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Case Studies - Banking

  • Misunderstanding mortgage prepayment terms

    One year after signing for a five-year term mortgage, the client decided to list her property for sale. At the time of closing, she discovered that a substantial penalty was charged by the bank in order to pay out her mortgage. The client had been under the impression that the mortgage prepayment penalty would equal three months' interest. She was prepared to pay that amount but was surprised to find out later that the actual penalty would be based on an Interest Rate Differential, resulting in a much larger penalty amount.

  • Funds withdrawn by divorced individual's partner

    Due to his impending divorce, a client went to a local bank branch to remove the credit room available on a joint personal line of credit by reducing the limit to an amount just above the outstanding balance. The client was advised that it may take up to five business days for the paperwork to go through but that the changes had been made.

  • A "friend" took advantage of an elderly woman

    An 82-year-old woman received a letter from her friend in which the friend admitted she took $1,940 from the client's bank account before leaving the country. The client immediately informed both the police and her bank.

  • PIN mailed to wrong address

    A client opened an offshore US dollar savings account through the Canadian branch of a foreign bank. For regulatory reasons, the Canadian branch's role merely to pass on the account opening information to the international head office. The servicing of the client's needs was to be done by the foreign bank directly through its call centre.

  • Bank closed customer's accounts

    A client's small business received notice that its accounts were to be closed by the bank in two weeks. The client was shocked, saying he had a long-standing and satisfactory relationship with the bank and that the bank would not provide reasons for the termination of the relationship. The business owner, originally from a Middle Eastern country, claimed that racial profiling was a factor in the bank's decision.

  • Consumer alleges lost opportunity when reward dollars are at risk

    When shopping for a credit card in 1993, the client was attracted to one of his bank's cards which included a reward program for first-time homeowners. The more spent with the card, the more he accumulated reward "dollars" which could be credited toward an undiscounted (i.e. posted rate) mortgage from the bank.

  • Mortgage prepayment penalty still applies despite poor service

    A couple took out a mortgage from a bank, agreeing that their payments would include property taxes that the bank would remit to the city. A month later, they received a notice from the city saying their taxes were due. After some finger-pointing about whether the bank's or clients' lawyer was to blame, the bank agreed to reprocess the paperwork to make sure the taxes would be paid automatically. Four months later, another notice arrived from the city: their taxes were overdue. Upset with the two missed payments, the couple told the bank they were considering moving the mortgage because of the possible impact on their reputation with the city and their credit ratings.

  • Participating in the Home Buyer’s Plan (HBP) twice

    A client was solicited by a bank mortgage broker for a mortgage for his new house. They discussed the Home Buyer's Plan (HBP) option, a government sponsored program that allows consumers to withdraw up to $20,000 from their RRSP without penalty to buy or build a home.

  • Divorced partner refused to help repay joint line of credit

    The client and his now ex-wife had a joint unsecured line of credit with $8,800 owing when their marriage ended. Neither was willing to make any payments on the line. Before long, the bank's collection centre contacted the client. He told them to contact his ex-wife and said that he would not be making any payments.

  • Bank responsible for inconvenience due to undisclosed mortgage documents

    A couple decided to sell their home in a major city and relocate to a smaller town. They made arrangements through their longtime banker to apply for mortgage financing for their new home. The mortgage application was completed and approved by the bank. Prior to the mortgage closing date, a bank representative met with the couple to finalize the application and insurance documentation. The couple then made arrangements for moving.


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