Case Studies

DIY investing leads to more than $100,000 in losses

Posted Thursday, June 17, 2021

Key lessons:

If you invest through a do-it-yourself account at an order-execution-only (OEO) firm, you can pay significantly less in fees than you would to an advisor. But, as a do-it-yourself investor, you take full responsibility for your investments and you accept the financial risk of your investing decisions. If you are a DIY investor, always:

• inform yourself about the securities you purchase and stay informed about them, including when they go through unusual changes such...

Consumer responsible for unauthorized transactions after not taking enough care to protect his debit card and PIN

Posted Friday, February 26, 2021

Key lessons:

• If you have a debit card, you have agreed to use it subject to the obligations in the cardholder agreement you made with your bank when the card was issued. Breaching these requirements can leave you responsible for any financial losses that occur.
• Cardholder agreements include a number of important obligations, including being careful to keep your card number, PIN (personal identification number) and bank passwords confidential at all times. If you have not protected...

Bank customer is a victim of multiple incidents of fraud

Posted Friday, December 18, 2020

Key lessons:

• Unfortunately, not all frauds are committed by strangers. “Familiar fraud” refers to situations where someone who has access to the personal information and financial documents of a family member or close friend assumes their identity to gain access to money in their accounts.
• Although banks have security measures to reduce the risk of fraud, consumers must keep their personal information such as security questions and PINs (personal identity numbers) confidential...

Investors incur significant losses and seek compensation, believing themselves to be unsuitably invested in high-risk securities

Posted Tuesday, November 10, 2020

Key lessons:

• Investment suitability is not determined on the basis of losses. Investment suitability is based on the risk profile of an investment at the time that advice about it was given.
• Every investment has the possibility of gains and the risk of loss, and the amount of each is usually closely matched. The advisor’s role is to recommend suitable investments, but they cannot predict the future nor guarantee results.
• Investors should monitor their investments and stay informed...

Bank errors when arranging a mortgage transfer lead to costly penalties for borrower

Posted Monday, August 31, 2020

Key lessons:

• Financial institutions are responsible for financial harm caused by their own administrative errors and delays.
• Consumers can protect themselves by ensuring that arrangements for time-sensitive transactions are finalized well in advance and carefully reviewing all paperwork to ensure it matches their expectations.

Consumer decides to transfer mortgage to a new lender

Mr. G held a mortgage at Bank A that was maturing. A few weeks before the maturity date, he met with a...