# Major Bank screw-up...any recourse?



## tombiosis (Dec 18, 2010)

Let this thread be a reminder and warning...watch the banks like a hawk!

So I have been researching becomoming a DIY investor for some time...on here and elsewhere. As previously stated in different threads, I was concerned and fed-up with high MER mutual funds going nowhere, so I asked my FA about "couch-potato" investing with ETF's...he was going to charge me 150 bucks per purchase in brokerage fees, so I said nevermind, I will do it myself through a discount broker. I signed up for CIBC's "Investors Edge" back IN MAY! I went right to a branch to make sure the applications were done correctly, and opened 3 accounts: RRSP, TFSA, and a non-registered account as well. I signed all the forms, provided ID, everything. A few weeks later I get the welcome package (in triplicate) in the mail...great. I could see the accounts, (with no money in them yet), on my online banking page. 
I decided to wait on making any purchases, as I was leary on where things were headed in the markets, and promised myself that if the TSX dropped below 12,500ish I would pounce. Well...today was the day. So I call up investors edge to get the procedure straight, as it is my first time, and I don't want to make any errors. Turns out that they even though they have all my accounts on file, they hadn't received my signatures and ID copies that I made with the CSR at the branch back in May, and therefore I can't make any trades! So I go into the branch, (missing work for this) and of course the CSR no longer works at that branch, but the new guy with the same office says he will help me. After calling Investor's Edge, I am preparing to re-sign everything when he looks in a drawer and finds my 3 applications with signatures and copies of ID sitting there! 
So now I am forced to wait until everything gets sent over blahblahblah...not sure when I can trade blahblahjblah...
Needless to say I am pretty P.O'd at the bank for neglecting to send my stuff to I E...
Any advice out there on what (if anything) could be done about this? What would you do? I guess I should have been more diligent on my end, and confirmed that I was ready to trade when the time came. I should have never assumed that the bank had sent my stuff over without checking I guess. pretty frustrating, but somehow (unfortunately)not surprising!


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## jamesbe (May 8, 2010)

Meh, annoying but you'll be good to go tomorrow!


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## Four Pillars (Apr 5, 2009)

My advice is to just move on, make sure you can do trades and then you'll be good to go.


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## sensfan15 (Jul 13, 2011)

Hope for another slide tomorrow!


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## Dana (Nov 17, 2009)

I am not as relaxed about this as my fellow respondents. The fact that 3 applications with your personal information, photocopies of your ID and signature cards have been sitting in an unlocked or at least easily accessible desk drawer since May is *very* disturbing. I have been an employee of CIBC and Investors Edge and can tell you that they use to have strict audit procedures in place if paperwork was not received from the branch in a timely manner. 

I would put this experience in writing and copy the branch manager, a compliance officer at IE and IIROC (the governing body for IE) - actually, if the compliance manager for IE is copied, IIROC will be notified as a matter of procedure (so I am being told by the person reading over my shoulder)

Also, if you have would have realized a loss because of their error you may be entitled to compensation. Example: If you tried to purchase an ETF while the market was at 12500 and 2 days later when you actually were able to purchase the market had rebounded to 13,000, the brokerage may have to compensate you for the difference since the delay trade was their error. 

You shoud definitely pursue this. 

I am curious why others seem so laid back about this, are we just so accustomed to banks and large corporations messing up that we have become apathetic toward it?


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## m3s (Apr 3, 2010)

You might feel a lot less PO'd if the markets continue to crash?


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## jamesbe (May 8, 2010)

Dana, I'm laid back because there is nothing you can do but complain to a huge corp that will say, "works now toobp bad". What are you going to get? Not worth the time IMO, not like they are going to give hundreds of dollars for your trouble.

I'd be very surprised to see compensation, they would just blame you for not ensuring it worked. Nobody accepts blame anymore.


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## Abha (Jun 26, 2011)

No worries my good man. The market will continue downwards presenting you another opportunity to jump in.

One of the first lessons DIY investors get is that inevitably your broker will screw up.


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## Larry6417 (Jan 27, 2010)

*The squeaky wheel...*

Actually, I think the OP should complain. There is a banking ombudsman that takes consumer complaints against banks. See www.obsi.ca/UI/AboutUs/OurWork.aspx

However, it's unlikely that you would be awarded damages because the TSX is below 12,500 - allowing you to purchase at an even lower price. At worst, you're stuck with a brokerage that doesn't really care. At best, you're stuck with a brokerage that doesn't really care but will give you a few free trades to quiet you.


