The Current - Scammed and the bank won't help? Here's what you can do

Episode Date: September 24, 2025

Canadians lost a whopping $647 million to fraud last year. Most scams involve money taken from your bank accounts or investments. But few victims of fraud get their money back from the bank. Sarah Bradley, Canada's Ombudsman for Banking Services and Investments, explains what the rules are, what your rights are, what to do if you've been scammed — and how not to get scammed in the first place. 

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This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. I don't think people understand when they go, oh, these people, they're so dumb, they get taken for their money. It's not that simple. There's a weird trauma that goes along with it. There's a shame that people get. They don't want to talk about it.

They don't want to go through the hassle. And it is exhausting. Last week, we brought you the story of Melissa Plet. This summer, scammers got access to her bank account, stole over $14,000. The bank is refusing to reimburse her. Canadians lost a whopping $647 million to fraud last year, according to the Canadian Anti-Fraud Network. This is just a fraction of all fraud, because so much of it goes unreported.

Most scams involve money taken from your bank accounts or your investments, and in a moment we'll hear about what you can do to keep your money safe, and what recourse you have if you've had money taken fraudulently from your accounts. But first, after that segment aired, many of you wrote in with your experiences of being scammed. The current senior producer is here to help read some of your mail. Karen, good morning. Good morning, Matt. So Maureen Sparrow from Oliver B.C., wrote about her experience getting scammed. She had $2,800 stolen from her bank account. She battled with her bank to get it back, but has yet to see the money. She's since switched to banking with a credit union. She writes,

I will never trust a bank again. And although I consider myself careful, I have come close to being scammed again more than once. On one occasion, I have the exact same experience. I have the exact same experience is your guest, and was saved when someone from the credit union called and put a stop to it. I'm disabled, so shopping is really difficult, and I purchase many of the things I need online, but that is getting difficult. I've had my credit card compromised twice in the past six weeks, and I'm thinking I may have to use a shopping service instead. Hisham wrote this to us. Recently, my bank allowed four fraudulent withdrawals for my checking account. Each time, money was taken out using checks that did not carry my signature or authorization. Despite

this, the bank still processed them and released funds. What troubles me most is how such transactions could be approved without even the most basic verification, my signature. I am sharing this because I think it's not only my problem, but potentially an issue that many other people could face. Banks are supposed to safeguard our money, yet my experience shows that the system may not be as secure as we assume. Margaret Gilbert wrote to us to tell her about her story of being scammed. I received a WhatsApp message for my son just after we'd agreed we'd use that app for his imminent trip to Africa. After a bit of general chat, he said he'd broken his phone, and it couldn't be fixed for a couple of days. After a bit more chat, I'm sympathizing with the

inconvenience. He said, it was particularly inconvenient because he needed to e-transfer some money. I said, I just got my pension check so I could help. We agreed I would e-transfer $2,450 to his contact, which I did, before he left for his African vacation. spoke and I commented on how I hoped all was okay with his phone. He assured me it was no problems. I realized I was probably scammed. He assured me I was. So I called my bank and reported to the non-emergency number for the police. Not much hope was given to me, but both said they'd investigate. Within a couple weeks or so, I heard back from the bank and the police saying there was nothing more they could do. This was in February of this year, and all I can say in

a positive light is that I am so cautious now. And though the loss of that amount of money hurt me for a while it didn't ruin me. Finally, Natalie wrote to say her dad, who's in his 80s, was scammed out of $200,000 last year. She writes, he's still working to catch up since he has a small business and does not have a pension. The bank also claimed no fault in terms of their responsibility. To some of your letters on this issue, Karen, thank you very much. You're welcome. Karen Marley, senior producer here at The Current. As I mentioned, Canadians are losing huge amounts of money, sometimes they're life savings to scammers. And a lot of those scams involve money taken fraudulently from the bank accounts of Canadians.

