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CBC article: Retiree out $300K after Canada Post loses inheritance cheque sent by registered mail
September 22, 2023
2:07 pm
davidgeorge
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https://www.cbc.ca/news/canada/toronto/inheritance-300k-lost-canada-post-certified-cheque-1.6973897

Louis Kavaratzis says his retirement plans are ruined after Canada Post misplaced a piece of registered mail that contained a certified cheque for $301,560 — money left for him in his late father's will.

His brother, George Kavaratzis, sent the cheque from their father's estate through registered mail from Campbellford, Ont., to Louis in Ayer's Cliff, Que., on July 25.

But the cheque has seemingly vanished and the brothers have spent every day since trying to track it down with Canada Post, and to get TD Bank to stop or otherwise flag it and issue a new one. However, they say neither institution has offered much help.

"It was going to greatly benefit my retirement. I wanted to invest it," Louis, 57, said of his lost inheritance. "My dreams are dashed of that ever happening."

"The emotional upheaval that is just eating away at me on a minute-by-minute basis; you can't stop thinking about it."

After CBC Toronto contacted TD this week, it offered to issue a new cheque with the condition George sign an indemnity agreement, which means he would be held liable for the money if the original cheque is ever found and cashed by someone else.

A man in a blue shirt sits at a kitchen island with documents in front of him.
His brother, George Kavaratzis, says he's been extremely frustrated with Canada Post after spending weeks trying to track down the missing envelope he sent through registered mail. (Chris Langenzarde/CBC)
George says he declined, and instead offered to sign an agreement that says he'd be liable for $150,000. He says he isn't comfortable with the risk of having to repay the full amount. He also says he's done nothing wrong so shouldn't be the one on the hook.

"For the rest of my life I'm going to be looking over my shoulder; Is this the year they're going to cash it?" he said.

Canada Post apologizes, investigates
Canada Post didn't answer a list of questions from CBC News, but apologized to the brothers in a statement for the "unfortunate and frustrating delivery experience."

Spokesperson Janick Cormier said the Crown corporation still hasn't been able to find the envelope.

"We understand the concerns they raised with respect to how this important delivery was handled and we are investigating," Cormier said in an email.

"When this issue was first raised, we conducted a thorough search of our facilities and we continue to monitor our operations for the item."

Canada Post has not offered the brothers any compensation.

Lost within hours
George chose to send the cheque through registered mail because it provides confirmation Canada Post received the item and proof of delivery by requiring a signature by the recipient.

"You'd think it would be safe," George said.

Canada Post's website estimates it takes four business days for registered mail to cross the country. When CBC News checked the tracking number assigned to the Kavaratzis item, it shows it took nearly double the time.

The envelope went some 40 kilometres from Campbellford to Peterborough, then was re-routed back and forth between Peterborough and Toronto twice, due to processing errors, before finally arriving in Ayer's Cliff on Aug. 3.

A Canada Post registered mail receipt sits on a table.
The Canada Post registered mail receipt George received after sending the certified cheque. CBC News blurred out personal information on the receipt. (Angelina King/CBC)
Based on the tracking information, a notice card was left in Louis's mailbox at the post office on that day at 8:25 a.m., alerting him to pick up the envelope. But when he went to retrieve it, he says a staff member told him they remember handling the item, but couldn't find it.

"I was just in astonishment," Louis said. "How do you lose a piece of registered mail within two hours?"

In the village of Ayer's Cliff — nearly 150 kilometres southeast of Montreal — mail is delivered to residents' mailboxes located inside the local post office. That means if the envelope arrived at the post office when it said, it shouldn't have left the building before Louis went to pick it up a couple of hours later.

He says he went back to the post office several times, but the envelope didn't turn up.

On Aug. 8 at 1:47 p.m., the online tracking tool indicated the item was still in Ayer's Cliff and said: "Final Notice; Item will be returned to sender if not collected within 10 days."

But, under that same date and time stamp, it shows the item was delivered and signed for in Campbellford. A document shows George's signature on that date, but George is adamant he didn't sign for, or receive, the item.

He says staff at the Campbellford post office told him his signature was scanned by mistake.

"It was never picked up. It was never there," George said. "Nobody knows where it is."

The Canada Post office building is shown in Ayer's Cliff, Que.
In Ayer's Cliff, Que., mail is delivered to residents' mailboxes located inside the Canada Post office. Louis got a notice in his mailbox that he had registered mail to retrieve, but says when he went to the counter to pick it up, it was missing. (Charles Contant/CBC)
Can't stop payment
While the brothers blame Canada Post for losing the cheque, they wanted TD to put security measures on it and issue a new one.

