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Family dropped as client of bank, not told why
June 8, 2018
12:59 pm
Loonie
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In contrast, Meridian CU gives this more limited rationale for closing accounts:

"Meridian reserves the right to discontinue the operation of this account should public information come to our attention that confirms that continued operation of this account may create an impending risk to Meridian and/or its Members."
https://www.meridiancu.ca/About-Meridian/Personal-Membership-Terms-Conditions.aspx

June 11, 2018
9:35 pm
Norman1
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Loonie said

Second, it may not be an issue that is of interest to the police at all, but only to TD bank. The letter suggested the issue, whatever it was, was identified in the course of some kind of regular scrutiny of accounts. If this is to be believed, then it doesn't suggest police involvement. More likely, it suggests the family wasn't lucrative enough to the bank.

My accounting firm lops off a small percentage of its least profitable clients every year, for example - the ones who take up too much of their time for too little gain. They are quite clear that this is their practice.

This may simply mean the bank was losing money on this family - note that the family was said to pay all their bills regularly, thus paying nothing in interest, and had accumulated $1600 in travel points. It's conceivable that TD saw confiscating those points as a way to finally make some money from these people before they cashed in those points! - but I don't know that.

The bank likely was losing significant money on the family. But, it is not because of something like the earned travel points from their credit card.

Such points are funded out of the interchange on the credit card. If there was a mismatch of say 100 basis points between the collected interchange and the redemption cost of those points, it would only be $16 loss on their $1,600 worth of points. $16 is not enough to for TD to shutdown all their accounts, including investment accounts.

It is more likely something more serious and something that TD cannot provide more details about: Compliance costs for the bank. The family may have triggered the need for TD to regularly review their accounts for potential money laundering, terrorist activity financing, or money transfer business. The costs of such monitoring and FINTRAC reporting would much higher than $16 above what they collect from the family.

The similar case with the Iranian man in Montreal is consistent with that. A money transfer business is not illegal. Western Union has no problem with its bankers. But, the banks compliance costs are high for such businesses, especially if transfers to embargoed countries, like Iran, are involved.

In the case with the family, I did a Google search on the woman's name. I found a FundRazr page for a Toronto area woman with her name and photo. It looks like it's her.

The page is trying to raise funds for the medical expenses of a widow in Pakistan. That is really unfortunate.

Pakistan is highly suspected to be a terrorist-friendly country. As well, a common technique for the terrorists is to set up charities to raise funds. It is not too much of a stretch that sending money regularly to Pakistan could trigger expensive monitoring of the family's transactions.

June 12, 2018
12:30 am
Kidd
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Most canadian banks and both Bell and Rogers have their calling centres in the region of Pakistan and India.... hmmm?

June 12, 2018
5:01 am
Loonie
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If raising money for medical expenses for someone in a poor country ravaged by violence is tantamount to a crime in the eyes of TD, prima facie, then shame on them. At the very least, they have a moral obligation to explain what their concern is to the client so that the client can decide what to do. If.
I have not looked into this particular fundraising campaign, but it would be interesting to know if other contributors are similarly targeted.

Compliance costs are a cost of doing business which should be spread over all accounts if necessary to avoid arbitrary punitive actions. They can afford it. In this day and age, with a global economy etc., they should anticipate this. I find it more than a little creepy that they are spending money tracking people's charitable activities.

Yes, yes, it's vaguely possible that the campaign is a fraud and the money is going elsewhere, but if all the other evidence on this family is positive and you don't have any hard evidence to the contrary, then you have no business making such assumptions. As Kidd points out, they already have people in such countries, replacing Canadian workers, so they can certainly find out if this person really exists.

Too bad the government closed down the old Province of Ontario Savings offices. They gave good interest too.

June 12, 2018
5:06 am
Bill
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Norman1, some people would not believe your search findings as we are told by some that the (aimed at elementary-school kids?) obvious media slant, "big evil bank vs poor innocent customer", is the proper way to view this story. After all, journalists and their employers are professionals.

As I've said before, for various reasons but due mainly to some work experience, I've learned the (mainstream and other) media
1) usually for privacy or other legal reasons cannot be given the full story, and
2) comes looking only for evidence to support the pre-determined narrative slant the journalists' employers want to feed the sheep (zero interest in ALL the facts).

