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Neo Financial Concerns
August 20, 2021
2:00 pm
reality
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FYI Neo Financial has anonymous forum member(s) and monitors this forum closely so keep that in mind when reviewing responses or external explanations to this post. I rarely post but felt everyone needs to be aware of what has/is happening with this non-bank.

I applied (online) for and opened an account with Neo in March. After reading here that you could now activate your savings account online which I prefer for security instead of via mobile I proceeded. I uploaded the front and back of my drivers license and the selfie requested after which I got a screen saying unable to confirm and to call into support. Here is where it gets interesting and in my opinion a lot more worrisome.

I attempted to call Neo's support line many times from my blocked personal cell number and was disconnected or it rang once and was disconnected without explanation. This is problematic for the only support/contact number Neo has. I was very concerned because I had uploaded my driver's license, selfie, plus other personal information they already had originally. I finally tried via my landline that is not number blocked and got through. The agent answering the call put me on hold to find out why the savings portion of the account did not open successfully. Nobody at Neo support could answer why and I was told I would be called back the next day with answers. I explained that if they needed calls accepted only from non blocked numbers there was ways to accomplish this other than simply automatically disconnecting. I also wanted to know how I could link external accounts. I was told this was accomplished via screen scraping where you enter your user name and password from your current bank on Neo's page. I expressed my concern because I have learned from this forum and others that there are serious security risks via this method and asked if they had an alternative. When I asked, I was told the call was recorded and I asked if the call could be listened to by technical personnel so that I would have the correct answers to my questions. I was assured it would be.

Fast forward 2 days later and still no call from anyone at Neo, very very concerning because they were in possession of sensitive personal information. If they can't or won't answer simple questions regarding security etc. or try to improve their processes this is a giant red flag. Maybe there was a glitch in the process and everything in my account was now set up and I would eventually get an apology call or something of that nature later. NOOOO, when I logged onto my account I got a screen telling me my account was FROZEN and to contact support. Okay I called from my cell and got the obligatory auto hang up before I realized I have to call from my landline. Frustrated I explained the whole story AGAIN to the agent and said why don't you just read the notes on my file or listen to the recording instead of me having to repeat the whole fiasco again. After holding for several more minutes he said Neo is refusing to open an account for me. I said I have had an account since March. I asked several times and he refused to explain or answer why. Understand I now have absolutely no faith in the security protocols or systems in place much less customer transparency of Neo Financial and was thinking that's fine I need to bring this to federal regulators. I told the agent I would be going to the federal regulatory agency responsible and bring up these issues and I requested they please remove ALL my information from their servers and anywhere else it might be stored. HE REFUSED!!!!

Beware of Neo Financial! What a class act, you have been warned...

August 20, 2021
3:01 pm
Loonie
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Thanks for your report.
I had already decided, based on some previous forum reports, that I wouldn't deal with them.

Are you still going to try to complain to a regulator about them? If so, which one? As I recall, we had a discussion about what sort of entity they are. They aren't a bank or a CU so may evade the usual regulations. It is my understand that, if they were a bank, they would be obliged to give you a written reason for refusing to open an account for you - but they're not b bank.

How do you know they have anoonyous forum members?

August 20, 2021
5:03 pm
reality
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Loonie said
Thanks for your report.
I had already decided, based on some previous forum reports, that I wouldn't deal with them.

Are you still going to try to complain to a regulator about them? If so, which one? As I recall, we had a discussion about what sort of entity they are. They aren't a bank or a CU so may evade the usual regulations. It is my understand that, if they were a bank, they would be obliged to give you a written reason for refusing to open an account for you - but they're not b bank.

How do you know they have anoonyous forum members?  

You're welcome Loonie, as I said I don't often post but this was so bizarre and wrong that I felt compelled to post a warning.

I will look at filing a complaint next week and will speak with banking regulators first because Neo claim CDIC and bank backing. If banking regulators can't act consumer and financial affairs certainly can and will. I can't imagine the bank backing them will be happy with the negative publicity. Next week if I am still as angry as I am now I know a reporter or 2 that would love to have a nice current story about a FinTech (read non-bank) company trying to be one of the first in open banking before it is a thing in Canada. I'm sure Ms. Freeland would be very interested especially after what I recently read about her current interest in the subject .

I can't get into how I know about what I said regarding certain forum member(s) but that part of my post can be taken as a simple warning. I'm not suggesting you are but if anyone is naive enough to believe that this forum is not being monitored by Banks and FIs etc. or that they don't attempt to exert influence and acquire free data and feedback you are sadly mistaken.

August 21, 2021
1:48 am
Loonie
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It seems the rules for fintechs in banking haven't even been rolled out yet, so I'm puzzled as to how they even exist except in a kind of "wild west" scenario.

Let us know how you make out!

August 21, 2021
7:02 am
Alexandre
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I do understand why FI behaves the way it is, I do not understand why OP behaves the way he is.

There is nothing sinister in how Neo Financial operates, and there is logical explanation for every part of what they are doing.

Specifically, "I was very concerned because I had uploaded my driver's license, selfie." This is valid concern for many people, but OP should not have done that in the first place if he was concerned.
Now that this information is uploaded, assume it is available to anyone and forever will be. Sorry, it is the Internet.

As for Neo to refuse to delete that information, they may have legal reasons for that, and also they may have shared it with Concentra already and can't promise anything on behalf of it.

