Canadians’ Banking Questions Answered

Fall 2011

About the CBA The Canadian Bankers Association works on behalf of 52 domestic banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 267,000 employees. The CBA advocates for effective public policies that contribute to a sound, successful banking system that benefits Canadians and Canada’s economy. The Association also promotes financial literacy to help Canadians make informed financial decisions and works with banks and law enforcement to help protect customers against financial crime and promote fraud awareness.

About this Tool Kit This tool kit has been created to assist Members of Parliament in answering Canadians’ questions about banking.

01

The Right Bank Account for You

What You Need to Know • There is a lot of choice: there are over 100 consumer bank account packages alone to choose from, offered by more than 20 banks in Canada. • Comparing accounts is easy using a simple, free, online tool. • There are low-fee and no-fee accounts available for everyone and all you need to open an account is identification.

The Right Bank Account for You Fees, services, access – how do you choose the right bank account?

The Types of Consumer Accounts Available There are many different types of accounts available with a wide range of services, including: • basic chequing and saving accounts • full service accounts with many types of transactions included • low-fee or no-fee accounts • youth, student and seniors’ accounts. How do you know which account is right for you? Choosing the right account depends on the services you need and want.

How to Shop for an Account

There are a lot of accounts to choose from (over 100!), so it’s important to think about the services you need and to shop around for the best account to meet your needs. And it’s easy to compare the banking packages available using the online interactive Banking Package Selector Tool available from The Financial Consumer Agency of Canada (FCAC). The tool is available both online and in print. Visit the FCAC at www.fcac-acfc. gc.ca or call 1-866-461-3222. Choosing the right service plan can save you both time and money.

For example, if you want to save money, there are accounts that: • allow a specified number of transactions for a lower fee than some unlimited transaction accounts, • waive fees if you keep a minimum balance in the account (usually $1000). If you need more services, there are banking packages that include more tools for a flat monthly fee or a fee per transaction, including: • certified cheques, money orders, overdraft protection, e-mail money transfers or cheque returns, • U.S. dollar accounts and cross-border debits, • multiple accounts (both chequing and savings) under the same monthly fee.

More About Low-Fee and No-Fee Accounts

Banks in Canada are committed to ensuring that all Canadians can access banking services, regardless of income level. A number of Canadian banks have committed to providing low-fee accounts with a monthly fee of $4.00 or less. Services included with the low-fee accounts include: • no charge for deposits, • the use of a debit card, • cheque-writing privileges, and • 8 to 15 debit transactions per month. It’s also possible to pay no fees at all: • if you have a no-fee service package (some of which are developed specifically to help seniors and students), • if your bank waives your fees when you maintain a minimum monthly account balance (usually $1000), or • if your bank offers rebates on service fees if you have additional products with that bank, such as a mortgage or credit card.


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06

Youth and Financial Literacy What You Need to Know • Financial literacy is an essential life skill. Developing an understanding of money at a young age will help young people better manage their money in the future. • Banks recognize that they have a role to play in contributing to financial literacy for youth and they lead and sponsor many financial literacy programs, including the CBA’s high school seminar program, Your Money. • Many banks also offer special websites to help children learn about banking and saving money and banking packages that will get them started with their own bank account.

Youth and Financial Literacy Banks recognize that they have a role to play in contributing to the financial literacy of all Canadians and offer many special incentives to youth and children to learn more about money and starting to save.

Getting Your Child Interested in Saving Their Money There’s nothing wrong with a piggy bank, but some kids love the idea of having their own bank account.

Most banks offer no-fee account packages for children so that they can get started with their savings. It may be convenient to open an account where you already bank so ask if they have a special children’s account. You can also compare children’s account packages using The Financial Consumer Agency of Canada (FCAC) online, interactive “Cost of Banking Guide.” The guide is available both online and in print. Visit the FCAC at www.fcac-acfc.gc.ca or call 1-866-461-3222. Many banks also have special websites to help children learn about banking and to get them excited and interested in saving their money. Some also offer branch tours to help children understand how a bank works.