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## HaroldCrump (Jun 10, 2009)

Since you haven't bought anything in that investing account yet, now is a good time to close the account and re-open an account with a different financial institution.
In your letter to the branch manager, copied to the regional/territory manager, and whoever else you wish, make a clear and concise statement on why you are closing your account with them and moving your business to another institution.

As for the markets and your buying opportunity, you have missed nothing.
The correction is probably not over yet, and even if it is, there's another one round the corner.


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## tombiosis (Dec 18, 2010)

Thanks for all the replies...As stated, this type of thing seems to have become "par for the course" these days, and I doubt there would be sympathy from the bank...
@ Harold: Closing my account and moving on isn't really an option as I need a 100k minimum to qualify for cheap trades, and my employee RRSP account and mtg are both tied to CIBC. I can't imagine the hoops I would need to jump through to change all that, not to mention the possibity of more screw ups.
I think I will generate an email just so the incident is documented for future reference...


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## tombiosis (Dec 18, 2010)

*Update...!*

Well now i am getting even more P.O'd!
after all this screw up, I wrote a cheque yesterday, to be deposited into my new TFSA account, (which still can't be accessed because of the documents), for 5k, just to get my TFSA rolling with a few investments while the markets are down. I go online this morning to make sure the $ got into the account, and lo & behold, the CSR deposited the $ into My RRSP instead of my TFSA!
I just spent over 2 hours on the phone (supposed to be working and might get in ****) with investor's edge, and they say they can fix the problem by Tuesday, with no tax or RRSP implications...but I am really leary. I'm worried I will get a receipt for an rrsp deposit I didn't make, or will be taxed somehow months from now. I just don't trust anyone anymore with what they say!
So I call my branch to speak with the guy from yesterday who "helped" me to inform him of his mistake, and of course I can't reach him. I tried every extension until I got a person, and I asked for the manager, who, surprise surprise, isn't there today...In my business a manager HAS to be there, always!
I really wanted to get my 5k invested in something before leaving next week for holidays...If everything rebounds next week I will have missed a good oportunity to "buy low"... I know it might go lower still...and I know its only 5k...but this has left a real sour taste in my mouth. I can totally understand why a lot of people don't even bother and just get hosed by a FA...Seems that everything is harder than it should be.
Sorry for venting and thanks for all the knowledge from this website. i will put it to good use (I hope), once I calm down a bit...
sigh


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## HaroldCrump (Jun 10, 2009)

All the more reason to consider dumping this bank.
And $100K required for cheaper trades?
Most brokerages require half of that.
Even the stiff-upper-lip Royal Bank requires only $50K.

You shouldn't have to move your mortgage and work group RRSP.
Just your TFSA and personal RRSP.


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## Four Pillars (Apr 5, 2009)

tombiosis said:


> @ Harold: Closing my account and moving on isn't really an option as I need a 100k minimum to qualify for cheap trades.


You only need $50k in assets for the $10 trades. $100k for the $7 trades.


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## tombiosis (Dec 18, 2010)

*update!*

So...I figured I was good to go now that the bank had faxed all the stuff...the CSR at the branch told me Friday Aug 8th that by monday I could trade. Monday I was to leave for vacation, but I hung around to try and get a trade done before leaving...I decided to buy 100 shares of CNQ, which had fallen to 33.26 per share...I tried to do it and for some reason the account was still restricted! After calling the bank again, I decided to just forget it and leave for the cottage.
Of course, when I got back yesterday, CNQ was trading at over 4 dollars more...so the way I see it, their screw-up cost me a gain of 400 bucks!

Anyways, I just bought my first stock for my TFSA this morning!
100 shares of CNQ for 36.58 per...plus 6.95 comissions, (which for some reason I had to call Investor's Edge to get them to put that on my trading account...!?)
So...the adventure in owning actual stocks has begun for me...
Now to figure out my next buy...


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## hystat (Jun 18, 2010)

glad you got it working.... I too have had admin issues with investor's edge. They make it difficult for sure.
But for me, TD was many times worse.


tombiosis said:


> Now to figure out my next buy...


Maybe some bank stocks....


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## bobwatford123 (Aug 9, 2011)

Quick question....why were you writing a cheque to deposit funds into your TSFA? Why not just do an account transfer on the bank/brokerage page?
That being said on the other stuff...mistakes were made, I doubt you'll have any problems from here on out...as I said though (and I use TD)...I basically do everything myself now, so there is never a screwup (not that I've had problems either way).


