Alberta woman scammed over canceled wire transfer
Scarred by her mishap with a client, Christine Mason says she will now demand be paid in cash.
Some financial institutions, such as credit unions, allow their customers to cancel electronic transfers, even if the recipient of the transaction has set up an automatic deposit that is supposed to be more secure. An Edmonton resident found out the hard way.
The facts date back to September. Christine Mason is happy to have found a customer interested in the power tools — a cordless grinder, charger and two batteries — that she had listed for sale on a Canadian classifieds site.
The amount of the sale is set at $480, and the buyer, who says his name is Steve, explains that he does not have enough cash in his possession and offers to make an electronic transfer.
Christine Mason nods. After inspecting the tools, Steve opens a banking app on his phone, fills in the recipient's email and the amount of money, and hits send. Christine Mason instantly receives a notification that the transaction has been completed.
After Steve leaves, Christine Mason checks the banking app on her phone, checks out. expecting the deposit notification to appear any minute now. I checked constantly, she says. It kept me up all night.
In the morning, there is still no money in his account. She then calls her bank, TD, who explains that $480 was indeed transferred to her account shortly after 9:00 p.m., but the transaction was reversed about an hour and a half later.
The customer service rep also tells him that the sender's first name was actually Riley, not Steve, but he can't tell which bank he sent from the transaction, for confidentiality reasons.
After being contacted about this by the program Go Public,from CBC/Radio-Canada, the bank ended up depositing $480 into Christine Mason's account as a gesture of goodwill.
The Edmonton resident had her bank account set up with autodeposit, a feature touted as safer to protect against the risk of fraudsters intercepting funds, as money is deposited directly into an account, without the need, for example, to respond to a security question.
Yet a test conducted by CBC/Radio-Canada reveals that some electronic transfers can be canceled, even when the recipient has an automatic deposit, depending on the financial institution from which the money is sent, like a credit union.
Mattias Eyram, a software engineer, who has worked in fintech and banking, says the Interac system used for wire transfers in Canada is not immune to unpleasant surprises. It's good that people know there are risks, he warns.
“You don' you're not really protected until you see that money in your account [by checking your balance]. »
— Mattias Eyram, software engineer
Client Steve walked away with a cordless grinder, charger and two batteries without paying the $480 he owed Christine Mason.
Christine Mason says she was very shocked to learn from an official at her bank that wire transfers, even to accounts with automatic deposit, can sometimes be reversed, even up to 24 hours later.
Yet we are constantly told that [automatic deposit] is the best way to go, she notes. This is really false advertising.
All the major banks call electronic transfers safe and secure, but they don't mention the possibility that the sender can stop the transaction even after the transfer appears to have been completed.
The Go Public show ran several tests with customers and, in all cases, senders were able to cancel wire transfers when the recipient had not yet answered the security question. Electronic transfers expire after 30 days.
Financial technology expert Mattias Eyram urges financial institutions to be more transparent with their customers.
Mattias Eyram studied how money is transferred from one financial institution to another. There's definitely a disconnect between what's actually happening and the information being displayed, says the fintech expert. He also argues that financial institutions should not tell customers that a transaction has taken place until it has actually happened.
After the mishap from Christine Mason, Ashleigh Murphy, a spokesperson for TD, said in a statement that the bank is reviewing how to update the wording of its Autodeposit feature, to clarify all the nuances for [its] customers. /p>
Christine Mason, for her part, says she will still sell items online, but will now require cash.
With information fromErica Johnson and Kimberly Ivany