Youth and Financial Literacy

As children get older, it is even more important to instil good money management skills as they take on part-time jobs or begin saving for post-secondary education. The banks offer many programs to support and help teach financial literacy skills such as saving and money management.

How Banks are Helping:

Another key source of information is the Financial Consumer Agency of Canada. The City is the FCAC’s interactive, self-guided online learning resource for young people. Check it out on their website at www.fcac-acfc.gc.ca.

• Bank the Rest — This is a savings program that allows you to automatically round up purchases made using the Scotiabank debit card to the next multiple of $1 or $5. The difference between the purchase total and the rounded up amount is then transferred to a savings account. • The Learning Partnership’s Entrepreneurial Adventure (EA) — Sponsored by BMO Financial Group, EA brings students and teachers from kindergarten to grade 12 together with business partners to create ventures that benefit their local communities.

The banks also jointly support a non-commercial in-class seminar called Your Money, which the CBA has been offering for over ten years to deliver basic money management information to senior high-school students in communities across Canada.

• Students in Free Enterprise — This program, sponsored in part by banks, including TD Bank Group, CIBC, Scotiabank and HSBC Bank Canada, provides grants for students to develop and implement sustainable financial education projects. • TD Money Lounge on Facebook — This Facebook group offers financial education aimed at students and youth. • Junior Achievement Programs — These popular programs are offered in schools and teach money management skills as well as business and entrepreneurship education. Several banks in Canada are supporters of Junior Achievement including BMO Financial Group, CIBC, HSBC Bank Canada, RBC, Scotiabank, and TD Bank Group.

• Momentum Community Economic Development Society — Sponsored by RBC Foundation, this Calgarybased money management program delivers workshops with a goal of helping individuals take control of their personal finances and developing money management knowledge and skills. • Clearfacts.ca – This financial literacy website, sponsored by National Bank, offers articles and information for families, home-owners, students, and business owners.

07

Financial Fraud Prevention Tips

What You Need to Know • Banks have very sophisticated security systems and teams of fraud experts in place to monitor transactions to protect you from criminal activity. • While banks work hard to prevent fraud, there are simple steps that you can take to protect yourself. • If you are a victim of fraud, your bank will launch an investigation and, in most cases, you will be reimbursed for any money that was stolen.

More Information Bank website resources for children and youth: CIBC SmartStart program: www.cibc.com/ca/youth/

The Your Money Seminar Program The banks also jointly support a noncommercial in-class seminar called Your Money, which the CBA has been offering for over ten years to deliver basic money management information to senior high-school students in communities across Canada. Offered in partnership with the federal Financial Consumer Agency of Canada (FCAC) and delivered by volunteer bankers, the seminar has reached over 200,000 students to date. Teachers interested in booking a free seminar for their class can find out more at www.yourmoney.cba.ca.

Questions? If you have general questions about banking in Canada, call the CBA’s Banking Information Line at 1-800-263-0231 or send an email to [email protected].

RBC Leo Young Savers Account  www.rbcroyalbank.com TD Youth account: www.tdcanadatrust.com/accounts/youth.jsp Scotiabank Getting There Savings Account for Youth: www.scotiabank.com National Bank’s Banking Programs for Youth (PDF): www.nbc.ca ING Planet Orange: www.orangekids.com Laurentian Bank’s Operations Account Youth: www.laurentianbank.ca BMO Resources: www.bmo.com/home/about/banking/ corporate-responsibility/financialliteracy#lit_students

Additional Resources Your Money Seminars www.yourmoney.cba.ca The Financial Consumer Agency of Canada’s financial literacy program: www.fcac-acfc.gc.ca/eng/education

Financial Fraud Prevention Tips The banks in Canada take the issue of fraud very seriously and they are working around the clock to protect you. While the banks are working hard to prevent fraud, there are simple steps that you can take to better recognize fraud and protect yourself. Here are some tips on the more common types of scams.