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## tombiosis (Dec 18, 2010)

bobwatford123 said:


> Quick question....why were you writing a cheque to deposit funds into your TSFA? Why not just do an account transfer on the bank/brokerage page?


I had to write a cheque because I use PC Financial for daily banking...(no fees)...I used to be with CIBC, but when they stopped giving me no fee banking I pulled all my $ except I still have a mtg, VISA, and LOC there...not having a CIBC chequing account means that every time I want to deposit into investor's edge, I need to go to a branch. Not the best scenario, but it will do for now.


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## cannon_fodder (Apr 3, 2009)

I created a thread regarding screwups we've endured at Scotia. We left RBC DS (not because of screwups), BMO Investorline (poor systems and a few screwups) and now we have CIBC and TD being dragged through the mud. Is it really that hard for these banks to deliver on their core competencies?

Processes are useless if people don't follow them or if there aren't checks and balances. You'd think these banks would have figured this out after a hundred years.


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## kcowan (Jul 1, 2010)

I would document all your troubles and send it to OSFI as well as the CIBC CEO. While you will not likely get anything, they will have been put on notice that such shoddy treatment is not OK.

(I find that banks are all bad at account initiation. All their automation seems to be aimed at daily transactions, and so the unautomated stuff is really handled poorly.)


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## tombiosis (Dec 18, 2010)

*UPDATE...the irony of it all!*

So for those who took the time to respond to my thread, thought a quick update was in order...
Because of the screwup with getting investor's edge opened and running, the bank manager at the branch actually called me, and when I explained the situation he apologized, and offered to cover my aeroplan visa fees for the year!...120 bucks to me. yay! 
Soooo, I finally have the tfsa portion going, and i decide to get some money into my IE rrsp account. This is where the IRONY starts.
I go to my FA and tell him to sell 9k worth of units I have sitting in "Renaissance High Interest savings" within my rrsp at the FA's office, and please do a "transfer in kind" to my new IE acct... (remember, the whole reason for setting up these new accounts is to save the 125$ trading fee at the FA's)....
So the FA says that transfers must originate as a request from the institution where the money is going...not where it is coming from...? ok I say...
so I call IE...they say they can't initiate it without signatures, so I go to a branch, but will need to make an appointment. ok...do that...
the day comes and when I get there the CSR I have an appt. with is sick...but someone else helps me...I go through the whole LONG story again, and fill out the forms...takes at least 1/2 hour or more...then I wait...and wait...and about almost 2 weeks later i see the sale of 9k of units in the transaction recoprds of my main rrsp online...wait 2 days...still no $ in new acct...call IE..."takes up to 10 business days" she says...
5 days after the sale, I see that my rrsp acct has "re-purchased" the 9k of units...hunh?? I email my FA asking what is going on...he says that IE requested cash, then changed their mind, and asked for units as ir was a "transfer in kind"...AND changed their mind yet again and asked for cash...so the money should be there early next week!
So my FA apologizes, and for my troubles I can have 2 free trades (a 250$$ value) to be used within a year!
I find it pretty ironic that I am getting free trades now, when the whole reason for this fiasco was to save on the fees to make a few trades.
I am very frustrated with the whole financial system, because at first I was very excited and enthusiastic about this "DIY" investing process...now I am just tired and turned off. No wonder so many just follow along like sheep...lining pockets of fund salesmen. this has been a nightmare.
Sorry for the long post.


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## Four Pillars (Apr 5, 2009)

I've mentioned before on these forums that a large percentage of issues resulting from money (investments) transfers between institutions is because of lack of knowledge of the process.

While it sounds like there were mistakes made in your case, you obviously didn't do any research on the process. This article might have helped you:

http://www.moneysmartsblog.com/t203...-account-at-different-financial-institutions/

DIY investing involves a fair bit of learning. You can do the work upfront and save yourself some hassle or learn by trial and error as you are doing.

"So my FA apologizes, and for my troubles I can have 2 free trades (a 250$$ value) to be used within a year!"

That has to be a typo right? Nobody pays $125 per trade.


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## tombiosis (Dec 18, 2010)

Four Pillars said:


> "So my FA apologizes, and for my troubles I can have 2 free trades (a 250$$ value) to be used within a year!"
> 
> That has to be a typo right? Nobody pays $125 per trade.