George, who is the executor of his father's estate, says when he asked the bank for certified cheques there wasn't a conversation about where they were going or whether there was a more secure way of sending the funds.

An Aug. 11 letter from George's lawyer to the bank indicates TD couldn't put a stop payment on the cheque and instead asks it to be flagged in case someone else attempts to cash it.

George says after CBC News contacted the bank this week, TD flagged the cheque and offered the indemnity agreement.

TD spokesperson Ashleigh Murphy says the bank doesn't comment on the specifics of a customer issue, but confirms it's working with George on "next steps."

Murphy said in a statement the bank has a "regular process" to deal with lost certified cheques, but says if it's deposited the money will go through. She says the bank where it's deposited will be available.

"No stop payment can be lodged on a certified cheque or draft, as they are considered forms of certified funds, where essentially the piece of paper is worth the money," Murphy said.

'Almost as good as cash'
Banking expert Omar Fares says a wire transfer is the most secure way to send large sums of money, followed by a bank draft, then a certified cheque.

Fares, who is not involved in the case and spoke to CBC News in general, says a certified cheque is "almost as good as cash" but the person cashing it would very likely be asked to provide ID that matches who the cheque is made out to, and proof of a bank account with the same name.

He says while banks take extra precaution with cheques of more than $10,000, fraud is rampant.

"If the wrong person gets a hold of a cheque there are layers of protection," said Fares, who lectures at Toronto Metropolitan University's Ted Rogers School of Retail Management.

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"But, if the wrong person gets a hold of the cheque, this can definitely be problematic and it can be very hard to be stopped."

Fares says it's not the responsibility of a bank employee to tell a customer which method of sending money is the most secure, but says from an advisory and customer service standpoint, an employee could "go the extra mile" by informing the customer.

The brothers say the whole ordeal is even more difficult considering their parents sacrificed a lot and worked hard to support their family.

"My parents came over as immigrants in the 1950s and worked hard all their whole life and now they're gone," George said. "They've passed on what was left to their children. This is what's become of it? It's horrible."

A man in a white shirt and suit jacket stands with office buildings behind him.
Banking expert Omar Fares says there are protections to ensure certified cheques aren't cashed illegally, but that doesn't always stop fraudulent behaviour. (Keith Burgess/CBC)

September 22, 2023
2:28 pm
savemoresaveoften
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An interesting story to those who prefer paper over electronic and also favorite brick and mortar banking, cuz they think it’s safer.
Hope the affected gets it sort out soon.

September 22, 2023
4:49 pm
HermanH
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davidgeorge said
"For the rest of my life I'm going to be looking over my shoulder; Is this the year they're going to cash it?" he said.

I don't know why he has such angst. After 6 months, the cheque is considered stale-dated and should not be accepted. Any institution accepting a stale-dated item would be at fault. AFAIK, only Govt of Canada cheques are good forever.

September 22, 2023
6:08 pm
Norman1
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According to Payments Canada Rule A4, section 22, bank drafts and certified cheques cannot be bounced because they are older than six months:

Stale Dated Items

22. a. Subject to subsection (b), each Item dated more than six months prior to presentment for payment may be returned unpaid for the reason “Stale Dated”.

b. Subsection (a) does not apply if the Item is a Bank Draft, Money Order, Certified Item, or Receiver General Warrant.

So, they are good forever.

It is also not the case the executor didn't do anything wrong. Executor was neglient for not insuring the mailed $300,000 bank draft for the cost of the indemnity bond just as he would have been had he mailed a stock certificate for $300,000 worth of shares and the certificate got lost.

September 22, 2023
9:44 pm
Loonie
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Many of us probably could make the same error as the executor.

But, if you think about it, a piece of mail is a piece of mail, registered or not, couriered or not. It might be handled by various machines and people, and moved in various vehicles There is no reason it can't get "lost", mangled, stolen, or destroyed in a vehicular accident.
Any rational person would recognize that these are possibilities, if they thought about it. The problem is that they assume someone else will be responsible. They don't realize the consequences.

I think the solution is more and better financial education, especially through the schools; and it wouldn't hurt if bank staff made a point of explaining the risks of various kinds of transfers. A good lawyer could be helpful too, to guide the executor through the process so as to avoid pitfalls.