Sarah Bradley is the ombudsman for banking services and investments in Canada. She's in Toronto. Sarah, good morning. Good morning. How familiar are those stories when it comes to the things that you know about Canadians being scammed? Unfortunately, Matt, they're very familiar. We've seen so many complaints about fraud in recent years. we've gone from seeing a couple of hundred complaints a year about fraud, you know, in the pandemic period, to almost a thousand complaints about fraud last year.

How many of those complaints that you receive? And people might be complaining about all sorts of things when it comes to a bank. But how many of the complaints that you receive do you think are about fraud? Those were the complaints about fraud, I'm afraid to say. It's about 40% of our complaints that we receive at OBSI are from. Consumers who are complaining about fraud, mostly e-transfer-related fraud, but credit card fraud, debit card fraud, check fraud, as one of your listeners wrote in about, it's distressingly common. And so if somebody feels that they have been ripped off and that they are not pleased with the response from the bank, they contact you, what can you do to help them? Tell us about your role and ostensibly what it's meant to provide to people who. who've been defrauded?

Yeah, so we're an independent not-for-profit organization. Banks are required to offer our services to their clients. And so when a consumer reaches out to us, we will, of course, make sure that we have all the information from the consumer that we require. We'll then reach out to the bank. We will find out what their side of the story is. Often that involves getting various reports and things from the bank.

Sometimes it involves listening to recordings or looking at video or whatever is necessary to get to the bottom of what has happened. And then we will make a recommendation about what a fair outcome to the case is. So we'll apply the law, we'll look at the facts of the case, and, you know, and, you know, and then determine what a fair outcome is. Let's walk through that process. You said that you will look at the law. What does the law say about whether banks need to reimburse their customers if money is taken fraudulently from their accounts?

The law doesn't actually say very much. The Bank Act is the law that applies and the regulations under that. There are specific requirements that apply to credit cards, and there's a limited liability regime in place for credit. credit cards. There's also a, it's a voluntary code, but it's banks are required to comply with it, which is called the debit card code that has some obligations in it. And there's the seniors code, if the complainant is a senior, there's some obligations in the seniors code around protection. But frankly, it's not a lot. When the law doesn't, and the regulations don't cover the situation

that a consumer is complaining about. We need to look at the agreements that are in place that the consumer and the bank have entered into. And generally speaking, those put a lot of obligations on consumers around how they're required to protect their information and don't provide a lot of protection to the consumer. Let's talk a bit more about that. Again, when I spoke with Melissa Plet last week,

she talked about how $14,000 plus was taken from her account and we went through the fine print of her agreement between herself and her bank. What do those rules say? Under what conditions do the bank's own rules say that they need to reimburse victims of fraud? Well, you know, you did the right thing looking at the specific words of the agreement because every bank has its own form of agreement and they're all a little bit different. But in general, the bank agreements require consumers to pre-examines. protect their confidential information, to protect their physical cards, to be cautious about their

pin and their, any one-time passwords or whatever that they might receive from the bank. So there's a general obligation to keep things confidential. And I'm probably not able to ask you about specific cases, but with her case in particular, I mean, the reason that she got ripped off was because people had access to her account and somehow had access to the app. And she logged into the app. money was moved when she thought she was dealing with the bank. She was quite convinced because of the secure app that she was working with the bank. And when we looked at that fine print, it talked about how if she had been the victim of coercion,

if money had been moved out of her account through trickery, those are the words that were in the fine print, that the banks would reimburse her. Does that sound reasonable in terms of what you know about what's in those agreements? I think that would be a fairly typical type of wording in an agreement. I mean, I can't speak to any specific case, but what we see in these cases, similar to your listeners, is that one way or another, the consumer has shared their confidential banking information. Sometimes they do it knowingly, but they think that they're dealing with the bank, but they're not or a police officer or whatever. And then sometimes they don't know, and they've clicked on a link or they've done something.

that has given a criminal access to their phone or their computer, whatever device they're using. And so somehow, though, their confidential banking information is being shared. Sometimes it seems that the criminal can see what's on the screen of their phone or see what's on the screen of their computer or can see what they're typing. There's a lot of different mechanisms there. the problem is is that the banks are holding people to a standard of, as you read out, like coercion, trickery, etc.