My experience has formed my view.

June 12, 2018
5:32 am
Bill
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Loonie, it's an exaggeration to say "tantamount to a crime", after all TD simply closed the accounts (and then responded to the media that was clearly originally alerted by the complainant). I'm not sure the original media report referred to calling in the police, etc, i.e. those TD would have to notify re possible crimes. And I don't agree that a corporation, TD, can have a "moral" obligation - legal fictions are bound to follow the laws, that's it, despite attempts of some to give them additional duties.

And I'm a bit confused when you say it's creepy that TD is tracking activities but then you say they should have used their employees in Pakistan to look into this more.

I heartily agree that donating to poor countries is a good idea (my government does it for me with the taxes I send it) but a consistent position would be to encourage global trade, not be for "Buy Canadian", so that we can additionally support poor 3rd world workers (e.g. TD's foreign employees) with our own discretionary spending by patronizing those businesses that employ these poor folks whenever we have the opportunity.

June 12, 2018
6:03 am
Loonie
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FINTRAC does not require the bank to close an account, only to report what they consider "suspicious activity".

Major corporations including TD claim to do good through corporate philanthropy. This is a moral position of which they are very proud. It is tarnished, however, when their policies in other areas do not follow this standard.

I will retract the suggestion that they might have used local employees in Pakistan to investigate - not because I agree with Bill. It might have exonerated this family and saved them all this trouble. However,I will withdraw it because apparently Fintrac expects the bank to report things when they appear suspicious, without investigation, and of course this is a judgment call in many cases.

As you know, Buy Canadian was a suggestion vis-a-vis the US. The rest of the world is another matter and is well beyond the scope of this thread.

June 12, 2018
11:00 am
Doug
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I haven't read this thread completely but, with all due respect to bank investor Bill, TD Canada Trust hasn't explained why this family was being dropped, unless I'm missing something, correct? Loonie, and others, have rightly picked up on this point. They're hiding behind the Privacy Act, in my opinion, as that's somewhat of a red herring as they could offer to have the customer sign a liability waiver authorizing them to discuss the issue, or they could discuss the issue with the customer privately or with CTV News' Pat Foran accompanying her.

The fact is...they aren't saying why as that adds potential legal liability as it would be a tacit acknowledgement to potential violations of human rights or other legislation (federal or provincial). They can drop customers from the more serious (i.e., being from a higher risk country, even if not one subject to specific U.S., Canadian, or International economic sanctions) to even just being a high cost, high service customer. I do think they should've paid her out on the cash value of her credit card rewards points earned, and I think that's where she has potentially a very good legal case.

HSBC Bank Canada does this even more than many of the other Canadian banks, though they're also starting these activities. When I worked there, HSBC even called it the Demarketing Team (for lack of a better term). It mainly dealt with customers from medium to higher risk jurisdictions on their internal Group Country Reputational Risk Table ("CRRT"), not just sanctions countries, and potential anti-money laundering ("AML") cases but also "exited" (as they called it) small business banking customers, which tended to have high numbers of higher cost in-branch transaction volumes, and non-profit societies, which were costly for the number of signing authority changes they often required.

I do question why TD's Ombudsman said they couldn't investigate as it wasn't in their mandate. Umm.. how so? It involves a customer being "exited." Useless bank ombudsmen. 🙁

Cheers,
Doug

Disclosure I am a TD Bank Group shareholder but have never banked with them, nor would I.

June 12, 2018
11:05 am
Doug
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Loonie said
FINTRAC does not require the bank to close an account, only to report what they consider "suspicious activity".

Major corporations including TD claim to do good through corporate philanthropy. This is a moral position of which they are very proud. It is tarnished, however, when their policies in other areas do not follow this standard.

I will retract the suggestion that they might have used local employees in Pakistan to investigate - not because I agree with Bill. It might have exonerated this family and saved them all this trouble. However,I will withdraw it because apparently Fintrac expects the bank to report things when they appear suspicious, without investigation, and of course this is a judgment call in many cases.

As you know, Buy Canadian was a suggestion vis-a-vis the US. The rest of the world is another matter and is well beyond the scope of this thread.  