Over the years I have had to arrange for two very large transfers. One (overseas) was initiated by a lawyer-executor who sent a wire transfer. The other was initiated by me; I got the receiving FI to provide the destination details in writing so any transmission errors could not be my fault, and gave this info to the sender who sent a wire transfer, but the lawyer in question failed to advise me to do so and gave me the option of a bank draft. A bank draft is usually cheaper and may be more attractive for that reason.

When I bought a new car a few years ago the dealer insisted on a bank draft. I wasn't happy about this but had no choice. You can be sure I drove directly form the bank to the dealership, a distance of about 3 miles - fortunately without incident.

There's gotta be a better way!

September 22, 2023
11:27 pm
Norman1
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The bank draft may not cheaper if one adds in cost of the mailing insurance.

Lost document indemnity bond premium is around 3% of the value of the lost certificate or lost bank draft. Premium for the indemnity bond for a lost $300,000 bank draft would be around $9,000! So, one would need to insure the mailed/couriered $300,000 bank draft for around $9,000.

Canada Post charges $2.50 per $100 of insurance for registered mail. $9,000 of insurance would cost around $225+tax if one could get it.

Problem is Canada Post won't cover $9,000. Their maximum coverage is $5,000.

I warned one relative who agreed to be the executor of an estate about this issue with lost bank drafts. Mail regular cheques to distribute the money to the heirs. If a regular cheque gets lost in the mail, one can place a stop payment on the lost cheque and write another one.

September 23, 2023
4:29 am
savemoresaveoften
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Just wondering if electronic transfer etc arranged by lawyers / banks not possible ? I assume it should be. When one buys a house, one don’t have to mail a million dollar check. The involved bank and lawyer can sort it out. Only risk is if the lawyer takes the money and run…

September 23, 2023
7:39 am
Norman1
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Wire transfer can be done. But, they can be risky from an undetected compromise of the e-mail of one of the parties.

This is from CREA Café (May 18, 2023): What REALTORS® Should Know About Wire Transfer Fraud:

Larry Winton, a partner at Fogler, Rubinoff LLP in Toronto, recounts a large-scale commercial transaction he was involved in that offers important lessons any REALTOR® or real estate lawyer should take away. Verbal confirmations with the other side’s lawyer to verify wire instructions are a must in any transaction, before money is sent, Winton adds. “Never take anybody at face value.”

In the deal, which involved millions of dollars that was supposed to go to one of his clients, Winton said he emailed the wire instructions to the other team’s lawyer. When the money did not arrive the next day, calls were made and IT departments were brought in. It was determined that the email that left Winton’s server contained the correct instructions, but what arrived on the other side’s server did not.

Someone had hacked into the other side’s server, intercepted the message, copied it with the same heading and wording that was in Winton’s email, but they slipped in other wiring instructions. Fortunately, the bank was able stop the fraudster from moving the money fast: The scammer had moved it to a Canadian bank first and not out of the country.

September 23, 2023
9:14 am
MG
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I was an executor about 4 years ago and one of the beneficiaries kept insisting I send a certified cheque in the mail (the person did not have a bank account at the time). I refused since I remember reading about another similar incident - where a bank draft got lost in the mail and there was virtually no recourse. Pretty scary what hoops the bank will put you through (like a lien on your property!) I just mailed a regular cheque to the individual and told them that was the limit of my responsibility to them. They eventually got a bank account and cashed the cheque.

https://www.npr.org/sections/thetwo-way/2017/12/14/570859366/an-846-000-inheritance-got-lost-in-transit-that-was-in-february

September 23, 2023
9:23 am
Dean
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.
A question for the OP . . .

In Post #1 you presented that CBC article not once, but Twice. Once as a link to the article, and then yet Again as the Entire text of the article. Are we supposed to read it Twice ?! ... LOL sf-laugh

Surely once would have been more than enough.

But thanks for the Chuckle,

    Dean

sf-cool " Live Long, Healthy ... And Prosper! " sf-cool

September 23, 2023
9:24 am
dougjp
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Norman1 said
The bank draft may not cheaper if one adds in cost of the mailing insurance.

Lost document indemnity bond premium is around 3% of the value of the lost certificate or lost bank draft. Premium for the indemnity bond for a lost $300,000 bank draft would be around $9,000! So, one would need to insure the mailed/couriered $300,000 bank draft for around $9,000.

