Bank phishing cases are commonplace. Will we be financially secure if our bank accounts are emptied? NO!

Unfortunately, it is clear that victims of bank fraud are completely at the mercy of banking institutions as they attempt to recover or compensate for monetary losses and financial problems they have suffered in unauthorized transactions.

Let’s take the current case of the National Bank, where dozens of SME owners have had their accounts emptied after a new wave of phishing. Without media pressure, it is not certain whether the victims of the National Bank fraud would have won their case so “quickly” by getting the stolen money returned. The refund was made at the discretion of the bank.

Since Canadian banks are under the supervision of the federal agency, the Office of the Superintendent of Financial Institutions (OSFI), I asked OSFI three questions:

• Are our deposits with Canadian banks protected from bank fraud?
• Or is there some kind of insurance against bank fraud?
• Are banks obliged to compensate us if we fall victim to bank fraud?

OSFI ANSWER

Responsible for monitoring and rapid intervention to support the stability of Canada’s financial system, OSFI ultimately has no say in protecting victims of bank fraud, particularly whether or not banks should compensate their customers for victims.

In response to my three questions, OSFI’s media department simply referred me to the two other federal agencies that deal with banking services, SADC Deposit Insurance and the Financial Consumer Agency of Canada.

SADC RESPONSE

It is important to note that the deposit insurance provided by the Canada Deposit Insurance Corporation (SADC) or its counterpart in Quebec, the Autorité des marchés financiers (AMF), does not apply in the event of bank fraud. The SADC or the AMF only protects us in the event of the bank or credit union going bankrupt. So there is nothing to do on the SACD side as bank fraud is not touched.

RESPONSE FROM THE CONSUMER AGENCY

For its part, the Financial Consumer Agency of Canada is responsible for protecting the rights and interests of consumers of financial products and services.

When it comes to bank account fraud, the Consumer Protection Agency does not protect consumers. Last point.

The agency applies the “zero liability” policy only in the case of unauthorized credit and debit card transactions.

“Visa, Mastercard, American Express and Interac are committed to protecting consumers from financial loss. This applies in the event of unauthorized use of your credit or debit card,” explains the agency’s media relations department.

CLEAR ANSWER FROM THE AUTHORITY

The banking sector is subject to federal jurisdiction. Although Canadian banks, with the exception of the Desjardins funds, do not fall under the jurisdiction of the Autorité des marchés financiers du Québec, the Quebec organization has knowledge of financial products and services issues.

“First, to your specific question about bank fraud, there is no Canadian organization whose specific mandate is to protect customers who fall victim to fraud on their bank accounts,” replied Sylvain Théberge, director of media relations at the Financial Markets Authority.

If you become a victim of bank account fraud, here’s what to do, according to the agency.

1. Contact the relevant banking institution to inform them of the situation. Checks are carried out to understand what happened and a solution is usually found.
2. As a victim of such a scam, you should also contact both credit bureaus (Equifax and TransUnion) so that a warning can be placed on your file.
3. If you are dissatisfied with your financial institution’s response, you can lodge a complaint with the Banking Services and Investment Ombudsman or the Banking Services Office.
4. In the event of dissatisfaction with the handling of a complaint related to fraud involving Desjardins funds, the Authority offers support and mediation services.

RECOMMENDATION

It makes no sense that the Canadian banking system has not provided a “zero liability” policy for customers who fall victim to fraud on their bank accounts.

When a country like Canada boasts of having one of the most financially sound banking systems in the world, I believe it is the least capable of protecting its customers from bank fraud.

If Justin Trudeau’s government really wants to do useful work for the millions of customers of our banking institutions, it should implement a “zero liability” policy on bank fraud as quickly as possible.