Difference between revisions of "Your Bank Account"

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{{Dial-A-Law TOC|expanded = credit}}
{{Dial-A-Law TOC|expanded = credit}}
This script discusses your bank account and related service charges, NSF cheques, bank errors, stolen PIN numbers, and joint accounts.
This script discusses bank accounts and related service charges, NSF cheques, bank errors, stolen PIN numbers, and joint accounts.


==You have a written agreement with your bank==
==You have a written agreement with your bank==
People usually don’t think much about their relationship with the bank. But the important details are always set out in writing. When you open a bank account, you typically have to sign a number of forms. One form is usually a signature card, so that the bank has a record of your true signature. For a chequing account, you have to sign a form to obtain personalized cheques. But at least one of the documents you sign contains the terms and conditions by which you agree to let the bank operate your account.
People usually don’t think much about their relationship with the bank. But the important details are always set out in a written agreement. When you open a bank account, you must typically sign some forms. One form is usually a signature card, so that the bank has a record of your true signature. For a chequing account, you must sign a form to obtain personalized cheques. But at least one of the documents you sign has the details (that you agree to) on how the bank will operate your account.  


==Different banks use different forms of agreement==
==Different banks use different agreements==
Most of the agreements contain similar terms, but the only way to find out exactly what you’ve agreed to is to get a copy of the document from your bank and to read it.
Most of the agreements have similar terms, but the only way to find out exactly what you’ve agreed to is to get a copy of the document from your bank and read it.  


==Do you automatically get overdraft privileges?==
==Do you automatically get overdraft privileges?==
No. If you have a personal chequing account, you expect your bank to honour your cheques when you write them. But unless you’ve arranged in advance for overdraft privileges, your agreement likely says that the bank only has to honour a cheque if there’s enough money in your account. And if the bank chooses to allow you to go into overdraft, they can charge you interest at a rate determined by the bank. If you’ve arranged for overdraft privileges, make sure this is recorded in writing. Note that if you pay for goods or services and your bank doesn’t honour your cheque because you don’t have enough funds in your account, you could end up with a poor credit rating.
No. If you have a personal chequing account, you expect your bank to honour your cheques when you write them. But unless you’ve arranged for overdraft privileges (where the bank will honour your cheque even if you don’t have enough money in your account to cover it) your agreement likely says that the bank must honour a cheque only if there’s enough money in your account. And if the bank lets you go into overdraft, they can charge you interest at a rate they set. If you’ve arranged for overdraft privileges, make sure this is recorded in writing. If you pay for goods or services and your bank doesn’t honour your cheque because you don’t have enough funds in your account, it could hurt your credit rating.  


==What about service charges?==
==Are there rules on service charges?==
Depending on your account, you may be charged for the cheques you write and for other services that the bank provides. For example, every time you go into overdraft, you may have to pay a certain minimum charge in addition to interest. Or you may have to pay a service charge every time you use a bank machine or ATM (automated teller machine). While your account agreement likely doesn’t say specifically what those service charges are, it probably says that you agree to be bound by the bank's general schedule of rates and that the bank may debit your account for any charges that the bank may establish from time to time.
Service charges vary a lot between banks and accounts. Depending on your account, you may be charged for the cheques you write and for other services that the bank provides. For example, every time you go into overdraft, you may have to pay an overdraft fee, plus interest. Or you may have to pay a service charge every time you use a bank machine or ATM (automated teller machine). Often banks will have package deals with a set monthly charge for a certain number of transactions. They may also waive fees if you keep a minimum balance in your account. While your account agreement likely doesn’t say specifically what cost service charges are, it probably says that you agree to be bound by the bank's general schedule of rates and that the bank may debit your account for any charges that the bank sets from time to time.  


Now, when you open an account, banks must tell you what their service charges are, listed in their information brochures and posted on their websites. So if you’re looking to open a bank account, shop around between banks to find the account option that best suits your needs. But remember that most banks will change these from time to time, and if your agreement permits, this will be done without notice to you. Even if your agreement requires the bank to notify you about changes in your service charges, the bank can generally do this by mailing a notice to your address, and they don’t need your consent to change these charges.
When you open an account, banks must tell you what their service charges are. The charges are normally listed on their websites, too. So if you’re looking to open a bank account, shop around to find the account option best for you. Most banks change their charges periodically, and if your agreement permits, this will be done without notice to you. Even if your agreement requires the bank to notify you about changes in your service charges, the bank can generally do this by mailing a notice to your address, and they don’t need your consent to change these charges.


