Saving and borrowing: Cracks appear in Egg's security shell

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The Independent Online
THE future of online banking suffered another scare last week when Egg admitted that it had a serious flaw in its security. The admission, which came only two weeks after the Halifax was forced to suspend temporarily its online share dealing facility, is likely to increase consumer suspicion concerning the safety of internet banking.

The security problem arose because of the "log out" button. Introduced only three weeks ago, this proved to be faulty when used on some newer versions of Netscape Navigator. The flaw enabled strangers to access credit card accounts even after customers thought they had logged out.

Nobody actually gained access but the fact that it could have happened is worrying. Egg claims that the problem has been sorted out and insists that its online banking facilities are totally secure. "We have never had any security breaches on any of the accounts of our 80,000 customers," said Pete Marsden, chief information officer. "I absolutely guarantee the security of all our customers' details."

A survey carried out by the Woolwich showed that 43 per cent of people prefer to bank through a branch, while only 8 per cent favour the internet. If the advocates of e-commerce are right in saying online banking is the way forward, they face an uphill struggle trying to persuade the consumer. One thing they cannot afford are further security breaches.

Europe to light up

Northern Light, one of the world's leading internet search engines, looks set to follow its competitor, AltaVista, and launch itself in Europe.

Two-fifths of the UK population now access the internet through home, work, school or college. This demand is resulting in an increase in choice in all aspects of cyberlife. Six thousand new websites are created every day in Britain; ISPs are constantly improving existing services; and the choices of where to search are increasing. was launched on Wednesday. Around 2.4 million Britons already use but the new address provides extra services including free consumer services and email.

Northern Light is hoping to follow suit in the first quarter of next year. A UK site is first on the agenda before expansion into other European states.

The truth about housing

A survey due to begin in the new year is likely to paint a different picture of the housing market.

The survey, which will be carried out by the Kensington Mortgage Company, is intended to produce a truer representation of house price patterns.

It is widely thought that recent surveys have delivered misleading results because of the huge increase in house prices in the South-east. Trends in the rest of the country are starkly different.

The company, which specialises in providing mortgages for people who fall outside bank and building society guidelines, expects to find declining confidence among borrowers. Recent interest rate increases and predictions about further rises cast doubts over the boom that is so widely talked about.

"We are quite concerned that the current debate doesn't accurately reflect the true state of the housing market outside the pockets of prosperity in the South-east," says Philippa Drew, the firm's marketing director. "In many regions confidence has been severely dented by interest rate rises. This is feeding through to significant job insecurity and stagnant house prices."