Check Your Banking Agreement:

[Gurn]

Bank takes money from account-won't say why:

https://www.msn.com/en-ca/money/topstories/1-600-taken-from-customer-s-account-and-her-bank-won-t-say-why/ar-AAKMqvl?ocid=msedgdhp

Angel Pui was pleased when the business she started in the pandemic, selling luxury handbags online, made a sale in South Korea.

The timing was good, thought the Vancouver mother of two — right before the Christmas holidays and the expenses that come at that time of year. 

She checked her bank account with Tangerine — an online subsidiary of Scotiabank — and confirmed that her customer had transferred $1,600. 

She then shipped the coveted Gucci handbag, thinking all was well.

But in January, Pui checked her bank statement and saw that the money was gone. When she called Tangerine, Pui says she was only told the payment had been recalled by a bank in South Korea.

"Wait a minute, I'm out $1,600," Pui remembered saying. "What do you mean you can't tell me anything about it?"

"I was furious," she said. "I was like … how can you do this without my consent? It's my money." 

Pui fired off an email, asking what happened to her money. She got no response.

It's a problem small business owners are increasingly facing in the pandemic as more transactions move online, says Laura Jones, executive vice president of the Canadian Federation of Independent Business. 

"When you don't know why the money's been withdrawn, that's incredibly frustrating," said Jones. "And most people would say that doesn't pass any kind of fairness test."

After Go Public got involved, Tangerine put $1,600 back in Pui's account, as a "goodwill gesture," but didn't say why or what had happened in the first place.

Tangerine declined to be interviewed. In a statement to Go Public, a spokesperson said she couldn't comment on another financial institution's request to recall the funds, but that when the bank receives these requests, it considers "a variety of factors before making our decision." It declined to specify what those factors are.

'I just felt a sense of shock'

Even though Pui's business was less than a year old, she says she's sold many luxury handbags during that time and never before had a problem.

Her business is a niche market — and a glimpse into a world most people know nothing about. 

Designer fashion houses like Chanel, Hermès and Gucci produce a limited number of exclusive handbags each year. Pui noticed women posting about their latest purchases on Instagram and then tracked the bidding wars as other women tried to get their hands on a limited edition handbag. 

"Everyone is chasing after the same unicorn," she said. "It's hard to get. It's beautiful. And they can see that it's going up in value."

She created a website for people to buy and sell their luxury handbags — including rare bags she's forked out for, in the hopes of turning a profit. Before long, she says, inquiries started to pour in from around the globe.

"The most popular place for luxury handbags is Asia — China, Taiwan, Hong Kong, Singapore," she said. "But it's really all around the world."

So there were no red flags when Pui received an inquiry from South Korea about a Gucci bag and was then asked if the payment could be made by electronic funds transfer (EFT). Unlike e-transfer, which uses email, EFT moves money directly from one person's bank account to another's and doesn't require a trip to the bank, like sending a wire transfer — or the associated costs.

"I said sure, thinking it was really safe," said Pui. "I take PayPal, [electronic] bank transfer, wire transfer, all of the options. And I was really trusting, never having an issue before." 

Sure enough, the $1,600 arrived shortly after and remained in Pui's account for a month. But then, her accountant asked her to download all her statements for her taxes.

"And that's when I noticed that there was an entry called 'reversal of payment' — $1,600 was out of my bank account," she said. "I just felt a sense of shock."

She tried reaching out to the buyer, but says several emails went unanswered.

But what really angered Pui was the deafening silence from Tangerine when she tried to get to the bottom of her missing money. She says no one responded to her initial three emails and she only got a reply after Go Public got involved.

Tangerine's chief operating officer Guaurav Singh said the bank would reimburse her money, but added that her account was not intended for business purposes. Go Public asked repeatedly whether a different account would have provided more protections — when a spokesperson finally replied, she declined to address the question.

"I'm not satisfied that they didn't give me a clear answer of what happened," said Pui. "It just leaves me more frustrated."

Transparency 'always desirable'

Perhaps surprisingly to many people, customers at most financial institutions — including Tangerine — agree to terms and conditions that allow their banks to move money out of an account. 

There's no need to get authorization or even alert the customer.

"Not all bank agreements are the same, but usually they have language in them that gives the bank a lot of scope for how to handle these type of cases," said Sarah Bradley, ombudsman and CEO of the Ombudsman for Banking Services and Investments.