==What about “NSF” cheques?==
==NSF cheques==
If someone pays you with a cheque written on another bank account, normally you take that cheque to your own bank to cash or deposit it. Your bank will typically accept cheques drawn on other banks and present them to those other banks for payment – or to be "cleared," as it's called. Unfortunately, sometimes a cheque doesn’t clear, and it’s returned to your bank stamped "NSF" or "Not Sufficient Funds.
If someone pays you with a cheque written on another bank account, normally you take that cheque to your own bank to cash or deposit it. Or you deposit it using your phone. Your bank will typically accept cheques from other banks, credit the money to your account, and present the cheque to those other banks for payment—or to be cleared. Unfortunately, sometimes a cheque doesn’t clear because there’s not enough money in the account, and it’s returned to your bank stamped ''NSF'' or ''Not Sufficient Funds''.  


Your agreement with your bank says that the bank can debit your account for the amount of the NSF cheque – whether or not you’ve cashed it or received the funds. Even if your bank is slow and ignores the normal rules about clearing cheques in a timely fashion, it’s usually the customer who gets stuck. In rare cases, where the bank's delay results in a cheque not clearing, you may have a claim against your bank, but even this may be limited or denied by the terms of your agreement.
Your agreement with your bank says that the bank can then debit your account for the amount of an NSF cheque—even if you have not withdrawn the money. That’s true even if your bank is slow and ignores the normal rules about clearing cheques promptly. It’s possible for your bank's delay to cause a cheque not to clear: for example, there was enough money in the account to cover the cheque when it was written but your bank delays in presenting it to the other bank to be cleared. By the time your bank does that, there’s no longer enough money in the account. Rarely, in that case, you may have a claim against your bank, but even this may be limited or denied by your agreement with the bank.


==Read your bank statements carefully==
Banks have their own policies on whether you can re-deposit an NSF cheque (and if so, how many times). 
The first that you may learn of a cheque returned “NSF” may be from your statement. Also, in your agreement with the bank, you promise to be responsible for making sure that the statement is true.
 
==Check your bank statements carefully==
The first that you may learn of a cheque returned NSF may be from your bank statement. Also, in your agreement with the bank, you promise to be responsible for making sure that the statement is true.  


==What if the bank makes a mistake?==
==What if the bank makes a mistake?==
You have a certain period of time to point out that mistake to the bank – normally 30 days from the date the bank mails you your statement. If you don't point out the mistake, you’re considered to have agreed that the balance shown in your statement is correct.
You have a certain time to point out that mistake to the bank—normally 30 days from the date the bank mails you your statement or posts it online. If you don't point out the mistake, you’re considered to have agreed that the balance shown in your statement is correct.


The only usual exceptions are if the bank makes a mistake in your favour by putting too much money into your account, or if the mistake is the result of someone forging a signature on your cheque, in which case you should take immediate steps to make a claim.
The only exceptions are if the bank mistakenly puts money into your account. Then, the 30-day rules does not apply. Another exception is if someone forges your signature on your cheque. The 30-day limit does not apply and you should immediately notify the bank and make a claim for the lost money.  


==If a mistake is made, you have to prove it==
==If a mistake is made, you must prove it==
For this reason, always get a receipt for any deposit that you make, and keep your cancelled cheques and bank statements for a reasonable period of time. If you use a bank machine or ATM, keep the receipts provided by the machine so they can be compared against your account statements. This way, you’ll have a record of all of the transactions in your account. Remember that any deposits and transactions made at a bank machine on a weekend or holiday are processed on the branch’s next banking day.
For this reason, always get a receipt for any deposit that you make, and keep your cancelled cheques and bank statements for a reasonable time. If you use a bank machine or ATM, keep the receipts from the machine to compare them with your account statements. This way, you’ll have a record of all the transactions in your account. Any deposits and transactions made at a bank machine on a weekend or holiday are processed on the branch’s next banking day.  


