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Caution about Luminus fees
September 26, 2017
1:49 pm
GR
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Caution to those thinking about doing business with Luminus Financial. First, you should carefully review all their service fees on their website. They have very extensive lists of service fees and their fees are high. As an example, they charge $20 for each EFT - electronic funds transfer (they call it CAFT), whereas EFTs are normally free at other financial institutions.

September 27, 2017
4:48 pm
Loonie
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I knew they were in the process of revising their fee structure. Have they done it now?

They have always had a lot of fees but didn't always charge them.

This is not an institution that is really set up for EFTs. I would not use it with that in mind. It's really only set up well for local people and it's a very small credit union. Better to go in and get a bank draft. Those used to be about seven dollars but perhaps more expensive now?

January 1, 2018
9:47 am
Nehpets
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Loonie said
Better to go in and get a bank draft.   

Maybe not..please read this CBC News story:

Why old-fashioned bank drafts could leave you on the hook for big bucks

January 1, 2018
12:03 pm
Norman1
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Nehpets said

Maybe not..please read this CBC News story:

Why old-fashioned bank drafts could leave you on the hook for big bucks  

Of course there is going to be a hassle if one loses an $846,000 bank draft. That is one of the major reasons for insisting on a bank draft: It is guaranteed and cannot be canceled.

Were people expecting the bank to say "No problem, here's another $846,000 draft"?

January 1, 2018
12:27 pm
Loonie
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I'd still rather go in and get the draft than have them mail it to me. That latter option always scares me!

There are various occasions when one has no real alternative but a bank draft, such aas when making large purchases or shutting down an RSP etc.

I always scout out the route I'm going to take when I leave the bank, beforehand. call me paranoid! I make sure there will be time to get in the door to make the deposit so that I won't be trying to deposit 40K into a bank machine etc. Fortunately for me, I live in a big city and there is pretty well always a branch of a bank where I have an account nearby. I have been known to actually choose the branch where I will get my draft according to its proximity to a place where I can deposit it. (This was part of what was so annoying in my other thread about cashing the LIRA - the branch where I intend to deposit the proceeds is across the street and will be closing in February, so I will now have to travel further to cash it since I am only permitted to cash out the LIRA at the branch where it is deemed to reside.)

A draft can always be cancelled and re-issued if there is the will to do so, however. It's not cash - and that is the point. It's traceable. It may be a nuisance and certainly undesirable, but it can be done. If it's cashed by someone to whom it is not issued, that is fraud. That said, it should always be considered like cash, a bit of a hot potato, something you want to get to a safe place immediately. If you're sending it somewhere by courier, get it fully insured.

January 1, 2018
1:10 pm
Norman1
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Loonie said

A draft can always be cancelled and re-issued if there is the will to do so, however. It's not cash - and that is the point. It's traceable. It may be a nuisance and certainly undesirable, but it can be done. If it's cashed by someone to whom it is not issued, that is fraud. That said, it should always be considered like cash, a bit of a hot potato, something you want to get to a safe place immediately. If you're sending it somewhere by courier, get it fully insured.  

A bank draft or money order is quite close to cash for the financial institution.

According to Payments Canada Rule A4, Section 4, they are special. The financial institution can only do a stop payment on them if they were lost or stolen before actually issued. Otherwise, the financial institution is forced to honour the draft or money order if it is deposited by the payee:

4. Subject to the following exceptions, an Item may be returned by the Drawee pursuant to this Rule if, for any reason payment is refused or cannot be obtained:

(a) No Item shall be returned for the reason that the “words and figures differ” where the difference is twenty dollars ($20) or less;

(b) A Drawee may not return an Item that it certified before the Item was Exchanged for the purpose of Clearing and Settlement, unless the Item is returned for the reason “Forged Endorsement”, “Intended Payee(s) Not Paid”, “Duplicate Payment Item”, “Item Incorrectly amount-encoded”, “Item Cleared in Wrong Currency”, “Image Missing or Not Usable”, “CRD or Image MICR Mismatch” or for the reason that the Item has been Materially Altered subsequent to certification; and

(c) A Drawee may not return a Bank Draft or Money Order for the reason "NSF", "Stale-Dated", “Funds Not Cleared” or “Payment Stopped”. If a Bank Draft or Money Order has been lost or stolen prior to issue, the return reason "Other – Lost or Stolen prior to Issue" shall be used.

January 1, 2018
2:07 pm
Loonie
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Nonetheless, "close to" cash is not cash.
To say that they only do a stop payment before they are issued is patently absurd; must be some legal mumbo-jumbo.