No typo at all FP...that is what the full service brokerage in question charges, and the only reason I had to open discount brokerage accounts. If my advisor would let me convert my holdings to a couch potato style without charging me 125 per etf/stock trade, I wouldn't even be in this mess.
also, where did I make "mistakes"? I only followed the instructions given by the bank and investment firm...


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## MoneyGal (Apr 24, 2009)

He isn't saying you made mistakes. 

I can confirm that:

- you can't provide trading instructions over the phone

- transfer requests may only come from the institution to which the funds are being transferred. 

If you think about it for a moment, this makes sense - the new institution must be willing to accept the transferred funds/units - there must be a valid account open and available, etc. 

Everything you described in the most recent set of interactions is absolutely par for the course: the two-week waiting period, having to go into a branch to confirm the trades, even the transfer in cash and the re-purchase of securities. 

As an aside, I'm still not sure, after reading your post multiple times, whether you in fact wanted a transfer in kind or a transfer in cash. You said you told your advisor to sell the units, but then transfer them in kind (not in cash) to the receiving institution - this doesn't make any sense.


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## Four Pillars (Apr 5, 2009)

I was actually referring to mistakes made by the institutions, but you also made some as well - trying to start the transfer at the current institution might be considered a mistake. As MG noted, transferring cash "in kind" would be another error. 

My point was that you make it sound like you just went through some incredible, harrowing experience when in fact you just did a perfectly normal transfer.

I'm not even sure what the point of your post was or why I'm responding. 

My suggestion is just to enjoy your new discount brokerage account and move on.


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## tombiosis (Dec 18, 2010)

I did make a mistake by saying to "transfer in kind", because I wanted to transfer cash...not units...so I could buy something different. I told them my plan, but I guess I used the wrong language, and assumed they knew exactly what I meant.
I read the article you posted as well...thank you for that. 

I was unaware that there was such a long waiting period for transfers,(and they never mentioned it) especially between 2 institutions that both fall under the CIBC umbrella.

The point of my post was that all these new accounts were opened to save on trading fees, and I ended up getting some free trades at the full service brokerage because of the mistakes that were made by both institutions...and I also wanted to point out, for other readers benefit perhaps, to be careful with this sort of thing...remember, I have been working on this since May!
4 months plus just to get a few accounts opened and transfer some $...that is pretty harrowing in my opinion.

I joined this site to learn about investing on my own, and I have been devouring many books and blogs on investing....I am not an expert. My experiences with getting set up with my own discount brokerage to try and minimize these fees has been frought with 4 months of frustration and bank errors...


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## Lephturn (Aug 31, 2009)

It's not completely painless, and I have not done a lot of trading with them yet, but so far Questrade has made account setup and transfers the easiest of any I have tried so far. Granted I've only really done RBC-DI and some of the fund companies, but Questrade was really slick. Most of the account setup stuff I did completely online including electronic signature it was very slick. Account set up and cash transferred in days at Questrade instead of weeks with RBC-DI.

I've been meaning to yank some more to Questrade - I'll let you know if that's a 2 week ordeal (which I expect) or if it's better. The account setup and initial funding was WAY better, but with a transfer the current institution is motivated to drag their heels and I presume they will do so to the max.


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## tombiosis (Dec 18, 2010)