Note that ATM receipts aren’t considered proof of actual deposits to your account. Only a bank teller receipt or copies of the actual deposited cheques are accepted as evidence of a deposit.
ATM receipts aren’t considered proof of actual deposits to your account. But they are better than nothing Only a bank teller receipt or copies of the actual deposited cheques are accepted as evidence of a deposit.


==What if someone uses your PIN or bank machine card?==
==What if someone uses your PIN or bank machine card?==
When you have a bank machine card and “personal identification number” or PIN, you’re responsible for all amounts withdrawn from your account through the authorized use of your card. So if you lose your card or find out that someone has stolen your card or PIN, phone the bank immediately. Most agreements require you to phone within 24 hours.
When you have a bank machine card and “personal identification number” or PIN, you’re responsible for all amounts withdrawn from your account through the authorized use of your card. So if you lose your card or find out that someone has stolen your card or PIN, phone the bank immediately. Most agreements require you to phone within 24 hours.


You normally won’t be responsible for the unauthorized use of your card and/or PIN after you’ve advised the bank about the loss or theft. But you must not have “knowingly contributed” to the unauthorized use, for example, by lending your card to a friend to withdraw money on a particular occasion. And you must have been careful to keep your PIN separate from your card.
You normally won’t be responsible for the unauthorized use of your card or PIN after you’ve told the bank about the loss or theft. But you must not have “knowingly contributed” to the unauthorized use, for example, by lending your card to a friend to withdraw money. And you must have been careful to keep your PIN separate from your card.  


For more information about bank cards, refer to script [[Buying Goods on Credit, Credit Cards and Credit Bureaus (Script 246)|246]] on “Buying Goods on Credit, Credit Cards and Credit Bureaus”.
For more information about bank cards, check script [[Buying Goods on Credit, Credit Cards and Credit Bureaus (Script 246)|246]] on “Buying Goods on Credit, Credit Cards and Credit Bureaus.


==How does a joint account work?==
==How does a joint account work?==
If you have a joint account with one or more people, depending on how the signature card is signed, you agree that the bank can pay out funds on a cheque or withdrawal signed by any of the account holders. This means that if the account is overdrawn, the bank can demand repayment of the full amount from anyone who has signed the signature card. If you end up paying more than your share of the overdraft, then it’s up to you, not the bank, to get the difference from the other account holders.
If you have a joint account with someone, depending on how the signature card is signed, you agree that the bank can pay out funds on a cheque or withdrawal signed by any of the account holders. This means that if the account is overdrawn, the bank can demand repayment of the full amount from anyone who has signed the signature card. If you end up paying more than your share of the overdraft, then it’s up to you, not the bank, to get the difference from the other account holders.


==What happens if you don’t use your account?==
==What happens if you don’t use your account?==  
The federal ''Bank Act'' says that if you haven’t used your account for ten years or more, any money left in it must be transferred to the Bank of Canada. For more information on this point, call 1.800.303.1282 and ask for "Unclaimed Balances" or email [mailto:ucbalances@bankofcanada.ca ucbalances@bankofcanada.ca].
The federal ''[http://laws-lois.justice.gc.ca/eng/acts/B-1.01/index.html Bank Act]'' says that if you haven’t used your account for 10 years or more, any money left in it must be transferred to the [http://www.bankofcanada.ca/ Bank of Canada]. For more information on this, call 1.800.303.1282 and ask for “unclaimed balances” or click on “[http://www.bankofcanada.ca/unclaimed-balances/ Unclaimed Balances]” or email [mailto:ucbalances@bankofcanada.ca ucbalances@bankofcanada.ca].  