And the Bank Act, when it's credit cards, has a requirement around gross negligence. But a lot of people, when they're victims of these frauds, are conducting themselves in a way that they think makes sense, that seems reasonable at the moment. So they don't believe that they've been grossly negligent. And, you know, I have to emphasize that the sophistication of these frauds, of these criminals is, yeah, it's quite unbelievable. And so people can be, I think, behaving in a perfectly reasonable manner and still fall victim to fraud.

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service, destination-focused dining, and cultural enrichment, on board, and on shore. With a variety of voyages and sailing dates to choose from, now is the time to explore Europe's waterways. Learn more at viking.com. And so that goes to the heart of what we're talking about, which is the responsibility and the role of the banks. I mean, again, what we heard from one of those letter writers, Hisham, is that banks are supposed to safeguard our money, and yet my experience shows that the system may not be as secure as we assume. How often do banks reimburse their clients, as you understand it, who are victims of fraud?

It's, I'm going to say it's, my experience is limited to what we see coming to OBSI. So banks do resolve a lot of complaints directly with their customers, and that's the first line of complaint, of course, for anyone who's been a victim of fraud, is immediately let the bank now immediately escalate within the bank. And so a lot of disputes are resolved at that point. When people have come to OBSI, it's because the banks declined to reimburse them for the money that they've lost. So that's the starting point for us.

And through our process, what we see is about 1 in 5, about 20% of consumers are receiving some form of compensation in these cases. You make a recommendation to the banks as to what they should do after you do your investigation? Yes. But it's not binding, right? It's not binding, but we do have a track record of 100% compliance over the last 30 or so years that we've been doing this. So banks do tend to follow our recommendations. But do you have any power to force them to reimburse customers?

No, we don't. If a bank, though, were to refuse one of our recommendations, what we do is we will publish our findings. And as I mentioned, we've never had to do that against the bank. We have done it against some investment firms over the years. Banks do tend to comply with our recommendations. Why should any customer pay?

Again, to your point, I mean, this is a system where the scams involve bad actors who gain access to banks' networks, perhaps, networks that the banks are responsible for. The suggestion from some people that we've heard from is that it's a system that blames the customer when money has been taken under their accounts wrongfully? Why should the customer have to pay at all?

I think this is at the heart of the matter, right? And we have to keep in mind that these frauds are being perpetrated by criminals. The money that is extracted is going to fund all sorts of, you know, horrendous criminal activity in Canada and around the world. The goal for everybody, everyone involved in this, system needs to be on preventing these frauds from being successful. Do you think that banks are doing enough? The Canadian Banking Association sent as a statement that reads in part, banks are united in their commitment to protecting customers and communities from fraud by continually

strengthening their cybersecurity and fraud detection measures. What we hear from customers is that they feel they are being blamed for what goes on. Do you think banks are doing enough to stop fraud? You know, I think that it's true that banks are doing a lot, that they, They are investing in protection measures. But as we've seen, as you've seen, as your listeners have heard, and certainly as we see at OBSI, there's a lot of people who are falling through the cracks in those protection measures. And so that indicates to me that more needs to be done.