Debit Card Fraud

99% of debit card transactions occur without incident each year

Debit cards are very safe, with 99 per cent of transactions occurring in Canada without incident each year. There are ways to avoid having your information stolen and your card copied. • Always protect your Personal Identification Number (PIN): use your shoulder or your hand to shield your PIN when entering it onto the keypad. • Never lend your card or disclose your PIN to anyone. • Memorize your PIN: don’t write it down. • If anything seems unusual about the ABM or payment terminal, don’t use it; report the situation to police, the retailer or the bank. • Regularly review your transaction history and report anything unusual to your bank immediately. • Change your PIN periodically.

Credit Card Fraud Banks and credit card companies take significant steps to protect customers and minimize fraud as much as possible. For example, did you know that: • banks’ systems can automatically detect unusual activity in a customer’s account so that steps can be taken to prevent fraud from occurring. • Visa, MasterCard and American Express have zero liability policies for unauthorized transactions, which means if your card is used to make fraudulent purchases, you won’t be held responsible.

There are steps you can take to protect yourself including: • Report a lost or stolen card as soon as you notice it is gone. • Make it a habit to regularly check your transactions online or on your monthly statement. If there are any charges that you didn’t make, report them to your card issuer right away. • Never give out your card number over the phone or Internet unless you know you are dealing with a reputable company. • Sometimes scammers will try to trick people into revealing information about their credit cards either over the phone or through e-mail. It’s important to know that your bank or credit card company would never call to ask for personal information like your credit card number, expiry number, PIN, or the security number on the back of your card.

Contactless Cards

There have been news reports recently about electronic pick-pocketing, where a criminal with a card reader and computer can read the information on contactless cards and commit fraud. Contactless card transactions are processed through the same secure networks used for all other Visa, MasterCard and Interac transactions. It’s important to know that contactless cards are embedded with multiple layers of security to protect you. For example: Short Range – Cards must be within a few centimeters of a reader for any data to be transmitted. The short range makes it difficult for criminals to gain access to card information from a distance and, even if they could, the card data cannot be used to create a counterfeit card and the encryption technology would make the stolen card information useless.

Encryption – Each transaction you make with your contactless card creates a unique encryption code, which expires after the transaction is finished. If someone was able to get close enough to steal data from your card, they would not be able to use the encryption code because it would have expired. Limited Information – Your name is not transmitted during a contactless transaction. For Visa and MasterCard, the three-digit security code on the back of your card is also not transmitted. Low Transaction Limits – Contactless cards generally have low transaction limits and any larger purchase will require you to enter your PIN. If you card is lost, this will prevent large purchases from being made. Zero Liability – Visa, MasterCard and Interac all have zero liability policies for credit and debit card holders. In cases of fraud, you won’t be held responsible and will get your money back.

Zero Liability Visa, MasterCard and Interac all have zero liability policies for credit and debit holders.

Fraudulent E-mails E-mail fraud — sometimes called “phishing” or “brand spoofing”— uses fraudulent e-mail messages and websites that look like they are from a legitimate company, such as a bank, credit card company, online retailer or government agency. The e-mail you receive may look real, with company logos and branding, but you may have actually received this spam or mass e-mail from a criminal. Here are some simple steps that consumers can take to protect themselves, including: • Be sceptical. Fraudulent e-mails can look like they come from a real bank e-mail address. If you have any doubts about an e-mail that looks like it is from your bank or a reputable company, contact them before responding to ensure that it is legitimate. • Never send or confirm your personal or financial information by e-mail. • Always enter your bank’s website using the website address (URL) that you know is accurate. Contact your bank to get the correct website address if you’re unsure. • Check the domain name shown as the link in the e-mail. When you click the link, if it does not match the name that appears in the browser at the top of the screen, then it may be a fraudulent website.