==What should you do if you have a complaint?==
==What if you have a complaint against a bank?==
First, discuss the problem with your bank’s branch manager. If you’re not satisfied with the response, contact the bank’s head office. You can get a contact name and telephone number by calling the Office of the Superintendent of Financial Institutions (OSFI) at 1.800.385.8647. OSFI is the federal government agency that supervises and regulates Canadian banks. Their website is [http://www.osfi-bsif.gc.ca www.osfi-bsif.gc.ca]. If you’re still dissatisfied, you may contact the Ombudsman for Banking Services and Investments at 1.888.451.4519. Their website is [http://www.obsi.ca www.obsi.ca]. Of course, if you have a legal problem, you may need to consult a lawyer.
First, discuss the problem with your bank’s branch manager. If you’re not satisfied with the response, contact the bank’s head office. You can get a contact name and telephone number by calling the [http://www.osfi-bsif.gc.ca/Eng/Pages/default.aspx Office of the Superintendent of Financial Institutions] (OSFI) at 1.800.385.8647. OSFI is the federal government agency that supervises and regulates Canadian banks. If you’re still dissatisfied, you can contact the [https://www.obsi.ca/ Ombudsman for Banking Services and Investments] at 1.888.451.4519. Of course, if you have a legal problem, you may need to see a lawyer.


==Where can you find more information?==
==More information==
*See the manual [http://www.legalaid.bc.ca/publications/pub.php?pub=17 Consumer Law and Credit/Debt Law] published by the Legal Services Society, BC and available for free on their website at [http://www.legalaid.bc.ca www.legalaid.bc.ca]. To find it, click “Our Publications” then under “I want to find a publication by subject,” click “Consumer & debt”. This manual is for paralegals, legal information counsellors, and lawyers with clients who have consumer/debt problems.
* See [http://www.legalaid.bc.ca/publications/pub.php?pub=17 Consumer Law and Credit/Debt] Law published by the [http://www.legalaid.bc.ca/ Legal Services Society] of BC.
*The federal ''Bank Act'' is available online at http://laws-lois.justice.gc.ca/eng.
* Check the federal ''[http://laws-lois.justice.gc.ca/eng/acts/B-1.01/index.html Bank Act]''.




[updated November 2014]
[updated November 2016]


'''The above was last reviewed for accuracy by Bruce Hallsor and Anna Kurt, and edited by John Blois.'''


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Revision as of 23:18, 28 November 2016

This script discusses bank accounts and related service charges, NSF cheques, bank errors, stolen PIN numbers, and joint accounts.

You have a written agreement with your bank

People usually don’t think much about their relationship with the bank. But the important details are always set out in a written agreement. When you open a bank account, you must typically sign some forms. One form is usually a signature card, so that the bank has a record of your true signature. For a chequing account, you must sign a form to obtain personalized cheques. But at least one of the documents you sign has the details (that you agree to) on how the bank will operate your account.

Different banks use different agreements

Most of the agreements have similar terms, but the only way to find out exactly what you’ve agreed to is to get a copy of the document from your bank and read it.

Do you automatically get overdraft privileges?

No. If you have a personal chequing account, you expect your bank to honour your cheques when you write them. But unless you’ve arranged for overdraft privileges (where the bank will honour your cheque even if you don’t have enough money in your account to cover it) your agreement likely says that the bank must honour a cheque only if there’s enough money in your account. And if the bank lets you go into overdraft, they can charge you interest at a rate they set. If you’ve arranged for overdraft privileges, make sure this is recorded in writing. If you pay for goods or services and your bank doesn’t honour your cheque because you don’t have enough funds in your account, it could hurt your credit rating.

Are there rules on service charges?

Service charges vary a lot between banks and accounts. Depending on your account, you may be charged for the cheques you write and for other services that the bank provides. For example, every time you go into overdraft, you may have to pay an overdraft fee, plus interest. Or you may have to pay a service charge every time you use a bank machine or ATM (automated teller machine). Often banks will have package deals with a set monthly charge for a certain number of transactions. They may also waive fees if you keep a minimum balance in your account. While your account agreement likely doesn’t say specifically what cost service charges are, it probably says that you agree to be bound by the bank's general schedule of rates and that the bank may debit your account for any charges that the bank sets from time to time.

When you open an account, banks must tell you what their service charges are. The charges are normally listed on their websites, too. So if you’re looking to open a bank account, shop around to find the account option best for you. Most banks change their charges periodically, and if your agreement permits, this will be done without notice to you. Even if your agreement requires the bank to notify you about changes in your service charges, the bank can generally do this by mailing a notice to your address, and they don’t need your consent to change these charges.

