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Direct deposits to Neo Savings are placed on hold on arrival
April 12, 2021
3:39 pm
LK
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Valid points, Loonie.

Best I can surmise as someone who will not be opening a Concentra "Neo Savings Account", but is following the drama somewhat closely is the following.

The savings account is with Concentra. The CDIC coverage is with Concentra. Neo Financial Technologies (NFT) is a red herring, and their role is simply to provide the tech platform for the customer to access their account with Concentra. However, also review the Savings Agreement for all sorts of ways in which NFT can use your personal information, which you agree to because NFT only offers a mobile app (and not web-based access). One wonders if all of this is about marketing "you" and "your data" as the asset here, and that the real money to be made is by access to your personal information via Neo's app.

As to why Concentra went this route at all, good question. Their agreement to provide an account -- named by and after a tech company that is merely hosting the software interface (app) -- is on them. Potential customers who are looking at the (current) 1.55% interest rate should consider the full picture of this arrangement, and any risks and/or rewards re such. I don't see many upsides here to the consumer / customer. I see an utterly unnecessary shell game; aka as the shells move on the table, keep your eye on which shell is "the bank".

April 12, 2021
4:04 pm
Loonie
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I think your analysis is plausible, LK, but I am not very familiar with the economics of such deals.

Since the money is deposited with Cconcentra, not Neo, there is no spread for Neo to make money off. Not being privy to the contract, we don't know how the deal was structured and where Neo is making its money. Undoubtedly, Neo has been given extensive data mining privileges. They can then presumably sell this info to others or use it to build their own businesses.

I saw that Concentra Bank is having its AGM tomorrow, April 13. If anyone knows how to get into ti, please do so and report back.

I was just reading yesterday (in an actual book, audio version) where some fellow who is very wealthy from modern entrepreneurial efforts was asked what subject he thought college students should major in to give them solid careers for the future. His answer, without hesitation, was "statistics". No mention of MBAs.

April 12, 2021
4:11 pm
LK
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Loonie said
Since the money is deposited with Concentra, not Neo, there is no spread for Neo to make money off. Not being privy to the contract, we don't know how the deal was structured and where Neo is making its money.
  

My guess (speculation) is that Neo makes money off of marketing your personal information vis-a-vis what you agree to re the app. It's not likely about the money you deposit with Concentra. This is an "app only" (no web-based) savings account, so potentially personal information is (hrmmmm....) more 'fluid'? We shall never know what the financial arrangements are between Concentra and NFT re how they split the spoils. But anyone who wants to be a customer can review the many ways in which NFT / Concentra can use your personal information / data (aka read the Savings Agreement).

Such is what federal regulators should be considering regarding this bleeding-edge 'open banking' and/or 'consumer-directed finance' scenario. Frankly, we should all be paying close attention to this and raising concerns. For as this one goes, so too may future arrangements go.

April 12, 2021
5:25 pm
Alexandre
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Londonguy said

When you have a split business relationship like this, when something goes wrong with your account (fill in any scenario you'd like here), it can create a situation where the two parties involved point their finger at the other guy ... In the worst cases nobody takes ownership, leaving you twisting in the wind with each party telling you to talk to the other guy  

My money is at Concentra. My Savings account agreement is with Concentra. As long as my money is where it is, the moment I lose access to my funds through Neo app is the moment I pull them out of Concentra using PULL from my other bank where my Concentra account (serviced by Neo) is set as external account.

Tell me this won't work and I'll listen.

April 12, 2021
5:35 pm
LK
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Alexandre said

My money is at Concentra. My Savings account agreement is with Concentra.
[...]

Tell me this won't work and I'll listen.  

Agreed, noting that your Savings Account agreement is actually among three parties (you, Concentra and NFT) [pedantic point].

In addition to what you say, your CDIC is with Concentra.

As long as you're ok with all the other mumbo-jumbo legal stuff vis-a-vis the Savings Agreement, then go for it.

April 13, 2021
3:47 am
Loonie
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I agree with your concerns, LK.
It's the thin edge of the wedge.

April 13, 2021
12:55 pm
Alexandre
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Back to original topic posted by OP (i.e., me). Smaller transfers to Neo, few thousand dollars, are indeed placed on 5 business days hold. Those I sent last week were released today, 5 business days later.

