Cahoot banking insists the site is safe

The head of online bank Cahoot has insisted that there was no risk of financial loss to customers during a recent fault in the system that allowed access to accounts without a password.

Tim Sawyer's comments follow a BBC investigation, which revealed that Cahoot banking customers who had accessed their own accounts online could then theoretically access other people's accounts without going through the usual security procedure.

Mr Sawyer stressed that they would have had to know the unique user ID of the other customer, or to have made very lucky guess, in order for the flaw to be exploited.

Cahoot's website was closed down for ten hours yesterday while the problem was rectified.

Mr Sawyer told BBC One's 'Breakfast': "This is a serious matter, but what I should stress is that for someone to get access to another Cahoot banking customer's account they would need for that customer to have given them their confidential security ID."

And he added that even in that eventuality "at no point could a potential fraudster have done any financial transactions at all".

He stated that the flaw had probably been introduced into the system at a 'regular update' 12 days ago.