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Zag's systems continue to be flawed
June 4, 2016
11:47 am
edarte
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From the start I have had issues with the flaky systems/processes that Zag uses and those issues continue.

About a week ago I entered a future transfer to move money from Zag to CIBC on June 3rd. Today On June 4th I went online and saw that my balance had not been reduced by the expected amount. So I looked at the transfers and see in the "Transfer history" that the transfer was done on June 3rd. They have a "Pending Transfers" category but nothing shows there (nothing ever shows there in my experience). So I can't tell if the transfer was lost or voided because the last transaction is my account is the interest paid on May 31 and the balance has not been reduced by the transfer amount.

So I call Zag and after a lengthy delay the customer rep tells me that yes, the transfer is in process.

I then had a little rant with the poor guy complaining about this problem and how I have had problems months ago and their system is still flaky and nothing ever seems to improve.

I asked him to please raise my complaint with whomever is responsible for this . He was very patient and polite and admitted "yes, their systems could be better" :-)

If you can't trust the systems of a bank you can't trust the bank.

June 4, 2016
12:06 pm
Bill
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I agree, you initiate a transfer and it doesn't ever seem to show up in the pending, though I usually don't check every day. I've found it's best to assume it worked (I've never had a case where it didn't) and give it some extra time. For example, this week I initiated a transfer from Zag on Monday morning (maybe they had a "run" on withdrawals due to their interest rate decline) and the funds hit my external bank account Thursday evening. My Tuesday a.m. transfer hit Friday evening. My Wednesday a.m. transfer has still not shown up, it's still in transit.

June 4, 2016
3:14 pm
Norman1
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I would give Zag two business days (not including Saturdays and Sundays). Usually, everything unfolds as expected in that time.

My last transfer did show up in Pending immediately after I submitted it. Next day, it disappeared. Nothing posted to the Zag account. The following day, the transfer was posted to the Zag account.

Perhaps, behind the scenes, Zag has something like CDF's "2-day transfer" system that speedwagen wrote about.

June 4, 2016
6:03 pm
Loonie
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I'm wondering if people still find Zag worthwhile.
There are now 9 FIs on the Comparison Chart (plus EQ =10) which give better savings interest, and some have no insurance limit.
I never joined it so I'm just curious if you are finding something else compelling that makes you want to stick with it. Perhaps I missed something.
Sounds lik Bill is pulling all of his $ out.

June 4, 2016
6:58 pm
Bill
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I'm not a good bellweather, I'm completely disloyal with the high interest bank accounts portion of my money and I'll put it wherever it's getting the best return (subject to CDIC limits) that day so quality of service, how happy or mad they make me, or any other factors are all totally irrelevant to me, do not factor into where my money sits. The downside is I've got a lot of these accounts so I have to keep careful records plus I make sure to do at least a $20 transaction every year for every account to keep any of them from going into "dormant" status. But I've got time, most folks I know are busier than me.

June 5, 2016
9:37 am
Norman1
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Loonie said

I'm wondering if people still find Zag worthwhile.
There are now 9 FIs on the Comparison Chart (plus EQ =10) which give better savings interest, and some have no insurance limit.
I never joined it so I'm just curious if you are finding something else compelling that makes you want to stick with it. Perhaps I missed something.
Sounds lik Bill is pulling all of his $ out.

I don't think Zag has much going for it now that their 2½% rate offer is over.

Their savings account rate has dropped to 1.65%, which is below EQ Bank's 2.25% and the Manitoba credit unions' 1.70%.

June 7, 2016
3:43 pm
semi-retired
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Another problem with the way they do things.I just updated my Zag statement for May.I had purchased 2 2year GIC's on May 22 for the 2.50% rate.My statement doesn't include either one.They show up on your summary page when logging into your account.I contacted Zag & was told they don't include this info about your GIC.s on your monthly statement.It will be on a year end statement only.It would sure be nice to have a full disclosure statement like Peoples Trust or Tangerine with all your accounts listed.I had to print off the info on the GIC's to have at least a *paper trail* in my files.How hard could it be to add this info on each monthly statement???