Very good point, Loonie. The Canadian banks are often exiting customers from higher risk countries because they require more extensive monitoring to be onside with FINTRAC. Extensive monitoring requires cost and the words "added cost" might as well be expletives to the Canadian banks. 😉

As far as using local staff's judgment, it might've been the local staff that filed the reports or made the "exit" recommendation to the bank's central demarketing team. 🙂

Cheers,
Doug

June 12, 2018
11:12 am
Top It Up
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whose bank account is it anyway? a bank’s right to close an account against the customer’s will

It is not good business for a bank to tell a customer to move its accounts elsewhere, but banks will occasionally do so. Typically, this happens where there has been a breakdown of trust in the banking relationship, for example where the bank suspects fraudulent activity, such as money laundering or cheque kiting, or ties to terrorism. In fact, banks are not only wise to terminate the relationship in these circumstances, but are often required to do so pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

However, the grounds upon which a bank may wish to end a relationship are occasionally less clear and clients, not always thrilled to learn that their bank accounts have been terminated, will often take issue with the right of the bank to do so. The question becomes: is a bank entitled to close a client account and terminate a banking relationship at its discretion? Courts have said that the answer is yes.

https://mcmillan.ca/Files/131105_bank%20account%20bulletin.pdf

June 12, 2018
11:24 am
Doug
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Thanks, that's an exhaustive and highly legal way to say what I just said. We're debating whether it's morally or ethically correct and I think, on that score, with the except of bank investor Bill and perhaps yourself, there's consensus that it isn't.

Even still, banks can choose to retain customers. McMillan is a large law firm just encouraging the latter option because doing so requires added cost. As Loonie mentions, banks can well afford to shoulder these added costs instead of trying to, at rapid rates, increase their dividends to prevent their share prices from retreating to the historical moving average. 🙁

Cheers,
Doug

June 12, 2018
11:39 am
Top It Up
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IT doesn't matter what you or anyone else thinks, the courts have already ruled that a bank is entitled to close a client account and terminate a banking relationship at its discretion. The case is closed - TD ain't reinstating that account.

June 12, 2018
4:33 pm
Loonie
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Actually, it does matter what we think.
We too can close our accounts and move elsewhere.

Perhaps it's time to name what is really going on here with such arbitrary opaque policies. Because some people have done some things that are illegal, everyone who needs to send money to a problematic country may be tarred with the same brush, and they have no recourse or avenue to the truth, and they are not to complain because there is no route to complain except the media. It looks like discrimination, but I'm sure we're not allowed to say that, so I won't say that it is. Might as well be though.
The banks will continue to do this as long as they are allowed to get away with it, which will probably be quite a while.

June 12, 2018
4:42 pm
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Everyone should find their hill to die on - looks like you've found yours!

June 12, 2018
6:02 pm
Bill
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Yes, that's it: Out of all their hundreds of thousands or even millions of "ethnic" clients TD (and apparently maybe even "the banks" in general!) has arbitrarily chosen one to discriminate against. Solid conclusion there, and then the allegation that the banks regularly practise discrimination "as long as they are allowed to get away with it".

Doug, as far as debating what is "morally or ethically" correct that leads nowhere as the debate would never end. For example, bank investor Bill (I like the ring of that, though it requires you making assumptions about my current holdings today) and you would likely rarely agree on what's morally or ethically correct, never mind the other 35 or so million Canadians, including some professional philosophers, so that's precisely why most of us realize the importance of the supremacy of our laws (which are regularly adjusted as society directs) in staving off chaos. Schools used to teach that.

A reminder: If media sticks a microphone under your nose you're under no obligation to even acknowledge their existence - I know being on TV is cool but to some of us media has no special status re our affairs.

June 12, 2018
8:19 pm
Jon
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When you are a government, you have to have law written as precise and specific as possible in order to avoid government from abusing its power. (Interestingly, this point is raise by a dictator call Napoleon Bonaparte!)

However, such criteria need not apply on private entity as it is a much weaker institution compare with any government. Not to mention it is generally easy for people to switch service provider/seller compare with switching government.

If switching seller become a difficult thing, than we need the government to step in and use its anti - trust law to ensure competition (along with efficiency and innovation that competition brings).

