Question about wire transfers | General financial discussion | Discussion forum

In this case, I, the recipient, was not trying to access the money. However, the FI held it in a non-interest-bearing account for 18 days before transferring it to interest-bearing account. As I had no immediate plans to do anything with the money, I didn't notice that it was in the wrong account until after this period had passed. As it's a large amount of money, the interest matters!

How should I best present my argument? I am really ticked off that they sat on this money all that time. I don't think I can use a case that was adjudicated in New York, interesting though it is.
Can I cite these Payments Cnada paragraphs as binding on the FI?

"Wire transfers are a quick, safe and reliable way for businesses to transfer funds both domestically and internationally. The Large Value Transfer System (LVTS) is used to send Canadian dollar wire transfers between participating financial institutions (FIs) across the country. LVTS is also used for the Canadian leg of international wire transfers.

LVTS wire transfers are supported by a strong legal framework which enables the sending of near real-time, irrevocable payments. This certainty allows recipients to use the funds the moment they become available, with full confidence that the payment will not be reversed for any reason."

Unfortunately, the OSBI case does not seem relevant as it has to do with an international transfer and the complaint has to do with currency exchange.

To my mind, the Payments Canada statement seems clear. Is it binding on the FI?

You could say that the wrong account was credited inasmuch as it was not an interest-bearing account. However, the FI, of its own initiative, transferred the funds to interest-bearing after 18 days, so it seems they set it up that way. I had asked the FI for info to give the lawyer about where to send it, which was given to me on paper (a great many numbers and so on, none of which I could decipher as I have no experience with this), and I gave the paper to the lawyer. Thus, the FI chose which account it would go to and controlled how long it stayed there.

I see where my case could be a bit confusing.

When I went to the FI to see about setting up this transfer, I asked him to print out the instructions for the lawyer so as to avoid any errors on my part. Since those instructions were indecipherable to me, I did not realize the funds would be going to non-interest-bearing account.

18 days later (15 business days), the funds moved to the interest-bearing account on the initiative of the FI. I had nothing to do with it. I believe this demonstrates that the funds were on Hold for those intervening days as there is no other reason for the FI to move the funds after this period. I think it clearly demonstrates that they understood this was the destination for the funds.
The only reason I sent it by wire rather than asking for a cheque was so that the funds would start earning money immediately. I believed there would be no hold on the wire but there would be on the cheque. Also, they charged me $16 for receiving the wire, an expense I would obviously not have chosen if I'd thought it would not be recompensed by the interest.

Thus, although technically the money was sent to the correct account (presumably, as I was not given a choice), the FI clearly knew where it was supposed to go. They just put a Hold on it for 3 weeks before they moved it to the proper account.

Thus, I believe the problem is about Holds, not about which account the transfer went to. I anticipate that when I complain about this, they will tell me the funds were on Hold before being transferred. So I want to be able to respond to that. That's why I think the Payments Canada statement is the relevant one and am wondering if it is binding.

I hope that is clearer.

I am not aware of any staffing issues affecting this. The fact that it was exactly fifteen business days (3 weeks) suggests it's policy.

Yes, I think it's likely that the account they used for the transfer is the only one that could be used due to internal set-up. That's maybe why I wasn't given a choice.

I think that there was also a Hold put on it, which would explain the 3 week delay in transfer to interest-bearing. It's that Hold that I want to challenge, because it seems clear that, without it, the money would have been quickly transferred to interest-bearing on the FI's initiative.

I think they are either ignorant of or playing loose with Payments Canada rules. It may be a technology thing that nobody has addressed because nobody has complained successfully as most people would not be able to cite this rule. They may have lumped it in with cheques and so on.

Thanks for your help on this I'll have to contact them tomorrow.

In this case, there was some confusion/difficulty in getting access to the account online. I could see the money had been deposited, but didn't realize it was in wrong account as their accounts have confusing names and I had no reason to think it would be. I won't go into it all and access is resolved now. If I'd realized the money was in no-interest account, I would have tried to transfer it - and probably couldn't have because of what I suspect was a Hold.

In fact, the more I think about it, I think I remember the agent saying it would have a Hold and indeed a long one - unspecified as far as I recall. I didn't pursue it at the time because I just thought he was wrong (as he has been wrong in the past more than once) and that it would sort itself out through due process. I did intend to move some of it out within a couple of weeks, but that didn't happen for other unrelated reasons.

No kidding!

I've run into that particular problem at other FIs where the Hold period was anticipated - and shorter.