# Did CIBC screw us over?



## canadianrich (Mar 17, 2014)

My girlfriend and I recently went on a trip to the US. At the airport, we both took out US cash, both of us using our Royal Bank cards at a CIBC ATM the dispensed USD. This is extremely convenient, and the additional fees to use this service were clearly indicated by the machine: a very reasonable $2.50 USD from CIBC, plus a fee from Royal Bank which was $1.50 CAD.

However, I was later very surprised to see the exchange fee tacked on. I understand a 2.5% exchange fee is pretty common, but that's not what CIBC used that day.

Currency Exchange prices for that day show as 1.2868. My RBC Visa purchases went through at 1.3215. CIBC charged us 1.3887. This means on the $500 USD we took out, we would have paid $17.35 CAD through our credit card, but CIBC charged us $50.95 CAD for going through their ATM. That's pretty steep.

Is this typical? CIBC is so up-front about their transaction fees, and they are a highly trustworthy company, but I'm shocked to see this hidden exchange rate fee. Is it worthwhile to complain to someone over this, or do I chalk this up to a lesson learned?

Rich


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## AltaRed (Jun 8, 2009)

It depends on 'when' the exchange rate is calculated. At an ATM, you are getting cash instantaneously and the forex rate should be based off what exists (pehaps) at the moment. When you pay by credit card, money is not changing hands inmmediately. The forex rate may be based on the Noon rate, or the closing rate. You have to look up the forex methodology of both.

Lastly, what do the T's and C's of of CIBC say for cash transactions at their ATMs? What does RBC Visa say about their T's and C's for forex on their credit cards?


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## Market Lost (Jul 27, 2016)

The answer is yes, and no. Yes, you got slammed on the exchange, but no, I wouldn't say they screwed you over. The number one rule of traveling is never ever exchange money at the airport, especially at an ATM. You will always pay a premium for this, and it's the same if you used CIBC, or if you used one of the other foreign exchange agents.


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## james4beach (Nov 15, 2012)

Rich, you mentioned that the ATM did actually spell out the various ATM usage fees (2.50 + 1.50)

When you say CIBC charged you 1.3887, is that really on the portion after all the fixed fees are separated out? Or was there perhaps another fee such as "$5 fee to withdraw in USD"

The usual practice is that there are a number of fixed cost fees, such as ATM convenience fee, fee for using another bank's ATM, and perhaps a non-CAD transaction fee. Add those up and you're paying those fee $s no matter what amount you withdraw.

You should not include those various fixed fees when you calculate 1.3887

Now once those are eliminated, you can calculate the forex rate they charged you. If that rate really was 1.3887, or almost 8% above market forex fee, then I would complain. For USD/CAD an acceptable range is 2% to 4%.


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## canadianrich (Mar 17, 2014)

Hi james4beach,

The 1.3887 is the rate printed on my ATM receipt. My $300 receipt looks like this (my girlfriend took out $200, we did two separate transactions):

USD Requested: $300
USD Surcharge: $2.50
USD Total: $302.50

Conv Rate: 1.38870
CAD Total: $420.08

The ATM explicitly told me that there was a $2.50 fee from CIBC, and that there might be a fee from my bank (which I knew to be $1.50 for using a non-RBC ATM). As you can see, the $2.50 was charged in USD, so it then had the 1.3887 applied. The fees seem to be pretty small compared to the bad exchange rate.

I really thought it would be cheaper to take USD out of a Canadian bank machine as opposed to a US bank machine, but this was dead wrong. 



james4beach said:


> Rich, you mentioned that the ATM did actually spell out the various ATM usage fees (2.50 + 1.50)
> 
> When you say CIBC charged you 1.3887, is that really on the portion after all the fixed fees are separated out? Or was there perhaps another fee such as "$5 fee to withdraw in USD"
> 
> ...


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## OnlyMyOpinion (Sep 1, 2013)

I'd say they screwed you over but I also say it's the price you pay for "extremely convenient" as you noted. 
Live and learn (and buy banks).


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## Jaberwock (Aug 22, 2012)

You were ripped off.

Complain - You probably won't get anywhere, but if nobody complains then we will all continue to get ripped off forever.

Take the complaint all of the way. If you don't get any satisfaction from the CIBC complaints department, go to the Ombudsman's office www.obsi.ca then if you don't get satisfaction go to the Financial Consumer agency of Canada www.fcac-acfc.gc.ca/Pages/Welcome-Bienvenue.aspx


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## james4beach (Nov 15, 2012)

Yes I would complain too. That exchange rate rate is ridiculously far off the market rate, can't really be defended.

In USD/CAD conversions by debit and credit card, I've seen rates up to 4% (vs market rate) but never as high as the 8% they charged you


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## Beaver101 (Nov 14, 2011)

Jaberwock said:


> You were ripped off.
> 
> Complain - You probably won't get anywhere, but if nobody complains then we will all continue to get ripped off forever.
> 
> Take the complaint all of the way. If you don't get any satisfaction from the CIBC complaints department, go to the Ombudsman's office www.obsi.ca then if you don't get satisfaction go to the Financial Consumer agency of Canada www.fcac-acfc.gc.ca/Pages/Welcome-Bienvenue.aspx


 ... maybe a class-action suit might do better (ie. get some action)?


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## OnlyMyOpinion (Sep 1, 2013)

Really, CIBC tells you online today that $420 CDN will get you $309 US (1.3606). I'm not sure what it would have caculated the day you bought $US, but you got $302 at the airport rushing off on a canadianrich' holiday. So maybe you paid an extra $7 US.
https://fx.cibc.com/en-CA/buycurrency/

P.S. I'm not sure how this belongs in the Frugality category.