And it could be done by the banks, by consumers. I think it's important if we're going to actually. actually meaningfully reduce the amount of fraud that's happening. There is a lot of gatekeepers that can be doing more. I think the banks could be doing more. I think the telecom companies and the technology companies that are whose systems are also being used to perpetrate these frauds, like need to be a part of the conversation. I think it's something that the government, I believe, is looking at. They did a public consultation last year proposing a range of possible policy measures that might be put in place. So we know that the government is looking at it and

hopefully they're going to be implementing some solutions soon. Do you think there should be maximum liability for people who are ripped off that they, if the banks aren't going to fully reimburse them, that they are only responsible for a certain amount? Well, that's one of the solutions that the Department of Finance had suggested. And banks have pushed back on that, right? Yes, they have. It's a solution that we see in other countries as well. I want to be clear, this is not a unique Canadian situation. This is a scourge around the world. We talk to financial ombudsman in other countries, and they're dealing with very similar rates of fraud and devastating consequences. But to your point, the fact that other nations have that maximum liability and that banks here have pushed back on that, what does that tell you? You know, the maximum liability is, I think, a part of a potential solution. And I say that for a couple of reasons. It's that it will, number one, level the playing field for Canadian consumers. You know, different banks have different mechanisms and protections in place. Consumers have no way of knowing, really, how good or bad a bank's protection measures are. So there's no way of choosing banks on that. basis. So it'll help with that. It'll also help to inspire the banks to innovate in this

space in terms of offering extra protections, different types of features, special accounts from which very limited withdrawals can be made, maybe ratcheting back some features like global money transfer and other things. So I think there's a lot of positive benefits that could come from liability. Obviously, it would provide relief to more fraud victims. But hopefully it would be a part of the solution to about preventing more frauds, because that's got to be the key, right? So helping banks to make those decisions, to invest more, to do more, to be a part of that system is important. I do think, though, we really shouldn't let the telecoms and technology platforms off the hook either. Those are very profitable enterprises that are like literally earning profits

from the modulent activity as well. Absolutely. Can I just ask you about your own organization? There's been criticism of the OBSI because on the board of directors are a couple of members, at least, who have ties to the banking industry, including the chief operating officer for one of the big banks in this country, BMO Financial Group. What message does that send to people who think that the system is stacked against them? I think it's important to note that there are a minority of industry directors on our board of directors. But members of the industry that we're talking about?

Yes. We have a 10-member board, and three of those individuals are currently working with industry, and the other seven are not. The industry directors do bring some expertise and some important links to key stakeholders for us. We also, though, have three consumer interest directors. These are directors who have special expertise in advocacy for consumers. I guess the question is just what the message that would send to the people who say that the system blames the customer when money is taken to their accounts.

I think when it comes to our board of directors, what we have is balance. And we are an independent organization. We are not tied to the banks in any way. And when we make recommendations in a particular case, it comes from our view, our independent view, of what is fair in all the circumstances of the case. And so I do think it's a system that consumers can have confidence in. Let me just end with this, which is I think anybody, I said in the introduction, who lives in this country who does banking, either has been the victim of a scam, has somebody who has tried to scan them, or knows somebody who has been scammed. What is your advice? Knowing what you know, what is your advice to people to make sure that they don't end up being ripped off? This is absolutely key, is helping people to protect themselves, because that's the first line of defense.

I would say, number one, never share your banking credentials, pen passwords, one-time passwords, even if it seems like it might be coming from a bank or the police or a trusted, a trust. trusted third party, never do that. If it's be skeptical, sign yourself up for e-alerts, go online, check how your settings are set and put it down to sort of the minimum threshold so that you're getting e-alerts whenever there's activity in your account. You want to keep monitoring those accounts so you'll know if something is happening in your account so you can alert your bank immediately. And that's also key. Report that any suspicious activity right away. And be fraud aware. That's really important. But to your earlier point, it's criminal activity that's happening. We need to be aware of it. We need to do everything we can to protect ourselves. But at the end of the

day, there needs to be more done to prevent that criminal activity from happening in the first place. Sir Bradley, it's good to speak with you. This is, as I say, an issue that so many of us are very intimately familiar with, whether it's ourselves or family members. Thank you so much. Thank you for focusing on this important issue. All the best. Bye-bye. Sarah Bradley is the ombudsman for banking services and investments. She was in Toronto. For more CBC podcasts, go to cbc.ca slash podcasts.