Reasons for not informing the customer could include cases of alleged fraud or money laundering, she said. 

Bradley says, in the cases she's reviewed, banks will often provide the reasons — but understands how frustrating it can be when they don't.

Transparency is "always desirable and it's just a part of good customer service," she said, adding that customers who can't get answers can take their complaints higher — within the institution or, failing that, to an external ombudsman. 

But the executive vice-president of the Canadian Federation of Independent Business, Laura Jones, says customers shouldn't have to fight to find out what happened to their money.

"There needs to be a whole lot more transparency on the part of these big financial institutions," said Jones. "At a minimum, there needs to be some requirement for the financial institutions to get back to the business owners and communicate with them."

Jones says the pandemic is compounding problems — more small business owners have moved online, where they're reporting an increase in this type of suspected fraud and say getting their money back is an uphill battle. The big banks have a series of time-consuming steps that must be followed in order to escalate a complaint before it is eventually heard by an internal ombudsman.

"Most banks or financial institutions have some [internal] appeal process, but we have yet to talk to a business owner who's actually won one of these appeals," said Jones. 

Further complicating things, the growing scale of the gig economy means many small business operators are using personal accounts, which may offer fewer protections than business account options — account agreements vary among banks. 

The whole ordeal has soured Pui on her online bank. 

"I chose Tangerine because it seemed like it was really convenient … modern and easy," she said. "But when something like this happens … there was no brick and mortar. You couldn't line up at the teller and demand to get your money back." 

She's moved most of her business to another financial institution, hoping to make the point that customers like her shouldn't be left to wonder about what happened to their own money.

[Gurn]

I have to go to my bank today, actually a Credit Union, however I will be asking about this type of possibility.

Need to know that only the government or a court order can take that money out of my accounts.

[NewbieCanuckFan]

23 minutes ago, gurn said:

I have to go to my bank today, actually a Credit Union, however I will be asking about this type of possibility.

Need to know that only the government or a court order can take that money out of my accounts.

I worked in payroll once and I know there was no way for me to take money out of another person’s account without that owner’s express permission (AND the bank having written authorization of that from that individual).  Course this was over a decade ago, so the rules might have changed.

[SirCosmoDuffGordon]

If she created a store and used shopify, which is incredibly easy to create an online store with, received the payments through shopify you can see from within your admin settings likely fraudulent transactions and refund the payments. You can also use various 3rd party apps that go a step further and contact the suspicious payments to see if they're fraudulent. I would never just receive a random payment from someone online without it going through some sort of 3rd party like paypal at the very least to be able to see if their paypal address is verified which means you're covered if they try to screw you. 

Edited June 7, 2021 by SirCosmoDuffGordon

[Elias Pettersson]

Probably a good idea to stay away from banks named after an orange and simply deal with the larger chartered banks.

[JM_]

good cautionary tale for small retailers. Don't ship it until you know you really have the funds. 

 

33 minutes ago, gurn said:

I have to go to my bank today, actually a Credit Union, however I will be asking about this type of possibility.

Need to know that only the government or a court order can take that money out of my accounts.

I think you're fine if its not a transaction like this one. But waiting for payments to clear has always been a thing, thats why there was so much cheque fraud back before online banking was a thing. 

[King Heffy]

Two sides to this story.  As a customer, I appreciate this as it gives me some recourse if something doesn't go right.

[JM_]

1 minute ago, Elias Pettersson said:

Probably a good idea to stay away from banks named after an orange and simply deal with the larger chartered banks.

Tangerine is actually Scotiabank. 

[Elias Pettersson]

1 minute ago, Jimmy McGill said:

Tangerine is actually Scotiabank. 

It's a subsidiary.  You are not actually dealing with Scotiabank.  You could just open up an actual Scotiabank account and use online banking in that account, at least you have the protection of a chartered bank.

 

As per Wikipedia: 

 

Although now wholly owned by Scotiabank, it remains a separate legal entity and thus retains its separate Institution Number 614, with all accounts being under a single transit number, 00152.^[6]

[JM_]

2 minutes ago, Elias Pettersson said:

It's a subsidiary.  You are not actually dealing with Scotiabank.  You could just open up an actual Scotiabank account and use online banking in that account, at least you have the protection of a chartered bank.

