I want a bank account with ‘Pots’ but are the online-only banks secure?!

alexl102

I want to open a bank account which has ‘pots’ that I can use to help myself budget.

As far as I can see, the only banks that do it are TSB, Virgin, Starling and Monzo.

Starling and Monzo get loads of recommendations online, but a friend who previously worked in fraud at another bank said they saw disproportionately high levels of fraud through the online-only banks compared to the traditional banks, so I’m really reluctant to open an account with them and start putting the majority of my wage in there . I haven’t heard great things about Virgin or TSB either.

Can anyone reassure me? Am I just old-fashioned or are there legitimate risks?

thanks!

flaneurs_lobster

NatWest/RBS now have "Pots" too.

Personally I would have no qualms about using any regulated, authorised bank to hold my money.

Unless you are grossly negligent with your passwords or cards or devices you will always get any monies stolen back.

Don't know where you are seeing these negative reviews, quite often the review sites tend to only reflect people's negative experiences - how many people leave a positive review on Trustpilot because Virgin Money paid a direct debit to their window cleaner on time?

Ayr_Rage

The online banks are just as safe as anywhere else as long as you don't do anything daft yourself.

Watch a few episodes of Scam Interceptors on the BBC and see what not to do.

horsewithnoname

I’ve used Zopa for a while without any issues. Good app, easy to use and have decent interest rates. I’d recommend them.
They do “pots” as well.

born_again

a friend who previously worked in fraud at another bank said they saw disproportionately high levels of fraud through the online-only banks compared to the traditional banks, 

Depends on exactly what type of fraud. End of the day a lot of fraud is down to end user falling for phishing.

Rob5342

I use Monzo as my main account and I don't have any concerns about security. You can set it so that transfers over an amount of your choosing need an extra check, which can be the app checking that you are at your home address.

mta999

Lloyds allow you to open as many instant access savings accounts as you wish which they say you can use as 'pots'

masonic

Someone "who previously worked in fraud at another bank" would be referring to their own traditional bank's customers being defrauded by having their money transferred to accounts with the online banks. That suggests fraudsters are more easily able to operate accounts with some of the online only banks.

There are a few online banks that have been in hot water for this:

https://www.fca.org.uk/news/press-releases/fca-fines-monzo-21m-failings-financial-crime-controls

https://amlwatcher.com/news/lithuania-fines-uk-fintech-revolut-a-record-fine-of-e3-5-million-for-aml-failings/

https://www.fca.org.uk/news/press-releases/fca-fines-starling-bank-failings-financial-crime-systems-and-controls

What it doesn't mean is that you are at greater risk of being a victim if you also hold an account with one of these online banks. The reality is that your friend has given you evidence that traditional banks were vulnerable to this fraud, based on the disproportionate cases observed. The reason for that is the customer is responsible for falling victim to the fraud, not their bank. Traditional banks may have a disproportionate number of customers who are old fashioned and trusting of scenarios and situations currently used by fraudsters to part them from their money.

Rob5342

https://forums.moneysavingexpert.com/discussion/comment/81993357#Comment_81993357

The best thing about Monzo and Starling pots and spaces is that you can set direct debits to come out of a particular pot. I have all my bills direct debits set to come out of my bills pot so when I get paid I put the money to cover the month's bills into that pot and then forget about it. The savings accounts 'pots' that the old fashioned banks offer are nowhere near as flexible.

mta999

Yes agreed you have to transfer money from the savings account pot to your current account if you want to use it

confederated

Some of the new online-only banks have no effective customer support at the weekend or on weekday evenings. Sometimes things can go wrong through no fault of your own, or maybe you're worried that you might have done something silly - but not to be able to talk to your bank outside office hours is completely unacceptable in this day and age. Triodos is a case in point, and LHV has no phone number at all to call for help. I love opening bank accounts, and I am drawn to the new fintechs, but I have learnt my lesson and if I were to open a new account, customer support would the first thing I take into consideration. If I can't talk to them when it suits me it's a big, fat NO.

Fraudsters are often aware that with certain banks, at certain times, you will be unable to call your bank to verify the status of a potentially fraudulent call. For youngsters who know everything and are very self-confident I often hear 'It will never happen to me' . . .