However, I don't see anything that applies in what Norman has quoted. As I recall from when the story first broke (I have not read the link posted), the draft in the news item was lost after it was issued. It was never "returned".

It reminds me of the problem of what to do when someone goes missing and is not located after X years. Eventually, the law declares that they have died, for legal purposes. The person's assets are distributed to rightful heirs.

The money backing a bank draft exists somewhere, and the bank is under an obligation to eventually get it to the person to whom it belongs; otherwise, the bank would get to keep something that was not theirs or would presumably have to send it to the Bank of Canada in trust for the rightful owner, as with abandonned accounts. Surely there are more laws at play here, if it comes to it, than those of Payments Canada - and that was probably a legal risk the bank did not ultimately want to take. It was obviously preferable for them to just return the funds, which they eventually did, as I recall, rather than to end up in court having to account for the money. There always has to be some provision for the unfortunate fellow who gets trampled by a bus and his bank draft destroyed as leaves the bank and crosses the street to deposit it elsewhere.

The lesson, perhaps, is that you may have to make a "big stink" if you want your money back. If it were cash, it would be the individual's loss, but it's not cash; it's a form of promissory note which all have agreed to accept as a means of transfer. The cash is in limbo until the draft is cashed by the person whose name is on it.

It would be best if FIs like Luminus figured out how to do EFTs. Their location is such that you will need to walk your draft about a half kilometer through busy traffic in order to get to a branch of any of the Big Five. For me, this is a big reason not to do business with them as I am uncomfortable walking that far with a draft for large amount in my pocket. They do encourage the use of a chequing account, and that would largely solve the problem, but that will also involve costs.

January 1, 2018
8:00 pm
Norman1
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Loonie said
Nonetheless, "close to" cash is not cash.
To say that they only do a stop payment before they are issued is patently absurd; must be some legal mumbo-jumbo.

The shipment of blank bank drafts or money orders could have been intercepted on their way to the branch.

However, I don't see anything that applies in what Norman has quoted. As I recall from when the story first broke (I have not read the link posted), the draft in the news item was lost after it was issued. It was never "returned".

The point I was trying to make was that once issued, the bank draft cannot have a stop payment applied. Any stop payments on bank drafts one may have heard of apply to blank ones stolen from a bank branch.

Also, since an issued bank draft does not stale date, like a regular cheque does after 6 months, the bank is on the hook for it indefinitely.

It reminds me of the problem of what to do when someone goes missing and is not located after X years. Eventually, the law declares that they have died, for legal purposes. The person's assets are distributed to rightful heirs.

"Presumed dead", "presumed lost", or "stale dated" doesn't apply to money orders, bank drafts, or certified cheques according to Rule A4.

The situation is similar to losing a stock certificate and or bond certificate. When someone loses a certificate for $800,000 of BCE shares, the person is in serious trouble. The transfer agent is not going to just hand out a replacement certificate for the $800,000 of BCE shares.

The money backing a bank draft exists somewhere, and the bank is under an obligation to eventually get it to the person to whom it belongs; otherwise, the bank would get to keep something that was not theirs or would presumably have to send it to the Bank of Canada in trust for the rightful owner, as with abandonned accounts. Surely there are more laws at play here, if it comes to it, than those of Payments Canada - and that was probably a legal risk the bank did not ultimately want to take. It was obviously preferable for them to just return the funds, which they eventually did, as I recall, rather than to end up in court having to account for the money. There always has to be some provision for the unfortunate fellow who gets trampled by a bus and his bank draft destroyed as leaves the bank and crosses the street to deposit it elsewhere.

The bank owes the payee the money in exchange for the bank draft. I don't think payee can obtain the money from a bank draft without surrendering the draft. "The draft was in the mail" wouldn't be enough.

Bank didn't just return the money. Bank returned the money after an agreement was reached about the bank's liability for the issued bank draft. Bank accepted a signed indemnity from the customer for the US$17,400+ value of the draft.

Had the customer not seemed good for US$17,400+, then customer would likely have been asked to provide an indemnity bond from an insurance company to cover the liability. That's how things are handled when someone loses a stock certificate.

For lost stock certificates, the indemnity bond is 1% to 3% of the value of the shares. So, losing a certificate for $800,000 of BCE shares would be an $8,000 to $24,000 mistake.

January 1, 2018
10:40 pm
Loonie
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A blank draft "could" have been intercepted somewhere along the line, but, then, a blank draft is just an empty form. To fill it in and attempt to negotiate it would b forgery and fraud, so it would be meaningless anyway. Similarly, stopping payment on something you never received because it was never filled out by the bank makes no sense. The clause still is meaningless to me.