June 7, 2016
3:54 pm
AltaRed
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I guess because GICs are investments and bank accounts are not. I would have thought though that investment accounts are supposed to have at least quarterly statements (if no activity).

June 7, 2016
4:07 pm
dentgal
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I still find Zag worthwhile--even if they are incredibly difficult when it comes to opening joint accounts. I was able to get 3 GICs with my kids just under the wire. So, for 2.5%, it's worth it to be there--unless the interest rates spike up, in which case i'll regret locking in! But what was a bit surprising is that they put the interest on the GIC into your savings account (currently at 1.65%), so you are not compounding at the 2.5 rate!! What a rip off!!

Anyone get the "special" from PC today--2.25% from June until Aug 31st?? This is why I took the 2.5---it's a higher rate and easier than bouncing the money all over the place!

June 7, 2016
4:33 pm
Norman1
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dentgal said

… But what was a bit surprising is that they put the interest on the GIC into your savings account (currently at 1.65%), so you are not compounding at the 2.5 rate!! What a rip off!!

That is odd. This is from the Zag GIC terms and conditions:

Interest

Interest is calculated daily, compounded monthly and paid depending on the payment option selected for 1 to 5 years terms (either monthly, semi-annually, annually or at maturity). …

Could the GIC be set up to pay out the interest monthly by mistake, instead of accumulating and compounding until maturity?

July 2, 2016
6:53 am
ertyu
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Another "Interest Adjustment" this month.
I also noticed that when I cancelled a Pending Transfer, it then showed up in the Transfer History looking like it was completed.

July 3, 2016
12:18 pm
Norman1
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ertyu said

I also noticed that when I cancelled a Pending Transfer, it then showed up in the Transfer History looking like it was completed.

Zag's Transfer History is a history of transfer requests and not transfers.

I had submitted a recurring weekly transfer request that would last four weeks. There was only one entry in the Transfer History for the transfer request. There wasn't four entries for each of the actual transfers.

August 4, 2016
6:40 pm
Just the facts
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Hello. This is my first post.
I just wanted to reiterate what "dentgal"said on her June 7, 2016 post."… But what was a bit surprising is that they put the interest on the GIC into your savings account (currently at 1.65%), so you are not compounding at the 2.5 rate!! What a rip off!!"
I went a bit further and spoke with 4 different Zag Bank Representatives, proclaimed as having progressively higher authority. I referred them to their Terms and conditions, as well as walked them through their website for opening a 2 year 2.5% GIC with interest paid monthly. The first 3 Reps agreed that there is no indicator alerting the client that the interest would be paid out into the 1.65% savings account. Unfortunately, the senior Representative was matter of fact and said that since it is a closed fund, they can not change it. END OF STORY. I am going to pursue this with Ombudsman for Banking Services and Investments (OBSI). I feel that ZAG BANK expended a great deal of effort in zig zagging from the issue, rather than fixing it. It is unfortunate they are so sleazy and do not care about their customers.

August 5, 2016
6:27 am
Bill
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Just the facts, I'm not clear, what are they supposed to fix?

Their terms and conditions for GICs say "Interest is calculated daily, compounded monthly and paid depending on the payment option selected for 1 to 5 years terms (either monthly, semi-annually, annually or at maturity)."

So if you select a payment option for interest of monthly then the interest will be paid out monthly. Did you want a monthly cheque instead of it being deposited into your savings account?

August 5, 2016
8:00 am
NorthernRaven
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Add least currently, the online GIC account creation process has a popup for "How often would you like your interest paid?". If you want it to keep compounding, you would choose the "At Maturity" option. Otherwise, you choose to have accumulated interest paid monthly, semi-annually, or annually. It sounds like "just the facts" has a monthly payment option. Whether they selected incorrectly, or the option was not available or presented less clearly for past applications, I don't know.

Various payment options are not uncommon, as some people want the income, while others are making an investment. Some institutions offer fractionally lower rates for GICs that pay out rather than compound.

