panic button – just in case there's a medical student out there, starving, while his mother's emergency money has turned into ectoplasm.
Issued by a bank as part of a current account and, in a nutshell, serves as electronic cash. Unlike a credit or charge card, where you get an interest-free period before you have to settle the bill, the funds spent on a debit card are withdrawn immediately from your current account. Unless you’ve arranged an overdraft, if you don’t have the cash in the account, you can’t spend it.
Used by the holder to buy goods and services, credit cards also have a monthly or annual spending limit, which may be raised or lowered depending on the creditworthiness of the cardholder. But unlike charge cards, borrowers aren’t forced to pay the balance off in full every month and, as long as they make a stated minimum payment, can carry a balance from one month to the next, generating compound interest. As the issuing company is effectively giving you a short-term loan, most credit cards have variable and relatively high interest rates. Allowing the interest to compound for too long may result in dire financial straits.
This is a mutual organisation owned by its members and not by shareholders. These societies offer a range of financial services but have historically concentrated on taking deposits from savers and lending the money to borrowers as mortgages, hence the name. In the mid-1990s many societies “demutualised” and became banks. One academic study (Heffernan, 2003) found demutualised societies’ pricing on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. In 1900, there were 2,286 building societies in the UK; in 2011, there are just 51.