 

As per Wikipedia: 

 

Although now wholly owned by Scotiabank, it remains a separate legal entity and thus retains its separate Institution Number 614, with all accounts being under a single transit number, 00152.^[6]

I've used both fo mortgages, and know what they are. I'm very comfortable using Tangerine, it has the same features as Scotia in terms of customer protections just with better rates since there's no branch in most cases, except for downtown Vancouver which has a physical office. 

[brownky]

And for people stumbling into this thread... if you have a Paypal account linked to a bank account, give those ol Paypal Terms and Conditions a read.

 

If you still have a linked Paypal account after reading them, read them again, but slower.

 

If you *still* have a Paypal account linked to a bank account after that... well... don't complain when it happens to you.

[Elias Pettersson]

2 minutes ago, Jimmy McGill said:

I've used both fo mortgages, and know what they are. I'm very comfortable using Tangerine, it has the same features as Scotia in terms of customer protections just with better rates since there's no branch in most cases, except for downtown Vancouver which has a physical office. 

It's a separate legal entity so although it has the same features as Scotiabank if something ever went wrong you'd be suing Tangerine not Scotiabank.  That's why it's a separate legal entity so Scotiabank can protect itself if anything happens.  Looks like what happened here is a Tangerine issue, not a Scotiabank issue.  I've never heard of a chartered bank taking out money from someone's account without their permission.  My buddies all work in the financial services industry so I know exactly how these things work.

 

Tangerine used to be ING.  Scotiabank purchased it so they could tap into the online market and get new clients by offering better rates and terms to people who only use online banking.  But you are not dealing with Scotiabank so the protections that are offered are only covered by Tangerine.  It's an online bank so if anything bad ever happened good luck trying to chase somebody down to fix the problem.  That's exactly what happened here.  This person had no branch to go to, nobody to complain to.  That's the risk you take if you want to save some money and do everything online.  There is no brick and mortar location you can run to for help.

[JM_]

6 minutes ago, Elias Pettersson said:

It's a separate legal entity so although it has the same features as Scotiabank if something ever went wrong you'd be suing Tangerine not Scotiabank.  That's why it's a separate legal entity so Scotiabank can protect itself if anything happens.  Looks like what happened here is a Tangerine issue, not a Scotiabank issue.  I've never heard of a chartered bank taking out money from someone's account without their permission.  My buddies all work in the financial services industry so I know exactly how these things work.

 

Tangerine used to be ING.  Scotiabank purchased it so they could tap into the online market and get new clients by offering better rates and terms to people who only use online banking.  But you are not dealing with Scotiabank so the protections that are offered are only covered by Tangerine.  It's an online bank so if anything bad ever happened good luck trying to chase somebody down to fix the problem.  That's exactly what happened here.  This person had no branch to go to, nobody to complain to.  That's the risk you take if you want to save some money and do everything online.  There is no brick and mortar location you can run to for help.

they didn't "take it out" they reversed a payment on a purchase. Thats not the same thing at all as a bank just taking money from you. 

 

the retailer took a payment type that she didn't understand,and shipped the goods anyway, she's lucky Tangerine gave her the money back. 

 

Edited June 7, 2021 by Jimmy McGill

[Elias Pettersson]

16 minutes ago, Jimmy McGill said:

they didn't "take it out" they reversed a payment on a purchase. Thats not the same thing at all as a bank just taking money from you. 

 

the retailer took a payment type that she didn't understand,and shipped the goods anyway, she's lucky Tangerine gave her the money back. 

 

She was using a personal bank account to save money and doing everything online.  If she had actually opened up a business account with Scotiabank and paid the regular fees this would have never happened as there are certain protections in place with an actual business account and you would most likely have a commercial banking contact at the branch to deal with who can fix the problem right away if there are any issues.

[JM_]

5 minutes ago, Elias Pettersson said:

She was using a personal bank account to save money and doing everything online.  If she had actually opened up a business account with Scotiabank and paid the regular fees this would have never happened as there are certain protections in place with an actual business account and you would most likely have a commercial banking contact at the branch to deal with who can fix the problem right away if there are any issues.

or she could have just ensured the payment type she accepted was legit. 

 

Think about it from the banks pov. She could have had a buddy in S.Korea who was in on a scam. Oh I sent a bag but never got paid. If banks covered this kind of thing they'd lose billions in fraud. 