August 21, 2021
8:52 am
smayer97
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Alexandre said
...
Now that this information is uploaded, assume it is available to anyone and forever will be. Sorry, it is the Internet.
... 

That is a bit misleading of how the internet works. Banks all use secure connections between your computer and their website (as most sites do nowadays; look for https:// in the url for confirmation) such that transmission of anything between those 2 points is fully encrypted such that only the bank receives the unencrypted data.

August 21, 2021
1:40 pm
Vatox
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I’m curious, was OP aware that Neo Financial wasn’t a bank or cu and that Concentra was the entity backing the accounts?

August 21, 2021
8:27 pm
Norman1
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Concentra Bank is only backing the Neo Savings account.

The Neo Mastercards are issued by ATB Financial. ATB Financial is fronting the money for the charges until the cardholder pays the balance card off.

This is the fine print at the bottom of their home page:

The Neo Savings account is provided by Concentra Bank, a CDIC member institution, and is eligible for CDIC deposit protection. Deposits held in Neo Savings accounts are combined with eligible deposits held at Concentra Bank, for up to $100,000 of deposit protection, per category, per depositor.

Cards issued by ATB Financial pursuant to license by Mastercard International Inc. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Inc.

August 21, 2021
9:04 pm
Vatox
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Norman1 said
Concentra Bank is only backing the Neo Savings account.

The Neo Mastercards are issued by ATB Financial. ATB Financial is fronting the money for the charges until the cardholder pays the balance card off.

This is the fine print at the bottom of their home page:

The Neo Savings account is provided by Concentra Bank, a CDIC member institution, and is eligible for CDIC deposit protection. Deposits held in Neo Savings accounts are combined with eligible deposits held at Concentra Bank, for up to $100,000 of deposit protection, per category, per depositor.

Cards issued by ATB Financial pursuant to license by Mastercard International Inc. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Inc.

  

Lol, so Neo is nothing then. Just a portal. Then they deserve only my name and account number from Concentra.

August 22, 2021
5:53 am
Loonie
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It seems, though, like they are the ONLY portal. I don't get the impression you can call up Concentra or ATB and deal with your account directly. If so, that would make Neo more a barrier than a portal in my way of looking at it.

August 22, 2021
10:50 am
Vatox
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Loonie said
It seems, though, like they are the ONLY portal. I don't get the impression you can call up Concentra or ATB and deal with your account directly. If so, that would make Neo more a barrier than a portal in my way of looking at it.  

If this is the future of online banking, they will have to create some serious regulations.

August 22, 2021
11:21 am
Loonie
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I agree, but, like so many regulations, it could be the tail wagging the toothless dog. The fintech industry is actually asking for a hurry-up with the regs, which suggests to me that they don't want serious scrutiny.

Has anyone looked at the report that came out on this recently from the federal advisory committee?

August 22, 2021
12:24 pm
reality
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Vatox said
I’m curious, was OP aware that Neo Financial wasn’t a bank or cu and that Concentra was the entity backing the accounts?  

Yes, after further investigation of them they are nothing more than the "Skip The Dishes" of open banking. Literally and figuratively.

August 25, 2021
8:40 pm
reality
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A little late for Neo to change policy after the fact to alter issues in effect from the previous policy but e for effort...

I tied to upload the entire new document but it was too huge (4.2 mb)

Neo.jpeg

If you have an hour to kill and want to see what they are actually up to here is a link to the entire now current policy as of tonight (August 25th 2021) that is. This was NOT the policy in effect last week by the way. I will not comment on it but if you read it I am sure you will draw the same conclusions I did.

https://www.neofinancial.com/privacy-policy

August 25, 2021
11:02 pm
HermanH
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Interesting to see that the SIN is not mandatory.

If you give us your Social Insurance Number (SIN), we may use it for tax reporting.

August 27, 2021
6:26 pm
harbottle
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My experience with Neo:
I got their MasterCard first, then opened a savings account a month later cuz they had a high interest rate. It was near instant approval (about 5 minutes). I didn't have to provide/upload a copy of my driver's licence for the savings account. However, Neo did a hard pull for the MasterCard so they already verified my identity, address, etc.

August 29, 2021
12:18 pm
LK
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reality said

I will look at filing a complaint next week and will speak with banking regulators first because Neo claim CDIC and bank backing.

1. Your savings account is with Concentra, not Neo. As noted in other replies, Neo is a tech company providing the interface between the account holder and Concentra. The CDIC coverage is through Concentra. On this topic, there are a few other threads on this site that go through the details.

2. The 'Savings Account Agreement' at https://www.neofinancial.com/savings-agreement specifies the the process re complaints. See section G. It states that you can escalate to Neo's "Head of Operations", who will "also immediately engage the Complaints Liaison Officer (CLO) at the Bank [Concentra]". It also specifies the applicable regulatory entities (OBSI and FCAC).

3. There is also a 'complaints policy' at https://www.neofinancial.com/complaints-policy, which states "The Financial Consumer Agency of Canada (FCAC) supervises federally-regulated financial institutions, such as Concentra Bank, to ensure they comply with federal consumer protection laws. The FCAC also helps educate consumers and monitors industry codes of conduct and public commitments designed to protect the interest of consumers." Again, note that it is Concentra that is the FI and federally regulated, not Neo. The fact that Concentra agreed to brand the name of the savings account after the technology provider does not change that Concentra is the bank in relation to the Neo Savings Account.

Good luck.

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