Despite ombudsman complaint, Manitoba woman not optimistic she'll get money back after bank fraud

A southwestern Manitoba woman says she was shocked when her bank accounts were emptied in a fraudulent e-transfer but she's not optimistic that a complaint to an ombudsman service will help, since only about a quarter of such complaints led to customers getting monetary compensation last year.

Nicole Roy says she lost $3,000 from her accounts at the Bank of Montreal branch in Brandon last October, just as the Thanksgiving weekend was starting.

She got an email around 11 p.m. that Friday notifying her that her account had gone into overdraft.

"I never use overdraft, so I was super surprised," Roy told CBC News in an interview.

She opened her banking app "and was extremely shocked to see my account had been cleaned out completely," she said.

She saw a reference number and the name of an unknown person associated with the e-transfer.

"I have no idea who that person is, but they were somehow able to take all of my money," she said.

WATCH | How Roy learned about the fraud:

How a Manitoba business owner discovered she'd been scammed

5 months ago

Duration 0:48

Nicole Roy, a Brandon business owner, describes the moment she learned her bank accounts had been emptied by a fraudster.

She called the phone number on the back of her bank card, but got a message telling her to call back during regular business hours.

When she called the next day and reached someone in the BMO fraud department, the response sounded positive and suggested she shouldn't worry, said Roy.

"After that conversation, I have been completely shut out by the Bank of Montreal," she said.

"They have denied that they played any role in this and that, it was pretty much 'sorry about your luck.'"

She's self-employed and operates a small business in Brandon, and says she's paid thousands of dollars in fees in her 15 years with Bank of Montreal fees she thinksought to cover things like security features.

Roy said she was advised by the bank to report the loss to police and get her cellphone checked by a computer service company for malware, which she did.

The bank's fraud department sent herits review, which suggested she must have given out her personal identification number and her bank card, she said.

"That is not the case," she said. "I would never give anyone my PIN or my card, especially to my business account, and let them clean me out."

'They're working for the bank'

She said BMO eventually gave her $500 in what it called a "gesture of goodwill," but she's still missing the remainder of her $3,000.

Asked about Roy's case, BMO spokesperson Jeff Roman said in an April 4 email to CBC News that the bank would be in touch with Roy and provide an update when possible.

In March, Roy filed a complaint to the Ombudsman for Banking Services and Investments, or OBSI a national independent, not-for-profit organization established in 1996 to deal with customer complaints about banking services or financial products. It's funded by fees from participating banks and investment firms.

But Roy is not optimistic about the outcome of her complaint.

"I received a message within a couple of hours saying that they had an overwhelming amount of complaints at this time and that it was going to take some time for them to get back to me," she said.

In its annual report for 2023, OBSI says 24 per cent of the 1,571 banking complaints it receivedthat year resulted in monetary compensation to the complainant.

Roy says that's nowhere near enough.

"I think it's terrible. And it just goes to show you that they're working for the bank, and that what the bank says goes."

Sarah Bradley, the ombudsman at OBSI, says she can understand why people may be frustrated.

"We review complaints after they have been through the bank's internal complaint handling process" and people have been dissatisfied with the outcome, she said.

She could not discuss any specific case due to confidentiality.

But "I hope that we're able to reassure Canadians that there is an impartial ombudsman there that can help them if they've been treated unfairly," Bradley said.

WATCH | Ombudsman explains why few complaints lead to getting money back:

Why few bank fraud complaints lead to compensation

5 months ago

Duration 1:12

Sarah Bradley, the ombudsman and CEO at Ombudsman for Banking Services and Investments, responds to a report that found only a quarter of banking complaints resulted in monetary compensation in 2023.

Last year, the federal government designated OBSI as Canada's single external complaints body for banking, beginning in November of this year.Advocates called for a single independent ombudsman in 2020, when a federal agency conducted a review of the two existing banking ombudsmen.

Bradley noted that fraud has been trending upwards for years, with a significant jump in 2023. Fraud cases more than quadrupled that year, to 950 from 215 in 2022, according to OBSI's reports.

The ombudsman's office offers tips for helping people avoid fraud.

But Roy, who has since joined a Facebook group with other BMO customers who say their accounts were subject to fraud, said in the cases she's aware of, "not a single one of them has been supported by the ombudsman."

"So what are they there for? It's just going through the motion to pretend that we've all done something and come up with, 'sorry about your luck,'" Roy said.

System designed 'to blame the customer': advocate

Data provided by OBSI showed that in the past year, the most common type of banking complaint for Manitoba was e-transfer fraud, which accounted for 18 of the 50 cases opened in the four quartersleading up to March 2024.

Duff Conacher, co-founder of Democracy Watch and an advocate for bank accountability, said banks "have essentially set up the system to blame the customer always when money is taken out of someone's account wrongfully."

"The customer pays, and the bank refuses to pay. And the banks have not done enough to protect customers, and they are likely often to blame as well, with their internal systems," he told CBC.

"The customer, unfortunately, though, is not as powerful as a big bank, and almost always ends up paying, with the bank denying any responsibility."

He also says the fact OBSI has representatives of banks and the financial services sector on its governing board is "a structural flaw."

"And the second fatal flaw is not being able to make binding orders," Conacher said.

WATCH | A system designed to 'blame the customer,' says advocate:

Banking system designed to 'blame the customer': advocate

5 months ago

Duration 0:36

Democracy Watch co-founder and bank accountability advocate Duff Conacher says banks don't do enough to protect customers against fraud.

"You just need fully independent watchdogs if you want to have effective law enforcement. And the ombuds is not fully independent from the industry that it's watching over," Conacher said.

Bradley said it's "disappointing to hear that people have that perspective."

"We do everything that we can to maintain our independence," and maintaining that impartiality is "a founding principle for us," the ombudsman said.

"A majority of our directors on our board are independent of the industry and have not had any involvement with the financial industry either ever, or certainly not in the past two years," she said.

The 10-member board includes three members from the financial industry, as well as three members representing consumer interests, said Bradley.

"We are accountable to regulators, who oversee our work," and OBSI is subject to external reviews every five years, she said.

"So there are a lot of protections in place to help give Canadians the assurance of ourindependence and impartiality."

But Nicole Roy says her faith in the banking system has been shaken.

"I'm terrified to use my accounts. I'm nervous when things go through from work," she said, and she doesn't accept e-transfers anymore at her business.

"So I'm trying to stay away from the whole online banking thing as much as possible, because I don't trust it."

She also believes that eventually, everyone will be targeted in a banking scam of some sort.

"Who do we trust? Where do we go?" said Roy. "What do we do with our money start taking cash and put it under our mattress?"

Manitoba woman not hopeful she'll get money back after bank fraud

5 months ago

Duration 2:48

A southwestern Manitoba woman says she was shocked when her bank accounts were emptied in a fraudulent e-transfer but she's not optimistic that a complaint to an ombudsman service will help, since only about a quarter of such complaints led to customers getting monetary compensation last year.