$100 from each transfer to Neo is available instantly.

Transfers for less than $100 appear to be available instantly in full.

Larger transfer, in amount of tens of thousands dollars, could be put on hold for up to 8 business days, according to not so clear wording of their holds description.

April 13, 2021
3:14 pm
Londonguy
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Alexandre said
Back to original topic posted by OP (i.e., me). Smaller transfers to Neo, few thousand dollars, are indeed placed on 5 business days hold. Those I sent last week were released today, 5 business days later.

$100 from each transfer to Neo is available instantly.

Transfers for less than $100 appear to be available instantly in full.

Larger transfer, in amount of tens of thousands dollars, could be put on hold for up to 8 business days, according to not so clear wording of their holds description.  

All of that language is literally from the federal regulation that every institution has to follow (scroll down a bit and you'll find it) --

https://www.canada.ca/en/financial-consumer-agency/services/rights-responsibilities/rights-banking/cheque-hold-access-funds.html

It's still my opinion that imposing a hold on direct deposits by any bank is a bogus policy, but in the interest of being fair to Neo/Concentra, someone could ask them if it no longer applies after your account has been open for 90 days. Just a guess on my part but it might be what they're hanging their hat on.

If not, I don't see any reason for it, or why any account holder would tolerate it

April 13, 2021
5:44 pm
Loonie
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Not to put too fine a point on it, but the gov't guidelines Londonguy has cited are for cheque deposits, not direct deposits. I think the difference is significant when another FI is sending the money directly.

April 13, 2021
6:19 pm
Londonguy
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Loonie said
Not to put too fine a point on it, but the gov't guidelines Londonguy has cited are for cheque deposits, not direct deposits. I think the difference is significant when another FI is sending the money directly.  

That's part of my point -- they are citing the language of policy X for situation Y as if there's no difference

April 13, 2021
6:21 pm
LK
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See: https://www.neofinancial.com/savings-disclosure

Under Hold Policy:

This hold policy is based on regulation set by the Bank Act (Canada) and Payments Canada. When you make a deposit into your Savings Account, Neo may place a hold on your deposit on our behalf to verify that the funds will be available from the account of the other financial institution. Although the deposit will be reflected in your account balance immediately, your ability to access the entire amount of your deposit will be restricted until the hold period expires. This means that you will be unable to withdraw, transfer (ET or INTERAC ® e-Transfer) or pay bills using funds that are being held.

Subject to the exceptions below, the maximum length of time Neo will hold funds for is 5 business days for amounts under $1,500, and 8 business days for amounts above or equivalent to $1,500.

The expiry of the hold period means that you can access the entire amount of your deposit, but it does not guarantee that the cheque cannot be returned to us unpaid. You are financially responsible for any items that you deposit, and if a cheque is returned unpaid at any time (for example, due to insufficient funds, a stop payment order or a forged signature) either during or after the expiry of the applicable hold period, Neo has the right to charge the amount of the cheque or item to your account.

Etc. Feel free to read the contractual provisions regarding the Neo Savings Account. References to "Neo" are on behalf of Concentra, blah blah blah.

April 14, 2021
12:24 am
Loonie
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Londonguy said

That's part of my point -- they are citing the language of policy X for situation Y as if there's no difference  

OK. Good. That wasn't clear to me.

Similarly, the portion LK has just cited talks about holds on deposits "you" make. Is a direct deposit a deposit that "you" make? I would say not, especially if it is, for example, a pension payment, and, similarly, any direct deposit initiated from another FI.

Neo has ventured into the banking field but it seems like they don't really understand it very well. Perhaps they should go back to the courier business, which is less complicated.
It makes one wonder what else they don't understand.

As I said earlier (and this just reinforces it), if I want to deal with a bank, I will deal with a bank.

April 14, 2021
1:01 pm
Alexandre
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Alexandre said
Back to original topic posted by OP (i.e., me). Smaller transfers to Neo, few thousand dollars, are indeed placed on 5 business days hold. Those I sent last week were released today, 5 business days later.

$100 from each transfer to Neo is available instantly.

Transfers for less than $100 appear to be available instantly in full.

Larger transfer, in amount of tens of thousands dollars, could be put on hold for up to 8 business days, according to not so clear wording of their holds description.  

My large EFT just cleared, also 5 business days hold - not 8.

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