Case Studies

The client was shocked to discover that a cheque for $4,900 has been cleared through his account the previous month – and he didn't write it. He informed the bank immediately, which produced the original cheque. It was obvious that the signature was a forgery, and the client asked for the money back.

The client was a low-risk investor looking for safe, income-producing investments. He wanted to avoid the volatility of the stock market, although he would tolerate a small share of his portfolio in equities as an inflation hedge.

The client's investment advisor recommended an investment in Air Canada debentures, suggesting they were “not very risky." He failed, however, to share the prospectus for the debenture which contained rating agency descriptions ranging from “lower quality" to “speculative and non-investment grade." More than $43,000 of the client's money was invested in the debentures.

When this couple went to a new advisor in 1995, they were earning a combined income of about $55,000, had no debt and had accumulated about $300,000 in liquid and fixed assets.

The client lived and worked overseas, but continued to use a Canadian bank account and her Canadian bank access card at ATMs. From overseas, she complained to her bank that a withdrawal for about $1,100 was made at a nearby ATM without her knowledge.

A customer advertised stereo equipment for sale on the Internet and was contacted by an overseas purchaser in Amsterdam, who agreed to buy it for $1,600.

For payment, the purchaser suggested that his American client, who owed him money, pay the customer $7,800 and the customer could then wire the $6,200 difference to the purchaser. A Canadian business associate of the purchaser would pick up the stereo equipment. The customer agreed to this proposal and asked to be paid with a certified cheque.

A few years after immigrating to Canada, a middle-aged couple opened an account with a full service investment firm and deposited $80,000 from the sale of their home in the UK and the husband's severance pay.

Nearly three-quarters of a 91-year-old client's account at a full-service brokerage firm was invested in a bond mutual fund. The investment advisor convinced the client's son, who held Power of Attorney for the client, to switch the investment in the no-load bond fund to the back-end load version of the same fund. The mutual fund company paid the advisor and the brokerage firm a $30,500 commission for the switch.

A couple decided to sell their house and buy one better suited to their needs. They contacted their bank and inquired about their financing options for their future house. They also asked about the effect an early discharge would have on their existing mortgage and were advised that an early discharge would result in the bank charging them a $4,000 prepayment fee.

An established merchant specializing in product sales through telemarketing decided to begin accepting credit card payments. His bank set up a merchant credit card account during a brief exchange over the phone and he was faxed documents to sign.

A client and his friend went to a night-club one evening after having several drinks at home. The client was intoxicated by the time they arrived at the club, but he ordered and paid for a round of drinks. He then left his wallet containing his bank debit card on the table while going to the washroom. When the client returned to the table he did not notice that his wallet was gone. Shortly afterwards, the client and his friend left.