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## carverman (Nov 8, 2010)

1. Contact CIBC client care first. If they can't or won't help you contact:

2. CIBC ombudsman

https://www.cibc.com/ca/cibc-and-you/to-our-customers/service-commitment/resolving-complaints.html

(I got screwed over a few years ago by CIBC, and the only way I was able to get satisfaction was with the CIBC Ombudsman.)


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## Beaver101 (Nov 14, 2011)

^ The OP's problem with CIBC seems to be universal to all CIBC customers (or non-customers):

From the fine prints of CIBC Ombudsman's site: 

*Issues outside of our mandate:*



> Some banking issues fall outside of the Office’s mandate. These include:
> *Product pricing and the setting of interest rates (including lending, investment and foreign exchange rates)*
> *The setting of service fees (including NSF fees and mortgage prepayment costs)*
> Lending decisions and credit adjudication*
> ...


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## Rusty O'Toole (Feb 1, 2012)

Of course you got ripped off. That is what Canadian banks do, all day every day.


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## MrMatt (Dec 21, 2011)

They charged a bunch of fees and offered a crappy exchange rate.

They didn't do anything wrong, a complaint won't do anything.

Next time, change your money somewhere else, I've noticed even mall kiosks seem to have better rates.


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## My Own Advisor (Sep 24, 2012)

I would say it's typical because all CDN banks charge extra fees on top of fees associated with FX.

I doubt this is hidden. It's very likely in the terms and conditions of your card.

You are using RY cards at CIBC machines. First no-no in my book.

Second, I would suggest you take out USD before your trip, at your branch, and then own a credit card that does not charge FX rates on your USD purchases. This one is great:
https://www.chase.com/online/canada/amazon-ca-home.htm

Third, finally, make sure you know all the fees associated with using any card before you travel, anywhere. 

You can complain, but I'm not sure it will do you any good to do so.


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## Nerd Investor (Nov 3, 2015)

If you bank at RBC, look into opening a US account with RBC Bank US. It gives you access to cash from actual ATMs over there.


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## Spudd (Oct 11, 2011)

My Own Advisor said:


> Second, I would suggest you take out USD before your trip, at your branch


In my experience, going to money exchange stores (not at the airport) gives a better exchange rate than getting money at the bank branch.


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## My Own Advisor (Sep 24, 2012)

Spudd said:


> In my experience, going to money exchange stores (not at the airport) gives a better exchange rate than getting money at the bank branch.


Same. I just didn't know if OP had that option. I avoid banks unless it's about dividends.


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## OhGreatGuru (May 24, 2009)

I'm not clear on how OP found a CIBC ATM in a US airport. I don't think CIBC has much of a retail bank presence in the USA. I suspect this was an ATM for a 3rd-party bank, or even a "white" ATM, unaffiliated with any bank. Maybe they stuck a CIBC logo on it to indicate it would accept CIBC cards, but that doesn't tell you what hidden fees they may have. This transaction may have had to go through several corporate hands before it came to CIBC.

See this article for a general comparison of the cross-border banking services of the Big 5.
http://www.knightsbridgefx.com/crossborder-banking-solutions-for-canadians-4/

OP can try complaining to CIBC - maybe they can explain or waive the charges.

Foresight could have avoided this:
Using an RBC card in a "CIBC" ATM - always risky without knowing in advance about hidden costs;
Not setting up a $USD account or $USD credit card, as some CDN banks now offer for cross-border customers.
Not taking cash or USD travellers' cheques.


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## Market Lost (Jul 27, 2016)

OhGreatGuru said:


> I'm not clear on how OP found a CIBC ATM in a US airport. I don't think CIBC has much of a retail bank presence in the USA. I suspect this was an ATM for a 3rd-party bank, or even a "white" ATM, unaffiliated with any bank. Maybe they stuck a CIBC logo on it to indicate it would accept CIBC cards, but that doesn't tell you what hidden fees they may have. This transaction may have had to go through several corporate hands before it came to CIBC.


It's a bit ambiguous, but if you read it again you'll notice that the OP actually stated he was going to the US, and it was at the airport, which would indicate that it was at the Canadian airport. CIBC machines will actually dispense USD at most locations.


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## ian (Jun 18, 2016)

We bank with CIBC but we would never use them for foreign currency, foreign ATM withdrawals, nor do we use their Visa card for foreign transactions.

The service charges are too high. We do a fair amount of foreign travel so the savings we realize by not dealing with the banks really do add up. We buy our foreign currency at an FX store. Not long ago I ran into a CIBC teller in line at the FX store. She told me the store has better rates, even after her staff discount.

We have found that when these services are convenient, ie out of country medical or FX services, this convenience comes with a price.


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## OhGreatGuru (May 24, 2009)

Market Lost said:


> It's a bit ambiguous, but if you read it again you'll notice that the OP actually stated he was going to the US, and it was at the airport, which would indicate that it was at the Canadian airport. CIBC machines will actually dispense USD at most locations.


interesting.


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## ian (Jun 18, 2016)

We have seen the CIBC USD cash machines in several airports lately.

CIBC has been bombarding us with email etc offering an FX service. Not sure how it works as we were not interested. The gist of it was you order your FX on line and pick it up somewhere. No doubt the FX rates are high.


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## ian (Jun 18, 2016)

There must be lots of service fees in this business.

Logged into my CIBC on line banking today and a full screen add for CIBC pre loaded FX cards came up. USD, euros, pesos, and I think GBP.


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## james4beach (Nov 15, 2012)

If you really want to get back at CIBC and every other bank, learn how to do FX gambit trades. Do this over the years to convert large amounts and deprive the banks of thousands of dollars in fees.


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