I agree that drafts don't stale date, but, still, they are obligations that must be resolved. It is not right to have them in permanent limbo.

I disagree on the application of Rule 4. As I said earlier, it relates to attempts to "return" a draft. If you no longer have it, you're not going to be returning it. The issue is whether it can be replaced/compensated, and how.
Common sense dictates that if you get the draft, walk out the door, are killed in an accident crossing the road and your draft is destroyed in the process, that the money will somehow be replaced. I don't think any law has a right to exist which intends to deprive anyone of this money - which still exists somewhere in the system and belongs to nobody else. Cash is different, and you take the risk with cash. Cash is not normally traceable and can be used by anyone. A draft is useless until cashed. If this standard cannot be met for some obscure reason known only to lawyers, then they ought not to issue them at all.
Norman's point seems to be, however, that the bank did in fact have a method to deal with the lost bank draft. I'm sure there are always methods to deal with these things but you have to push. They can't hold your money forever when there is no reason to think you could ever come up with the bank draft.
Stocks are another matter. As I understand it, stock certificates are all registered to owner? so they should be able to cancel the old one and replace with new one. If they can't, then they should figure out how. However, as I understand it, stock certificates are usually retained by broker for safe-keeping? I don't know much about this, though.

The case I was assuming we were dealing with in the news was a different one, where there was an inheritance of several 100K being sent to someone by courier and it was lost in transit and irretrievable. Under pressure, the bank made good somehow.

January 2, 2018
5:10 pm
Norman1
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Rule A4 and the other payment clearing rules are written from the perspective of the banks (not the account holders) in the payment clearing process.

Rule A4 says if a genuinely-issued bank draft is submitted into the clearing system, the bank the draft is drawn on is debited for the amount of the bank draft and the bank cannot afterwards return or "bounce" the draft for the reason "NSF", "Stale-Dated", “Funds Not Cleared” or “Payment Stopped”.

The bank is irrevocably legally on the hook for $846,000 when that draft is presented. Period. That's the way it works. That's why it will be a hassle to get that $846,000 back without surrendering the draft.

The purchaser can claim the $846,000 bank draft was lost by UPS. But, that doesn't mean UPS can't find it a year later stuck to the bottom of a bin. UPS could then delivered it to the intended payee who could then deposit it. The only way the bank could recover the $846,000 it had to pay out a second time is to pursue the purchaser who claimed the draft was lost.

That is similar with a stock certificate. A stock certificate irrevocably certifies that someone owns a stated number of shares in a company free and clear. Yes, unless one has a reason (like access to dividend reinvestment plans available only to registered shareholders), it is better to let the broker keep the stock certificates.

In the case of the $846,000 bank draft, the couple did ask the branch staff what would happen if the draft were stolen or lost. Just "fill out some documentation and a new draft would be issued" they were incompetently told.

The final resolution was the bank draft purchasers signed an indemnity agreement to reimburse TD Bank for the funds (until February 2019) should the lost bank draft show up and be cashed by the payee. A new draft was issued. This time, the heir will be driving to Toronto to pick the draft up: sf-laugh CBC News (Toronto): TD Canada Trust backs down, releases family's $846K inheritance

January 2, 2018
11:28 pm
Loonie
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I think we are agreed that the bank can find a way to get the money to the person to whom it belongs when something goes horribly wrong. The situation should be avoided and precautions should be taken. Banks don't particularly like to do this, and you have shown why they don't, nor would I expect them to, but, in the end, they will, because I think they really have no choice, although they don't like to admit it. They can't hold the money indefinitely. Making the recipient responsible for double-cashing is a workaround for not being technically able to stop payment on it. The staff who said it was just a matter of filling out some forms (if indeed that's what they said) were cavalier, but there was truth in what they said in suggesting that the problem could be solved.
I would urge all possible caution in handling a bank draft, but I would also expect reimbursement if, through no fault of mine, the draft was no longer available to be cashed.

Last year I bought a new car. The dealership insisted on receiving a draft for the balance owing, a substantial amount, as the only acceptable form of payment. I was a real "nervous Nellie", and went directly from the bank to the dealership with it hidden on my inconspicuously-dressed person, a distance of perhaps 3 miles. I couldn't wait to get rid of it and worried during the entire trip about what would happen if I had a car accident along the way. There has to be a better way!
Next time I buy a new car, if ever, I think I'll tell the salesperson they can meet me at the bank, after I've inspected the car - or no deal! Wish me luck!