NSF cheques

If someone pays you with a cheque written on another bank account, normally you take that cheque to your own bank to cash or deposit it. Or you deposit it using your phone. Your bank will typically accept cheques from other banks, credit the money to your account, and present the cheque to those other banks for payment—or to be cleared. Unfortunately, sometimes a cheque doesn’t clear because there’s not enough money in the account, and it’s returned to your bank stamped NSF or Not Sufficient Funds.

Your agreement with your bank says that the bank can then debit your account for the amount of an NSF cheque—even if you have not withdrawn the money. That’s true even if your bank is slow and ignores the normal rules about clearing cheques promptly. It’s possible for your bank's delay to cause a cheque not to clear: for example, there was enough money in the account to cover the cheque when it was written but your bank delays in presenting it to the other bank to be cleared. By the time your bank does that, there’s no longer enough money in the account. Rarely, in that case, you may have a claim against your bank, but even this may be limited or denied by your agreement with the bank.

Banks have their own policies on whether you can re-deposit an NSF cheque (and if so, how many times).

Check your bank statements carefully

The first that you may learn of a cheque returned NSF may be from your bank statement. Also, in your agreement with the bank, you promise to be responsible for making sure that the statement is true.

What if the bank makes a mistake?

You have a certain time to point out that mistake to the bank—normally 30 days from the date the bank mails you your statement or posts it online. If you don't point out the mistake, you’re considered to have agreed that the balance shown in your statement is correct.

The only exceptions are if the bank mistakenly puts money into your account. Then, the 30-day rules does not apply. Another exception is if someone forges your signature on your cheque. The 30-day limit does not apply and you should immediately notify the bank and make a claim for the lost money.

If a mistake is made, you must prove it

For this reason, always get a receipt for any deposit that you make, and keep your cancelled cheques and bank statements for a reasonable time. If you use a bank machine or ATM, keep the receipts from the machine to compare them with your account statements. This way, you’ll have a record of all the transactions in your account. Any deposits and transactions made at a bank machine on a weekend or holiday are processed on the branch’s next banking day.

ATM receipts aren’t considered proof of actual deposits to your account. But they are better than nothing Only a bank teller receipt or copies of the actual deposited cheques are accepted as evidence of a deposit.

What if someone uses your PIN or bank machine card?

When you have a bank machine card and “personal identification number” or PIN, you’re responsible for all amounts withdrawn from your account through the authorized use of your card. So if you lose your card or find out that someone has stolen your card or PIN, phone the bank immediately. Most agreements require you to phone within 24 hours.

You normally won’t be responsible for the unauthorized use of your card or PIN after you’ve told the bank about the loss or theft. But you must not have “knowingly contributed” to the unauthorized use, for example, by lending your card to a friend to withdraw money. And you must have been careful to keep your PIN separate from your card.

For more information about bank cards, check script 246 on “Buying Goods on Credit, Credit Cards and Credit Bureaus.”

How does a joint account work?

If you have a joint account with someone, depending on how the signature card is signed, you agree that the bank can pay out funds on a cheque or withdrawal signed by any of the account holders. This means that if the account is overdrawn, the bank can demand repayment of the full amount from anyone who has signed the signature card. If you end up paying more than your share of the overdraft, then it’s up to you, not the bank, to get the difference from the other account holders.

What happens if you don’t use your account?

The federal Bank Act says that if you haven’t used your account for 10 years or more, any money left in it must be transferred to the Bank of Canada. For more information on this, call 1.800.303.1282 and ask for “unclaimed balances” or click on “Unclaimed Balances” or email ucbalances@bankofcanada.ca.

What if you have a complaint against a bank?

First, discuss the problem with your bank’s branch manager. If you’re not satisfied with the response, contact the bank’s head office. You can get a contact name and telephone number by calling the Office of the Superintendent of Financial Institutions (OSFI) at 1.800.385.8647. OSFI is the federal government agency that supervises and regulates Canadian banks. If you’re still dissatisfied, you can contact the Ombudsman for Banking Services and Investments at 1.888.451.4519. Of course, if you have a legal problem, you may need to see a lawyer.

More information


[updated November 2016]

The above was last reviewed for accuracy by Bruce Hallsor and Anna Kurt, and edited by John Blois.




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