• On the Internet, whenever entering personal information, ensure that you are using a secure website. Look for “https://” rather than just “http://” in the address bar of your Web browser as well as a closed padlock in the bottom right corner of your browser. • Make sure that your home computer is protected. Install anti-spam, antispyware and anti-virus software and make sure they are always up-to-date. • Regularly review your bank and credit card statements to ensure that all transactions are authorized. • Check your credit report at least once a year by contacting credit reporting agencies Equifax Canada or TransUnion Canada.

The CBA website has more information on how to safeguard your money at www.cba.ca/fraud. You’ll learn more about: What Seniors Need to Know about Financial Abuse Staying Safe Online WiFi Hotspot Scams Grandparent Scams Overpayment Scams Identity Theft Real Estate Fraud How to Protect Against Malware Phoney Bank Inspector Scams Avoiding Counterfeit Bills Staying Safe at the ABM 

Questions?

Look for “https://” rather than just “http://” in the address bar of your Web browser as well as a closed padlock in the bottom right corner of your browser

If you have general questions about banking in Canada, call the CBA’s Banking Information Line at 1-800-263-0231 or send an email to [email protected]. (Please note that if you believe that you have been a victim of fraud, you should contact the police and your bank immediately.)

More Information The CBA website has extensive information on fraud prevention including regular free tips on its website at www.cba.ca/fraud. Sign up now!

08

For Seniors – Preventing Financial Abuse

What You Need to Know • Financial abuse targeting seniors is a real concern as many older Canadians hold a high concentration of wealth saved over their lifetime. • While anyone can be a victim of fraud there are simple steps you can take to protect yourself from the common scams targeting seniors. • If you have been the victim of financial abuse or a crime, there is help available.

For Seniors – Preventing Financial Abuse Protecting Yourself From Financial Abuse: What Seniors Need to Know Sometimes it’s useful to have a family member or other caregiver help you with your financial affairs. Their responsibility is to protect your well-being and financial interests. However in most cases financial abuse happens when someone you know tries to take or control what belongs to you for their own benefit, not yours. This can include your money or your property. Financial abuse is unethical, and in many cases it is also a crime.

Financial Abusers — Who Are They? A financial abuser can be someone you thought you trusted in your life: including a family member, caregiver, professional or friend. He or she may exploit your relationship to pressure you to gain access to your finances or estate. A person may be a financial abuser if they put pressure on you to give or lend them money, or to gain access to your financial information, misuse a power of attorney, take items or money from your home or bank account without permission, misuse your bank or payment cards or your joint banking accounts, forge your signature on any legal document, or sell or transfer your property against your wishes or interests. Warning Signs: There are some warnings signs that you or family members may observe that indicate financial abuse may be happening. For example: • A caregiver may take an extreme interest or involvement in your financial matters. • You may begin to notice withdrawals or transfers in your bank accounts that you don’t remember making or are inconsistent for a senior. • Changes may be made to your will, trusts, contracts, power of attorney, property titles, deeds or mortgages that are not in your best interest. • Non-payment of services, which may indicate a loss of funds or access to funds. • Closing of RRSPs or bank accounts without regard for penalties.

How Can You Prevent It? A joint account, power of attorney or other arrangement may be useful, but these arrangements should be used in your best interest. Make sure your wishes and expectations are clear when you enter into any such agreement. Here are a few other tips: • If you are able, conduct your financial transactions and estate matters yourself, whenever possible. • Carefully consider any request for a loan. Don’t be pressured to lend money if you’re not comfortable. • Make sure you understand every document you sign. • Have pension cheques directly deposited into your bank account and bills direct debited out of your account. • Speak to a lawyer to make sure that, if you have a power of attorney, it is set up the way you want and will protect your best interests.

Make sure you understand every document you sign.