Canada Post charges $2.50 per $100 of insurance for registered mail. $9,000 of insurance would cost around $225+tax if one could get it.

Problem is Canada Post won't cover $9,000. Their maximum coverage is $5,000.

I warned one relative who agreed to be the executor of an estate about this issue with lost bank drafts. Mail regular cheques to distribute the money to the heirs. If a regular cheque gets lost in the mail, one can place a stop payment on the lost cheque and write another one.  

The basic cheque. Often the oldest and simplest method is the best.

EFT (the other free possibility) would take 10 months to transfer $ 300k due to the daily/weekly/monthly limits, not counting interest!

" We may never pass this way again " - Seals & Crofts

September 23, 2023
12:04 pm
lifeonanisland
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Dean said
.
A question for the OP . . .

In Post #1 you presented that CBC article not once, but Twice. Once as a link to the article, and then yet Again as the Entire text of the article. Are we supposed to read it Twice ?! ... LOL sf-laugh

Surely once would have been more than enough.

But thanks for the Chuckle,

    Dean

  

Right on point as always.

September 23, 2023
12:57 pm
Rail Baron
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I once had a Fedex shipment that burned up in a delivery vehicle that caught fire with my shipment, and all others aboard, lost in the blaze. They refunded the shipping fee, but that was it. Fortunately the business documents enclosed were replaceable, but there were extra costs for recreating them.

So couriers are not immune to delivery risks, either.

September 23, 2023
1:51 pm
Norman1
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Canada Post and couriers are not going to offer to cover any lost shipments if one didn't pay for extra liability.

The CBC article tries to insinuate that Canada Post is doing something wrong by saying Canada Post did not offer any compensation and not provide context.

I've sent documents by Canada Post registered mail. Registered mail comes with $100 liability. If I need more liability coverage, then I need to pay more for more coverage. It is glaringly negligent to send a bank draft that will cost around $9,000 to replace, if lost or destroyed in transit, with just $100 of coverage.

September 23, 2023
5:18 pm
COIN
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For $300,000, it would have been worthwhile to open a TD chequing account and ask them to deposit that money to that account and then write a cheque on your new TD chequing account to take out the cash.

September 23, 2023
5:46 pm
canadian.100
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I am baffled why the executor decided to certify the cheque before sending to the beneficiary.

September 23, 2023
6:35 pm
HermanH
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Possibly to give his brother confidence in the cash. We do not know the relationship they have. It could be strained due to the death. Maybe he thought the roles would/should have been reversed and he would be executor.

Can anyone tell me what the difference between certified cheque and draft?
Aren't funds removed from the account immediately after the instrument is issued, for either choice?

The certified cheque uses the issuers paper, so it could conceivably be fraudulent while the paper for the draft is always kept secure at the bank. Is my understanding correct?

September 23, 2023
7:27 pm
bobwatford
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A little off topic....but about 20 years ago I stopped by my parents house....they lived on a farm.....dirt road.....very rural.....old style mailbox across from the driveway. As I'm turning in the driveway I notice an envelope in the middle of the road. Looked odd as there isn't usually trash just blowing around out there so picked it up. Had tire tracks on it but was addressed to my mom and must have been dropped when they grabbed the mail the previous evening....usually mail was folded in with the daily newspaper. Took it inside and gave it to my mom. It was a cheque from her sister's estate in England for 80,000 pounds.....I think the exchange rate back then was about 1.8 CAD per pound. No idea what sort of cheque it was....but I guess the moral of the story is sometimes old people lose things.....LOL.

September 24, 2023
6:05 am
Norman1
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Lucky you found that £80,000 cheque for your Mom!

A widow in southern Ontario wasn't as lucky. In 2015, she misplaced an RBC bank draft for $273,225 from her real estate lawyer and was not able to find it. That stranded the $273,225 that was going to pay for her condo.

September 24, 2023
6:13 am
Norman1
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HermanH said

Can anyone tell me what the difference between certified cheque and draft?
Aren't funds removed from the account immediately after the instrument is issued, for either choice?

A certified cheque is a regular cheque the client writes and the bank it is drawn on certifies afterwards. Yes, the bank usually removes the funds for the cheque from the client's account when the bank certifies the cheque. Some of the MICR digits are punched out so the cheque isn't automatically processed and the funds debited a second time.

A bank draft is a cheque written by the bank on one of the bank's own accounts. Bank will require payment for the draft before it issues the draft.

Both can be counterfeited.

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