The Consumer Council warns that banks may not reimburse customers money lost in an Internet banking system breakdown.

A council survey found that nine out of 17 banks would adopt a "case-by-case" approach, and would not commit to compensation. Eight banks declined any liability for monetary loss.

The survey also looked at the chances of consumers obtaining compensation if they accidentally logged in to a fraudulent website. Nine banks said they would consider redress on a "case-by-case" basis while five would assume liability only if the loss was caused by gross negligence. Three declined any liability.

The council also found that nearly all banks commonly use and rely on exemption clauses to partly or fully exclude their liability and responsibility. It called on banks to inform customers that exemption clauses are subject to control, and may or may not be valid under the law.

The Control of Exemption Clauses Ordinance stipulates that: "In the case of loss and damage other than death or personal injury, a person (a legal entity) cannot exclude or restrict his liability for negligence by reference to any contract term or notice except insofar as the term or notice satisfies the requirement of reasonableness."

Even though a contract consisting of exemption clauses has been signed, the consumer should still be able to hold the bank liable for the loss arising out of negligence in applicable circumstances, the council said.