Where to Get Help Remember, financial abuse is a violation of your rights and may be a crime. It is not your fault, and you can get help. Alberta – Family Violence InfoLine: 310-1818 British Columbia – Coalition to Eliminate Abuse of Seniors: 1-866-437-1940 Manitoba – Seniors Abuse Line: 1-888-896-7183 Newfoundland and Labrador – Senior’s Resource Centre: 1-800-563-5599 New Brunswick – Department of Social Development (Abuse Line): 1-888-992-2873 Northwest Territories – Seniors Information Line: 1-800-661-0878 Nova Scotia – Senior Abuse Line: 1-877-833-3377 Nunavut – Contact the social services or health centre in your community or the RCMP at 1-867-979-0123 Ontario – Senior Safety Line: 1-866-299-1011 Prince Edward Island – Adult Protection Line: 902-368-6717 Quebec – Info-Abuse Line: 1-888-489-ABUS (2287) Saskatchewan – Seniors Mechanism Info Line: 1-888-823-2211 Yukon – Seniors’ Services/Adult Protection Unit: 1-800-661-0408 x3946 Call your local police. Talk to your bank manager.

Frauds and Scams Targeting Seniors

While anyone can be a target of a fraud or scam, there are some criminals who specifically target seniors. Here are two types of scams to be aware of:

“Grandma?

Grandparent Scam Criminals have set their sights on seniors with grandchildren using a particularly malicious trick known as the “grandparent scam”. A senior will receive a phone call from someone who starts the conversation with, “Grandma? Do you know who this is?” The victim, thinking it’s one of their grandchildren, will respond with, “Yes, I know it’s you (name of grandchild).” The caller will then start using this name to gain credibility with the victim.

Do you know who this is?”

The caller will claim to be in trouble and will request money right away. Often they’ll say they were in a car accident with a rental car or they are under arrest and in jail in another city or country. The victim, wanting to help, will withdraw funds from their bank account and wire money to the “grandchild”. The money will be sent through a money transfer service where the criminal can then pick it up at any location across the world. Fortunately there are a few simple steps that you can take to avoid falling victim to this scam. For example, never offer information to the caller. If they prompt you with a question like, “Do you know who this is?” simply say no and have them tell you. And ask questions that only your grandchild could answer so you know who you’re talking to. Also, never wire money to someone under uncertain conditions. It is nearly impossible to recover or trace money that has been wired.

If they prompt you with a question like, “Do you know who this is?” simply say no and have them tell you.

Phoney Bank Inspector Scam In this scam, criminals will impersonate a bank investigator and trick you into providing your own money to “aid” a criminal investigation. A victim will receive a phone call from someone who claims to be a bank inspector, bank manager or police investigator. They will explain that the bank is investigating a series of fraud cases that have been committed by staff at your branch and ask you to withdraw a large sum of money from your account that will be inspected and used as evidence as part of the investigation. After you withdraw the money, you’ll hand over the money and then be told to go home and wait for a phone call confirming that the money has been re-deposited into your account. Unfortunately, no call comes, the money is not returned and the “inspector” is never heard from again.

It is important to remember that neither your bank nor a police investigator will ever request that you assist in an undercover investigation or ask you to withdraw money from your account.

If you receive such a suspicious call, hang up and call police. Never give out personal bank information over the phone unless you have called your bank and they ask you questions to verify your identity.

Questions?

More Information:

If you have general questions about banking in Canada, call the CBA’s Banking Information Line at 1-800-263-0231 or send an email to [email protected]. (Please note that if you believe that you have been a victim of fraud, you should contact the police and your bank immediately.)