Once the GIC is established, their systems probably aren't designed to twiddle the parameters.

August 5, 2016
10:47 am
Loonie
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It would seem to me that what they need to fix is the confusion between "compounded monthly" and a "payment option" of "monthly".

A reasonable person who doesn't work in the banking industry and has little experience with this sort of thing might conclude that the monthly payments would go into the GIC, as that's the only way it could be "compounded monthly".

August 5, 2016
12:46 pm
Just the facts
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Hello Bill, NorthernRaven and Loonie. I appreciate your feedback with regards to my rant towards ZAG BANK. I apologize for not being clear. I am not in the banking industry, however I have held many GIC's. This is the first GIC I have held where the Interest generated is sent to a different account without my authorization or awareness. When I initially set up the account, the system did offer a choice of how often I would like the interest paid. Nowhere was there ever any indication that the interest would be paid out, only language stating it would be paid.
ZAG GIC -Terms and Conditions
Interest is calculated daily, compounded monthly and paid depending on the payment option selected for 1 to 5 years terms (either monthly, semi-annually, annually or at maturity)

I was hoping that ZAG BANK as a minimum would confess that their system is misleading.
If they were serious about customer relations, they would modify the website to alert clients, as to where the interest is going.
I sent a note to the Ombudsman, however do not expect any satisfaction, since the Ombudsman is paid by the banking industry.
I expect a higher standard from Canadian institutions.

August 5, 2016
1:35 pm
Bill
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Northern Raven, not sure it's a "system" issue in this case. When two parties enter into a contract for a GIC both are bound by the terms and conditions they agreed to at that point.

August 5, 2016
3:08 pm
Loonie
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I think Just the facts has a valid issue. I don't see how they can say it's compounded monthly when it's not.
The Ombudsman can and sometimes does make recommendations in favour of the client. However, as I understand it, the individual banks are not obligated to follow them.
It isn't going to be a huge amount of money, so you might have a chance.
Good luck!

August 5, 2016
3:23 pm
NorthernRaven
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Just the facts said

This is the first GIC I have held where the Interest generated is sent to a different account without my authorization or awareness. When I initially set up the account, the system did offer a choice of how often I would like the interest paid. Nowhere was there ever any indication that the interest would be paid out, only language stating it would be paid.
ZAG GIC -Terms and Conditions
Interest is calculated daily, compounded monthly and paid depending on the payment option selected for 1 to 5 years terms (either monthly, semi-annually, annually or at maturity)

I was hoping that ZAG BANK as a minimum would confess that their system is misleading.
If they were serious about customer relations, they would modify the website to alert clients, as to where the interest is going.
I sent a note to the Ombudsman, however do not expect any satisfaction, since the Ombudsman is paid by the banking industry.
I expect a higher standard from Canadian institutions.

I haven't bought a GIC from Zag. But this is how the current Zag online screen works:
ZAG GIC screen

You would choose "At Maturity" for fully compounding interest, otherwise one of the payment options if you wanted payouts at certain intervals. I don't think I've ever seen your distinction between interest "paid" and "paid out". "Paid" would generally imply monies are being extracted from the GIC and placed into the customers hands in some form. They correctly state that the interest is calculated daily and compounded (not paid) monthly, as in "included with the principal for interest calculation purposes". Paid is separate, and you are merely stuck with a payment option you don't want (monthly) rather than the one you do (at maturity). There doesn't seem to anything misleading. With the current online application you would have to explicitly have chosen the payment option; I don't know if it was somehow different when you arranged for your GIC.

Bill said

Northern Raven, not sure it's a "system" issue in this case. When two parties enter into a contract for a GIC both are bound by the terms and conditions they agreed to at that point.

There would be nothing to prevent the two parties from agreeing to change the terms - there isn't an outside force binding them. But GICs aren't designed to be modified, so their software probably wouldn't have features that would let staff do this, not to mention audit control and whatnot. They might have to cancel out the GIC and reissue another with the new terms, or at least do a bunch of non-standard stuff they aren't going to be disposed to doing just for a few bucks for a customer.

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