Bank of Montreal Customer Loses Thousands in Phone Scam, Alleges Bank Negligence
A Bank of Montreal (BMO) customer in Toronto has come forward after falling victim to a phone scam, claiming that the bank did not do enough to protect him and has even imposed interest on the funds he lost. James Mathelier, a 63-year-old man, said that on April 24, he received a call from a person claiming to be a BMO employee. The caller stated that fraudsters had gained access to Mathelier’s bank account and requested a verification code that was sent to his phone to confirm his identity.
Despite knowing that he should not share the code over the phone, Mathelier shared it after the caller offered him the option to call the bank back. Three withdrawals were subsequently made from Mathelier’s personal line of credit: $7,500 and $1,452.72 on the same day, followed by an additional $7,500 the next day. The incident has had a significant impact on Mathelier’s mental health, causing him sleepless nights and anxiety.
Upon discovering the scam, Mathelier contacted both BMO and the police in the hopes of recovering the stolen funds. BMO later refunded him for the smallest amount withdrawn, but declined to reimburse him for the remaining two sums, stating that it was not responsible for losses incurred due to scams.
Mathelier expressed confusion over why the bank chose to refund a partial amount while denying any responsibility for the overall loss. Financial crime expert Vanessa Iafolla highlighted that by issuing a partial refund, the bank implicitly accepts some responsibility for the incident. She also noted that banks typically have processes and algorithms in place to detect irregular transfers, suggesting that BMO did not flag the suspicious activity promptly.
In addition to trying to recover the $15,000 taken from his line of credit, Mathelier is now burdened with increased monthly payments due to BMO charging interest on the fraudulent debt. Before the scam, his interest payments amounted to approximately $315 per month, but they have now skyrocketed to $550. Mathelier, who already faces financial difficulties due to rising rent and living costs, described feeling overwhelmed and choked by the situation.
Iafolla opined that the bank has the ability to suspend interest payments until the issue is resolved, rather than profiting from the victim’s situation. However, BMO did not provide an explanation for why it continues to charge interest on the stolen funds despite recognizing that they were part of a scam.
Phone scams of this nature, where fraudsters pose as bank investigators, are increasingly prevalent across Canada. The Canadian Anti-Fraud Centre has received 1,830 reports involving 681 victims so far in 2023, resulting in losses close to $6 million within the first half of the year. John Horncastle, a spokesperson for the Anti-Fraud Centre, indicated that these figures are likely just the tip of the iceberg, estimating that less than 10% of victims report such scams.
As these scams continue to evolve, financial institutions must work closely with customers to protect their accounts. BMO has provided tips to customers through email, warning them about ongoing fraud trends and emphasizing that the bank will never request verification codes, passwords, or answers to security questions via phone, email, or text. However, fraudsters may possess personal information that makes their scams more convincing.
Customers must remain vigilant in safeguarding their account information, passwords, and PINs. While it is essential to establish a partnership between customers and financial institutions, the responsibility lies with banks to ensure robust systems are in place to detect and prevent fraudulent activity promptly.
As the investigation into Mathelier’s case continues, the outcome will shed light on the bank’s accountability and the measures it takes to protect its customers from such scams.