Thought I should resurrect this old thread with an update, as incompetent bank employees have done it again! I tried to transfer some funds again today from my full service brokerage to my Investor's edge account..for the second time in 3 years or so).I phoned a CIBC branch to set up an appointment first, explained what I wanted to do. The first person who answered my call didn't know how to do a transfer, so she forwarded my call to another employee, who also didn't know how, who forwarded me to a 3rd employee, where I got a voicemail box! I zeroed back out to reception and started over...the person who answered put me through to a nice gentleman who said "sure, I can help with that" so I head in there with an appointment on my lunch break. Tell my plan when I get there, and he prints out a form for me...I look on the form and there is nowhere to put what I want to transfer! wrong form I say...he phones someone, then prints out a different form. So I say is it ok if I fill it out for you..."sure" he says. I double and triple check my work, making sure the "receiving institution" and the "delivering institution" account numbers are correct, then I sign the form and give it to the nice man. He makes a copy for me and I thank him and leave. 2 hours or so pass, and I decide to hop on my laptop and check my accounts. I notice my Investors edge account is showing a negative balance! this can't be I say...so I call the guy right away and he answers. He says that is impossible, I didn't even do anything to your account. So I call Investors edge. they tell me that my entire holdings are being transfered as we speak to my full service brokerage! i say this cannot be...I was just in there 2 hours ago...how can this happen so fast? The IE guy says that a transfer in kind was initiated from the "smart system" at the CIBC branch I was at. Apparently the guy reversed my account numbers and didn't even use my signed form to initiate this! I have the form right in front of me and the account numbers are correct! What is the point of a form if the bank employee is just going to type it in the system himself? The IE guy tells me the signature is not required, which I don't get. 
All I wanted to do was transfer some fund units (ATL5000) from my full service brokerage to my IE so I could deploy the funds myself, cheaply. instead, my whole IE account has been drained, plus it is negative 6k now! IE says they hope to fix it tomorrow...the bank guy screwed up they say. So I call the guy back and ask to speak to his boss. Of course she is "unavailable" so I hang up, call right back and ask for the manager. She agrees that I should be upset, and apologizes, saying she will "try" and fix the problem, the she adds that "at least it won't change my "position" because all the stocks and funds won't be sold...so i say yeah, but what about the $ that is supposed to in my account...it isn't there to use so I can't buy anything with that account...what if I had planned on making a major purchase or whatever.
So now I have no idea what is going on...and I am supposed to wait until tomorrow. what a joke! I can't believe they have done it to me again! 
And please, don't anybody say to just switch banks! I have enough of bankers for awhile...I am sooo frustrated with the whole thing. twice I have tried to do a simple transfer, and twice they have botched it...this time really badly!
sorry for the long winded post...but is there anything I can do besides wait and see what happens? what would you do?


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## Eclectic12 (Oct 20, 2010)

tombiosis said:


> ... I was unaware that there was such a long waiting period for transfers,(and they never mentioned it) especially between 2 institutions that both fall under the CIBC umbrella ....


Yup .... I can remember seeing an article after I waited six weeks or so for my transfer (same financial group to same financial group) where the industry group was highlighting the transfers were taking too long.

In my case, there was no mistake on the paperwork and it took six weeks. 

The main difference I can recall is that I'd setup the discount brokerage accounts a couple of months before (one visit) and then arranged for the transfer with the receiving brokerage (one visit for the transfer paperwork).

I've had to transfer a LIRA since and that was also one visit for the paperwork ... but lo and behold, the "In Kind" investments showed up in the brokerage account in about a week.


Cheers


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## tombiosis (Dec 18, 2010)

well...somehow this time my entire holdings were transferred in kind in under 2 hours!


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## Eclectic12 (Oct 20, 2010)

tombiosis said:


> well...somehow this time my entire holdings were transferred in kind in under 2 hours!


*wow* ... I would not have expected that.

It confirmed that YMMV ... :biggrin:


Cheers


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## Beaver101 (Nov 14, 2011)

^^^ & ^^ - wished I saw this thread earlier. 

*tombiosis*, without going into details of my own experience on a LIRA transfer, I just want to say you're not alone with getting bad experience(s) with the banks. Service will get worst before it gets better. Your post here tells all more the truth the banks couldn't give a rataxx crap about earning or keeping your business as they're "too big" to fail". Keeping complaining until you're satisfied with the results - take it right up to the top, to the CEO if needs to. Good luck.


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## Beaver101 (Nov 14, 2011)

Not to hijack the thread but here's a *REAL bad *screw-up by a bank http://www.thestar.com/business/personal_finance/2014/01/31/rbc_pays_15000_for_privacy_breach_roseman.html ... :disgust:


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## tombiosis (Dec 18, 2010)

*It just gets worse!*

Another update:
I spoke to the rep who wrongly transfered all of my holdings late Friday afternoon, and he assured me that everything was back in place, and I just needed to wait now for my original request of transfering some HISA funds...great I said. So I hop online and the system was down for maintenance. The rep assured me I would see everything corrected when the system was back up.
Well...I just went online and now I see that instead of simply reversing their original mistake, they have now transferred a whole bunch of holdings back the other way! I never requested any of these additional transfers. we are talking about thousands of dollars here! It is the weekend so there is no one I can speak to about this, and again I am left worrying and wondering...
what a joke! I am simply blown away by their gross incompetence.
:upset::frown::neglected::mad-new:


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## Eclectic12 (Oct 20, 2010)

^^^^

Wow ... that sucks .... 



I'd say "Cheers" but that's not likely ... :rolleyes2:


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