Canada Bank Fraud: 89-Year-Old Loses $1.7M in “Bank Investigator” Scam — Why Protections Must Improve
Canada Bank Fraud cases are reaching alarming new heights. In one of the most shocking incidents of 2024, 89-year-old Victoria resident Ray Anholt lost his $1.7 million life savings in a sophisticated “bank investigator” scam.
Over six months, scammers spoofed legitimate bank numbers, sent fake government letters, and instructed Mr. Anholt to withdraw cash and purchase gold using large bank drafts—only to hand it over to fake couriers. Despite repeated large withdrawals, CIBC and RBC failed to stop the transactions. Both banks declined interviews; RBC stated only that the matter was “resolved.” A courier was arrested, but the stolen funds are likely gone forever.
The Growing Scope of Canada Bank Fraud
According to the Canadian Anti-Fraud Centre, Canadians lost over $643 million to bank fraud in 2023, with police-reported fraud rising another 12% from 2022 to 2023. These numbers show that fraud prevention measures are falling behind as scams become more sophisticated.
Lessons from the UK’s Fraud Reimbursement Model
The United Kingdom offers a proven model for tackling bank fraud and authorized push payment (APP) scams. After the Supreme Court’s Philipp v. Barclays decision confirmed that banks must process customer instructions unless contracts say otherwise, regulators shifted responsibility to financial institutions.
Under the Financial Services and Markets Act 2023 and the Payment Systems Regulator’s new rules (effective October 2024), banks must reimburse victims of APP fraud up to £85,000 per claim within 5–35 business days. Costs are shared between sending and receiving providers, encouraging proactive fraud detection.
Reimbursement is denied only if the customer acted fraudulently or with gross negligence, and the burden of proof rests with the bank. Consumers must follow clear warnings, report scams promptly (within 13 months), and cooperate with investigations.
Canada’s Next Steps in Combating Bank Fraud
Canada is beginning to move in a similar direction. The federal Bank Act review (through June 30, 2026) is considering stronger duties for banks to pause suspicious payments, introduce customer “safety switches” (such as disabling wire transfers), establish national fraud-prevention standards, and shift more loss liability to financial institutions.
Legal momentum is also growing. The BC Court of Appeal’s ruling in Zheng v. Bank of China allows claims to proceed against banks that fail to inquire or warn customers about potential APP scams. In Quebec, Bill 72—though not yet in force—requires refunds for unauthorized debits over $50 unless the consumer acted with “gross fault,” and even for authorized debits if the bank ignored strong fraud indicators.
How Canadian Banks Can Fight Canada Bank Fraud Now
To stay ahead of the escalating Canada Bank Fraud crisis, financial institutions should:
- Invest in fraud detection on both sending and receiving payment rails.
- Train frontline employees to recognize red flags, ask the right questions, and escalate suspicious transactions.
- Empower customers with tools like real-time alerts, optional wire shut-offs, spend limits, and multi-factor authentication.
- Revise account contracts to allow banks to delay or refuse suspicious transfers and clarify liability terms.
- Educate vulnerable groups, especially seniors and youth, about APP scams and how to report them quickly.
- Prepare operationally and financially for potential reimbursement frameworks, including cost-sharing with counterpart institutions.
Protecting Canadians from Bank Fraud
As Canada modernizes its banking regulations, the goal must be clear: protect consumers while holding financial institutions accountable for preventing and reimbursing Canada Bank Fraud losses. Until these safeguards are in place, public awareness and proactive bank policies remain the strongest lines of defense.
For expert insights or to discuss policy and industry best practices, contact Samantha Gale at s.gale@privatelenderassociation.ca