Family dropped as client of bank, not told why | General financial discussion | Discussion forum

The family is playing dumb and full well knows that TD can't say anything because of privacy rules.

Situation is highly likely because of suspicious activity or attempted transactions, related to money laundering and terrorist activity financing. Another possibility is trying to run a money transfer business.

Similar to this case reported in December in the Globe & Mail: Montreal man, born in Iran, sues TD Bank over closed accounts.

It is disturbing that respected longterm forum members would assume that the explanation of this situation might have to do with terrorism, no less; or blame the media for exposing the bank's actions and asking questions.

The fact is, we don't know what the reasoning was or if it was valid. Let's leave it there. The main point was that banks can close your accounts without explanation and it can be very disruptive to families. That will be news to lots of people and is therefore worth reporting.

As I recall from previous posts, both commentators hold bank stocks, presumably including TD.

The excerpt from TD letter is not in question, never has been.

If you have found anything that clearly explains WHY the bank came to this decision, I'm all ears.

In the absence of such information, we don't know whether there was a valid reason. Was their name confused with another's, as in the case of people who unwittingly discover themselves to be on no-fly lists? Was the information which led TD to their conclusion accurately based? Even highest levels of security forces make mistakes in this regard. Those are a few of the possibilities that come to mind immediately.

There may indeed be others, but the point is that we simply don't know. The journalist did not claim to know. I do not claim to know. And the family certainly doesn't claim to know. I see no reason why we should focus on only one possibility and I see no reason why we should take TD's undocumented opinion as gospel truth. It's not like they've never made a mistake or never had to apologize. Unfortunately, the family appears to have no recourse and has reason to fear that they may face the same unknowable accusations and difficulties at other banks. They cannot clear their name because they don't know what the charge is. The bank holds all the cards.

I have no doubt Pat Foran knows how to use Google. I wouldn't be at all surprised if in fact he became aware of this story through reading the Globe and Mail's story as I don't consider him an in-depth investigator, based on his history of reporting. He often brings issues to our attention without resolving them. I often find them wanting because of this. So what?

Ferreting out the truth would mean considering all possibilities as to why this letter was written and withholding judgment until more was known, not just assuming TD's action was well founded.

Not my idea of a fair and just arrangement.

I agree with Loonie. I, myself had accounts closed at a Canadian Bank without explanation in the past. They simply stated it was within their right to do so.

Now I believe I know what the issue was... There was too many EFTs / transfers in and out of the account (I was using this bank as a pull from one bank and move to another) I did this 2 to 4 times a month, but I kept very little at the bank.

Now that's my best guess, but honestly I will never know their true reasoning.

SG said
I agree with Loonie. I, myself had accounts closed at a Canadian Bank without explanation in the past. They simply stated it was within their right to do so.

Now I believe I know what the issue was... There was too many EFTs / transfers in and out of the account (I was using this bank as a pull from one bank and move to another) I did this 2 to 4 times a month, but I kept very little at the bank.

Now that's my best guess, but honestly I will never know their true reasoning.  

You mean you're really not a terrorist or a money-launderer! (just kidding)

i am doubtful this explanation applies to this particular story because the story states that they had all their financial business with TD but it's certainly possible that the sum total of it didin't add up to a big enough profit to make it worth the bank's while. Banks are not a public service per se; they are a business.
Your point is taken, and your explanation is a reasonable inference.

I have thought for some time now that there is a risk that those who use their main bank simply as a hub may have that privilege withdrawn eventually, precisely because the banks, just like your doctor (at least in Ontario) can dismiss you as a client.
They have two options. They can either provide more reasons for us to want to bring more of our business to them; or they can decide it's worth the bad publicity to get rid of some of us.

Bottom line lessons:
1. Be aware that your bank can dismiss you and your business.
2. If you find them useful, make sure you throw them a few bones to keep them happy. This may mean keeping some money there at very low interest or having an investment account or a well used credit card or more than one of these. (Personally, I keep a healthy balance at TD earning nothing for this reason and another, personal, reason.) I recently added spouse to this account, which brings in other TD business aligned with my account.
3. Don't accumulate points on a Wish basis. Get the best deal you can get on a card that gives cashback, preferably monthly but at least annually. Put that money in your Wish account where it can earn interest and use it for travel or whatever your dream is.
4. Consider whether you could do most or all of your financial business through a credit union. I have not investigated but I think it's harder for a CU to dismiss you than a bank. With a CU, you are a member, and a member is a partial owner, so there would have to be a transparent process to get rid of you, I would think.
5. Never put your money in the laundry!
Feel free to discuss these lessons. Maybe someone has better ones.

Showed this to a friendly bank employee who had the following to say:

Banks may close accounts for any reason, at any time, and are not obligated to explain reasoning as per the Financial Service Agreement you signed prior to the account opening and as per Canadian banking legislation.
Despite this non-obligation, banks will typically provide a written notice of account closure and offer sufficient time to sort out finances prior to closure, (14-31 days depending on the bank) and provide reason(s) for the closure out of goodwill and reputation-maintenance.
Reasons why banks close personal deposit accounts include i) the bank is complying with a court order ii) customer has acted illegally iii) customer has breached the terms and conditions of the Financial Services Agreement vi) customer has acted on one or multiple occasions abusively towards bank staff.
There is no policy nor practice whereby the bank will close an account based on the amount of revenue generated by that customer (to my knowledge, in my internal experience). If the customer is continually COSTING the bank money by violating the terms and agreements (ex: remaining in un-arranged overdraft AKA credit without allowance/permission), the bank may eventually decide to terminate the relationship.
Strict privacy policy prohibits the bank from disclosing information such as the reasoning behind the individual’s account closure mentioned in the article. (Which should instil comfort and confidence, not suspicion of maleficence).
I encourage you to consult your bank’s Financial Service Terms that you agreed to, the Code of Banking Practice and the Canadian Bank Act to learn the actual regulations. Banks are not evil corporations set-out to take advantage of you and your money. No massive corporation is perfect, but I can assure you that these corporations do a lot of good for the community. Think critically and appreciate the prosperity we are lucky to enjoy instead of perpetuating media-fabricated misconceptions. Happy banking everyone!

Edited.

Fascinating honesty from Top It Up's bank.
Gotta love that final reason, "we choose to". That covers everything under the sun including but not limited to "I don't like the look of you", "you have a funny name" and "you complained to the ombudsman too often", "friendly" bankers and corporate philanthropy notwithstanding.

A few months ago, in another thread, Doug explained to us the conditions under which a bank may refuse to OPEN an account, for which they are required by law or regulation to give a reason. He also explained manoeuvres typically used to discourage applicants so that the bank can avoid giving a reason.
It is interesting, and, I would argue, an oversight, that these rules do not require the banks to give a reason for CLOSING an account.

Kidd said
... and over the moon.

I would say, "okay, cash me out". I'll be home next tuesday, have my money deliveried to me then. Since the BOC have stopped printing the 500 and 1,000 dollar note, i guess 100's will be fine.  

Keep me posted. I'd like to be there when you take your Santa sac to the next bank for deposit. "Ho ho ho," you'll say; and " go go go," they'll respond...