The Financial Consumer Agency of Canada www.fcac-acfc.gc.ca 1-866-461-FCAC (3222) Canadian Anti-Fraud Centre www.antifraudcentre.ca 1-888-495-8501 The CBA website at www.cba.ca/seniors-fraud Sign up for the CBA’s Fraud Prevention Tip at www.cba.ca/fraud

09

Banking Service Fees

What You Need to Know • The Canadian banking system is very competitive and there are over 100 different account packages on the market to choose from. And comparing packages online is easy. • It’s also possible to pay no service fees at all if you: – your bank offers a no-fee service package, – if your bank waives your fees when you maintain a minimum monthly account balance (usually $1000), or  – if your bank offers rebates on service fees if you have additional products with that bank, such as a mortgage or credit card.

Banking Services Fees What You Can Do to Reduce Your Service Fees Here are a few ways that you can reduce the monthly services fees that you pay to your bank: • If you are not sure about which service fee package is right for you, talk to your bank – they can help you decide. There are many different account packages available and your bank may offer an alternative package that better meets your needs at a lower cost. • Shop around for a banking package with lower or no fees. It’s easy to compare the banking packages available using the online interactive Banking Package Selector Tool available from The Financial Consumer Agency of Canada (FCAC). The tool is available both online and in print. Visit the FCAC at www.fcac-acfc.gc.ca or call 1-866-461-3222. • It’s also possible to pay no service fees at all if your bank waives your fees when you maintain a minimum monthly account balance (usually $1000), or if your bank offers rebates on service fees if you have additional products with that bank, such as a mortgage or credit card. • If you are a student or a senior, find out if your bank offers a no-fee package that suits your banking habits.

Questions? If you have general questions about banking in Canada, call the CBA’s Banking Information Line at 1-800-263-0231 or send an email to [email protected].

More Information CBA website: www.cba.ca/bankingbasics The Financial Consumer Agency of Canada: www.fcac-acfc.gc.ca

10

How to Make a Complaint About Your Bank

What You Need to Know • Banks are in the customer service business and they work hard at building longstanding relationships with their clients. • If a problem does occur, however, banks have a process in place to help their clients resolve complaints.

How to Make a Complaint About Your Bank The Four Step Process There are four potential steps to solving a problem with a bank.

Step 1 Talk to someone in your branch or bank service centre first. A customer service representative might be able to help you and resolve your concern. You can also ask to speak to a supervisor or manager.

Step 2 If the issue has not been resolved to your satisfaction, find out from your bank what to do next. In some cases, the next step is to contact a manager, local executive office or customer care centre. Ask a representative or manager at your branch for the number or address of who you should contact. Each bank has a brochure outlining the process for dealing with complaints, including contact numbers. Similar information is also available on the bank website.

Step 3 If the bank still hasn’t settled the problem to your satisfaction, contact your bank’s ombudsman, who is independent of the product areas of the bank. Banks’ internal ombudsmen help consumers resolve disputes with their bank. The CBA website has a full list of bank ombudsman contacts, including e-mail addresses and phone numbers, at www.cba.ca/resolvingproblems.

Step 4 Contact an external independent ombudsman service. There are two independent bodies that investigate complaints from individuals and small businesses about products and services provided by bank financial groups. The objective of these services is to provide impartial and prompt resolution of complaints and they are available free of charge.

Ombudsman Services

More Information

The two independent bodies that investigate complaints are the Ombudsman for Banking Services and Investments (OBSI) and ADR Chambers Banking Ombuds Office (for RBC Royal Bank customers only). Before you contact the OBSI or ADR Chambers, you must first try to resolve your complaint directly with your bank as described in steps one, two and three.

The CBA website has a full list of bank ombudsman contacts, including e-mail addresses and phone numbers at www.cba.ca/resolvingproblems.

Banking customers of RBC Royal Bank should contact ADR Chambers Banking Ombuds Office at 1-800-941-3655 or www.bankingombuds.ca. All other complaints should be directed to the Ombudsman for Banking Services and Investments (OBSI) at 1-888-451-4519 / 416-287-2877, e-mail: [email protected], www.obsi.ca.

Before you contact the OBSI or ADR Chambers, you must first try to resolve your complaint directly with your bank as described in steps one, two and three on the previous page.