Retired teacher fights bank over stolen $18K
Ottawa man holds BMO responsible for fraud, but they say he's liable
An Ottawa man continues to fend off debt collectors who want him to repay some of the $30,000 obtained from his credit card and line of credit — and sent overseas from his bank account.
Peter Macleod, 80, a retired teacher, holds the bank and credit card company responsible for the fraud, while they contend he is liable for the misuse of his account.
Bank of Montreal officials managed to recover one global money transfer worth $12,000 after Macleod notified them of the fraud. They have pursued him for the $18,000 balance ever since.
The bank and collection agency have offered to reduce his outstanding debt, but Macleod has refused those offers because he believes he did nothing wrong.
“I feel abused, harassed, embarrassed,” he said in an interview. “This has dominated much of my normal sleeping time: I've been composing letters in my head for the past year and a half.”
Macleod signed onto his online Bank of Montreal account on Aug. 16, 2022, and discovered that $30,000 had been sent overseas from his account during the previous 48 hours without his approval. The money was sent to Italy using several global money transfers (GMTS).
GMTS were also involved in the crime perpetrated on federal government research scientist Katya Feder, who lost $14,500 when a fraudster somehow obtained her banking information and sent the money overseas. She was tricked into supplying a one-time passcode. Postmedia wrote about Feder's case last week. In Macleod's case, as soon as he discovered the fraud on the morning of Aug. 16, he immediately went to his BMO branch to address the situation.
Bank officials discovered four unauthorized global money transfers from Macleod's account.
Cash had been deposited into Macleod's account through advances ($20,000) on his BMO Mastercard and from a line of credit ($10,000) attached to the account. The money was converted to Euros and sent to Italy using GMTS.
BMO recovered one of the transfers, froze Macleod's account, issued him a new credit card and launched an investigation.
In December 2022, BMO investigators concluded the transactions were completed by someone who used Macleod’s bank card number and password.
The logins, investigators said, were from a device previously registered with the bank, and the transactions were completed with one-time verification codes that were correctly entered.
As a result, BMO investigators said, they could not confirm that the cash advances or global money transfers were fraudulent.
They denied Macleod’s request to be compensated and said he was responsible for the money debited to his line of credit and credit card.
“You are responsible for and must pay the total debt,” senior investigator Raj Attwala wrote to Macleod. “This applies whether or not you incurred the total debt, whether or not the total debt exceeds your credit limit, and regardless of how the total debt was incurred.”
Macleod was both mystified and outraged.
He did not lose or misplace his phone, Macleod said, adding that no one used his home computer during the two days during which the transactions were completed.
What’s more, Macleod said, he had his computer scanned by a local computer firm for malware, and it was given a clean bill of health.
He has never used a global money transfer or drawn on his line of credit, Macleod said, adding: “It was completely abnormal. It has nothing to do with my pattern of banking, so I don’t understand why this wasn’t flagged.”
Macleod went through several levels of appeal inside the bank — they were all denied — and wrote directly to BMO CEO Darryl White before taking his case to the Ombudsman for Banking Services and Investments.
The ombudsman is an independent dispute resolution service for consumers and business with unresolved banking complaints. It is funded by the banking industry.
In May 2023, the ombudsman’s senior investigator endorsed BMO’S findings in the case, saying the transactions had been completed using Macleod’s registered mobile device, along with his debit card number and password.
The investigator concluded the bank took reasonable steps to verify that Macleod authorized the transactions by issuing a one-time verification code.
In a letter to Macleod, BMO noted that the electronic banking services agreement he signed states that he was “liable for any losses resulting from unauthorized activity.”
“In the absence of other information,” BMO said, “we concluded that you contributed to the unauthorized use of your account by failing to keep your card number, online banking password and onetime passcodes confidential.”
According to Macleod, he has fielded more than 100 phone calls from the bank’s debt collectors during the past year, demanding that he address the $18,000 debt.
Macleod contends that there’s no evidence he did anything wrong and that the bank’s conclusions are based on “supposition.”
He says he’s being unfairly punished for having his identity stolen — and for inadequate bank safeguards against fraudulent activity.
“Clients need to be very wary, especially seniors like me,” he said.
BMO did not respond to a series of questions about global money transfers. Postmedia sent written questions to the bank, asking if it produced reports on fraud trends and whether GMTS been identified as a vulnerability.
Also, the newspaper asked whether or not BMO customers could ask to eliminate GMTS from their account services or obtain a lower transfer limit.