I hope the guy who was inheriting all that money has opened an account at TD before he shows up to pick up the draft. I wouldn't even walk out onto the street with it, personally.

January 3, 2018
5:50 pm
Norman1
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It doesn't matter how the bank draft or stock certificate was lost. The banks and the stock transfer agents know that it happens. To get a replacement, one needs to provide for the issuer's indefinite liability for the missing bank draft or stock certificate. After that, a replacement will be issued.

TD Canada Trust discloses their handling in their Account Related Information and Administration Fees document:

Request a refund or replacement for a lost or stolen Canadian or U.S. dollar bank draft: $10
Request a refund or replacement for a lost or stolen bank draft in any other currency: $22

You may be required to buy a surety bond or pledge assets as security for the refund or replacement draft. Other bank fees may also apply.

It was the sender (not the recipient) who provided the indemnity for possible cashing of the missing draft. I think the sender was at fault for not insuring the UPS shipment for 3% of the draft's value. UPS would have paid out 3% to the sender. The sender would spend the 3% on the premium for an $840,000 indemnity bond to TD for the bank draft. TD would have then provided another bank draft.

Would the car dealer accept a wire transfer to their bank account instead of a bank draft? More expensive. TD charges $50 for wiring $10,000 to $50,000.

January 29, 2018
7:11 am
CHUCK21
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I AM ALSO DISAPPOINTED WITH ALL THE FEES THEY CHARGE. I HAVE DECIDED TO GET OUT AS SOON AS POSSIBLE. IF YOU DON'T WANT TO PAY THE $20.00 ETF CHARGE THEY'LL SEND YOU A CHEQUE. WATCH OUT FOR THE FEE THEY CHARGE FOR THAT.

THEY CALL ALL THESE FEES SERVICE CHARGES THAT CREDIT UNIONS CHARGE BUT DUCA DOES NOT NICKLE AND DIME THEIR CUSTOMERS.

BE CAREFUL HERE.

PLEASE EXCUSE THE CAPS, I'M A HALF BLIND, ONE FINGER TYPER WITH TREMORS.

January 29, 2018
10:54 am
JenE
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I LIKE YOUR UPPER CASE POSTS, CHUCK, SO MUCH EASIER TO READ.sf-smile

January 29, 2018
6:07 pm
Norman1
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Both Internet Explorer and Google Chrome web browsers can zoom and unzoom to increase or decrease the size of text.

That can be done by operating the mouse scroll wheel while holding down one of the Ctrl keys on the keyboard.

January 29, 2018
6:56 pm
2of3aintbad
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I assume that Norman1 means ctrl and "+" to magnify.

January 30, 2018
12:41 am
Rick
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2of3aintbad said
I assume that Norman1 means ctrl and "+" to magnify.  

Both methods work. Firefox just has a +/- on the menu bar that shrinks to 30% or zooms to 300%

January 30, 2018
7:58 pm
Norman1
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I actually mean Ctrl and the mouse scroll wheel. The Ctrl and the "+" and "-" on the numeric keypad (not the regular "+" and "-"keys) zoom in and out as well.

A third way is available in Internet Explorer when one enables the status bar on the bottom of the window. On the right end of the status bar, there is a zoom selector that defaults to 100%.

February 4, 2018
7:07 am
CHUCK21
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THANKS ALL FOR THE INFO.
I USE CAPS MOSTLY BECAUSE I'M TOO LAZY TO KEEP SHIFTING WITH ONE FINGER AND THINKING ABOUT WHEN TO DO IT.
I THINK THAT WHOEVER DECIDED THAT CAPS WAS NOT APPROPRIATE HAD ISSUES.

February 4, 2018
10:08 am
Rick
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CHUCK21 said
THANKS ALL FOR THE INFO.
I USE CAPS MOSTLY BECAUSE I'M TOO LAZY TO KEEP SHIFTING WITH ONE FINGER AND THINKING ABOUT WHEN TO DO IT.
I THINK THAT WHOEVER DECIDED THAT CAPS WAS NOT APPROPRIATE HAD ISSUES.  

Personally, no big deal. I equate it to the person yapping on the phone in the back of the bus that doesn't know how to use their "inside voice". Life goes on. Although, my first thought is always "why is this poster yelling ?" And I NEED A/C for proper accentuation, so how can we express/perceive emphasis or actual "yelling" if everything is in caps? Like everything else on the internet, it has generated passionate discussion not worthy of the attention.
https://hubpages.com/technology/What-People-Think-When-You-Type-in-All-Caps

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