Peter, pleae lock this thread.

June 12, 2018
10:05 pm
Norman1
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Bill said
Norman1, some people would not believe your search findings as we are told by some that the (aimed at elementary-school kids?) obvious media slant, "big evil bank vs poor innocent customer", is the proper way to view this story. After all, journalists and their employers are professionals.

There isn't much I can do about that, Bill. My Google findings are a piece of a much larger puzzle. Sometimes, the pieces of the puzzle are scattered across multiple sources.

The journalists and the press are a mixed bunch. Some like, the Wall Street Journal, are thorough in their reporting. Some of the Canadian ones are not so much.

I remember one sloppy TV outlet that did a "hatchet job" on one of the Ontario towns with a nuclear power plant. The reporters took urine samples of some of the residents and had them analyzed. The lab reported back that there were radioactive uranium isotopes in the urine samples! sf-surprised

The mayor was not impressed when that aired on TV. He asked for a copy of the lab reports and took them to some experts for a second opinion.

It turned out those small traces of uranium are perfectly normal for that area of the country. It comes from the ground water which picks it up as it seeps through granite. Granite is naturally radioactive and has minute traces of uranium! People who live 500 kms away who regularly drink well water would have similar traces in their urine samples.sf-laugh

June 12, 2018
10:27 pm
Loonie
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Bill, you don't know how many people may have been affected by decisions such as the one at hand. If it were up to you, we'd never know about any of them because you are so negative about the value of a free press.

Jon, there was a time when corporations were weaker than nations, but this can no longer be relied upon . Today's global corporations are increasingly powerful and wealthy and enjoy trying to assert their rights over those of national governments through certain kinds of trade agreements and international courts. I wouldn't be surprised if some corporations aren't wealthier than some nation states.

I would agree with Bill and Jon that laws need to be regularly reviewed. In this case, the laws need review to protect ordinary Canadians who are not doing anything wrong from being shut out of banking privileges. You can't exist without a bank account in this increasingly cashless society.

June 12, 2018
10:48 pm
Norman1
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Loonie said
If raising money for medical expenses for someone in a poor country ravaged by violence is tantamount to a crime in the eyes of TD, prima facie, then shame on them. At the very least, they have a moral obligation to explain what their concern is to the client so that the client can decide what to do.

I presented that as a piece of the puzzle and not as the entire puzzle itself.

I highly doubt that sending small amounts of money to Pakistan would alone cause TD to shutdown a family's accounts. It is quite common in banking for people to send remittances to their relatives who have not immigrated to Canada.

We don't know exactly how much money she was sending and to what countries. There is also the possibility that the full reason may not be just her transfers.

Imagine I was sending $50 a month to someone in Pakistan. When asked by TD, I explained the money is to help a poor relative with her medical expenses. Sounds benign.

Months later, TD discovers a disturbing pattern. Over 100 other TD customers are also sending $50 a month to the same Pakistani bank account for the past year. 100+ x $50 = $5,000+ a month or $60,000+ a year. That's over 90 times the average income in Pakistan, around US$500 per year!

The discovery may not be beyond the reasonable doubt required for a criminal conviction. But, it most certainly beyond the reasonable doubt required to further investigate and do heightened monitoring.

If TD decides it isn't worth the additional expenses of heightened monitoring, I don't think TD would disclose to me what they discovered when they close my accounts.


Compliance costs are a cost of doing business which should be spread over all accounts if necessary to avoid arbitrary punitive actions. They can afford it. In this day and age, with a global economy etc., they should anticipate this. I find it more than a little creepy that they are spending money tracking people's charitable activities.

They aren't tracking people's charitable activities. They are looking at their financial transactions, especially those that involve certain countries on the terrorist financing list.

I'm sure routine compliance costs are expected. But, not extraordinary ones. I'm sure none of my bank accounts are priced to include the cost of staff to manually review my transactions weekly for terrorist financing, money laundering, or running a money transfer business.

June 13, 2018
9:37 am
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Loonie said
It looks like discrimination, but I'm sure we're not allowed to say that, so I won't say that it is. Might as well be though.  

Not even in the realm of plausibility given the current Chief Executive Officer of TD Bank Group was born in Uganda, and is of Indian descent.

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