[Elias Pettersson]

2 minutes ago, Jimmy McGill said:

or she could have just ensured the payment type she accepted was legit. 

 

Think about it from the banks pov. She could have had a buddy in S.Korea who was in on a scam. Oh I sent a bag but never got paid. If banks covered this kind of thing they'd lose billions in fraud. 

Yeah I agree, scams do happen.  My buddies have told me many stories.  With a business account there is more monitoring at the bank level for this kind of stuff.  You most likely would have an assigned business banking person to deal with at the branch which makes things easier to catch these sort of scams.  Doing everything online saves alot of money and is very convenient but it does come with some form of risk.  In life nothing is really free.  You get what you pay for.

[khay]

13 minutes ago, Elias Pettersson said:

She was using a personal bank account to save money and doing everything online.  If she had actually opened up a business account with Scotiabank and paid the regular fees this would have never happened as there are certain protections in place with an actual business account and you would most likely have a commercial banking contact at the branch to deal with who can fix the problem right away if there are any issues.

Pui's business doesn't really feel like a business.

 

It sounds like she is exporting goods to overseas without paying proper import/export taxes. And those luxury handbags usually go anywhere from $1,000 to tens of thousands.

 

If she has to set up a business account, she will have to set up a business first and any profit she makes needs to be taxed.

 

Basically, she is trading illegally without realizing what she's doing, trying to back pocket profit to avoid having to pay taxes.

 

It's good she got $1,600 back. Now, the government should go tax her for all the profit she realized without reporting it.

 

 

[Elias Pettersson]

1 hour ago, khay said:

Pui's business doesn't really feel like a business.

 

It sounds like she is exporting goods to overseas without paying proper import/export taxes. And those luxury handbags usually go anywhere from $1,000 to tens of thousands.

 

If she has to set up a business account, she will have to set up a business first and any profit she makes needs to be taxed.

 

Basically, she is trading illegally without realizing what she's doing, trying to back pocket profit to avoid having to pay taxes.

 

It's good she got $1,600 back. Now, the government should go tax her for all the profit she realized without reporting it.

 

 

This is true.  With all the publicity she is getting I wouldn't be surprised if she gets audited next year...

[Kragar]

2 hours ago, brownky said:

And for people stumbling into this thread... if you have a Paypal account linked to a bank account, give those ol Paypal Terms and Conditions a read.

 

If you still have a linked Paypal account after reading them, read them again, but slower.

 

If you *still* have a Paypal account linked to a bank account after that... well... don't complain when it happens to you.

I'll take your word for it.  Never really trusted them, and would have my stepson use his account the one time I needed to send via Paypal years ago.  I'll pass this on to him, in case he still has his account.

 

On another T&C tangent, I read something today about Tik Tok (another thing I wouldn't be engaged with), how they can collect your biometric data (fingerprint, voiceprint, faceprint) on US accounts.  Not sure if that is already the case in Canada, or if it on the way.

 

https://techcrunch.com/2021/06/03/tiktok-just-gave-itself-permission-to-collect-biometric-data-on-u-s-users-including-faceprints-and-voiceprints/?guccounter=2&guce_referrer=aHR0cHM6Ly93d3cuYnJlaXRiYXJ0LmNvbS90ZWNoLzIwMjEvMDYvMDQvY29tbXVuaXN0LWNoaW5hcy10aWt0b2std2lsbC1ub3ctY29sbGVjdC15b3VyLWtpZHMtZmFjZXByaW50LWFuZC12b2ljZXByaW50Lw&guce_referrer_sig=AQAAAAAgSZFZ79SaXhjZgG6UGHW5JTz2IUckanW6MhJWC8HyoL-489W64wvucP4bPP-YicwJx-j9S4ucAJgha2N-JYem9QN1Yc04VlgBIM9iKX2ZKp1Am9mZXfdEtvVVRNL-bgmuo3bbLRrXby7z_XejhJ1pXIeZ_whStoV_iX8bHC4S

[drummer4now]

These are called "Chargebacks" and can happen with debit, bank transfer, and visa purchases.. 

 

It is great for the consumer, but can be hell for a merchant.. 

 

I have had to initiate some because of scumbag merchants, but at the same time was at the recieving end of a fraudulent chargeback by a consumer. 

 

There is nothing you can really do about them.. because they usually end being in favour of the customer of the bank.