A friend of mine told me that his mortgage was transferred to a different servicer and that the new servicer claimed that he was behind on payments. He was able to show that the new servicer was wrong with paper statements.
Does this mean that paperless statements aren't worth it and would put one at risk?
No it does not incur additional risk. You can print or save all of your paperless statements in a folder if you are worried about this.
He was able to show that the new servicer was wrong with paper statements.
In theory he would have been able to show that with virtual statements as well. At the time of statement issue, a paper or virtual statement should be identical.
That being said, if a statement was ever discovered to have an error on it, if you were mailed, or emailed a statement already, then a new corrected statement would need to be mailed, or emailed. Nowadays it's common for virtual statements to no longer be included as an attachment to an email- instead it is just a link that you can access by logging into your account. Since the bank can know if you've logged in to view your statement yet, and if you haven't, they could theoretically change the statement without you knowing about it. Generally, this shouldn't be a problem since presumably they'd be fixing something, but if you're the type of person that has trust issues with your bank and wants to know about this sort of thing, there could be a small benefit to receiving paper (or emailed if they offer it) statements, otherwise you need to login diligently to download your statement as soon as it's available.
Side Note: I recall one time for a mortgage refi where I had to provide the last couple of mortgage statements. I didn't have the latest one in paper format so I downloaded a PDF version, and was surprised that the downloaded format looked different than the version I received in the mail. (Usually this isn't the case.) It had the same information on it, but it was in a completely different layout. I can't say if one is better than the other, but the fact that they look different made me wonder if anything else might be different too, such as a number. (Yet nothing else was different.)
I am very skeptical about "paperless" banking. I understand why banks want it, but the advantages all seem to be for the bank not the customer.
You should always keep records of your finances. You might need those records in the case of a dispute. You might also need them for other reasons, such as applying for visa's to travel (though granted this is more of an issue for people who live in poor countries), filling in a tax return, or convincing someone that you are not engaging in money laundering when you move money around to make a big purchase such as a house.
Trusting the counterparty to keep those records seems like folly to me. It's unlikely that a bank will deliberately falsify the records, but it is far more likely that they could become difficult to access due to some reorganisation. Or you will have a problem logging in and they will ask you for information about past transactions as part of their process to verify your identity.
With paper statements the company sends you a statement, it sits in your pile of mail until you get around to filing it. If the company gets bought out or re-designs their website you still have that paper.
If financial institutions would send statements by e-mail I wouldn't mind so much, since I control the achiving of that e-mail, but most financial institutions nowadays consider e-mail to be insecure. So they put the messages in a secure inbox that is locked behind the online banking login.
Yes, you could diligently log into online banking and save or print copies of the statements each month, but life happens. Will you really be diligent about doing that every month?
