TD Bank customer frustrated with fraud investigation leaving him owing thousands

Three TD Canada Trust bank customers who claim they were the victims of fraudulent credit card and debit card transactions are accusing the bank of denying their claims without a thorough investigation.

"They try to make me feel like I'm the criminal here," said lifelong TD Canada Trust customer Scott McFarlane, who has been dealing with the bank's fraud department and ombudsman for more than a year.

Last June, McFarlane reported his wallet stolen while out at a concert with friends in Vancouver.

He said he called the bank right away when he noticed it was missing.

"As I'm on the phone with them, [the bank's service agent] said, 'They're taking your money out right now,' so I said put a stop to that, and so they shut down my account."

McFarlane said he then reported the incident to Vancouver police and filed a fraud claim with the bank.

In a police report obtained by CBC News, investigators say they believe a woman captured on surveillance cameras at the time of the disputed transactions is a suspect in the case.

Before the account was frozen, the alleged fraudster was able to access approximately $5,500 from McFarlane's account.

TD Canada Trust, and subsequently the bank's ombudsman, denied McFarlane's fraud claim. They said there was no PIN mismatch at the ATM, therefore leaving the customer responsible for the transactions.

"They say there was no way the pin was mismatched, but then when I was on the phone with the woman she said there's been eight other mismatches on the pin," said McFarlane.

"So in their own letter they say that didn't happen, but in their own transcript of the conversation, that doesn't jive. It's a direct contradiction."

PIN technology has been criticized in the past as no longer being secure enough.

Steven Murdoch, a researcher with the computer laboratory at Britain's Cambridge University, has said that "chip and PIN" security isn't impenetrable. "It's actually quite an old technology — between 15 and 20 years old," he told CBC in a previous case involving CIBC in 2014.

One technology allows criminals to use a bit of hardware to fool a card into accepting any random PIN entered on a merchant's card terminal, Murdoch said.

McFarlane tried over the next several months to get more information about his claim denial through TD Canada Trust's fraud department and its ombudsman.

Through the Office of Information and Privacy Commissioner for B.C., McFarlane requested transcripts of his phone calls with the bank.

Customers responsible for card: bank

The bank refused an interview with CBC News, but in a statement said "TD's fraud investigations team thoroughly reviews all reported customer fraud claims in a fair, equitable and transparent manner."

The bank said customers are responsible for their access codes and PIN and must take "every reasonable precaution to maintain them safely."

TD Canada Trust offered McFarlane a "one-time goodwill" gesture in the amount of $2,569.68, but he declined. 

"They did the minimum criteria that they had to prove to not pay me the claim and then just walked away," McFarlane said.

"I think it's a little insulting to get that offer, to be honest."

Other claims reversed after CBC inquiry

Since last October, two other TD Canada Trust bank customers have come forward to CBC News with similar allegations. 

One customer was told she was responsible for nearly $5,000 worth of fraudulent transactions on her TD Visa card.

When CBC News inquired directly about her situation, the bank said the case was still open. Within a few days, the bank said it "fully reimbursed the customer and issued a new credit card."

Another customer who contacted CBC News had a limit of $500 on her TD Visa, but a fraudster was somehow able to rack up charges adding to $138,922 in the summer of 2016.

When CBC News inquired about this case, the customer was contacted by the bank within days and was told she would not be responsible for the charges if she agreed to a settlement which included not discussing her case publicly. 

'I wouldn't wait for the banks'

McFarlane's story is similar to others reported by CBC in the past. a legal expert who specializes in contract law says the cardholder agreement heavily favours banks in cases of fraud.

"The justification that banks have used is that PIN technology is very secure, so to the extent that your PIN has been compromised, you need a very good reason why we should reimburse you," said lawyer and University of Ottawa law professor Anthony Daimsis.

"But I think that kind of thinking is 10 or 15 years old. We're seeing more and more that PIN technology is not as secure as we'd hoped."

Daimsis says banks have a lot of power to decide whether or not to support their customers.

He believes consumer protection laws need to be changed to give cardholders more recourse if they feel their claim is unfairly handled.

"I wouldn't wait for the banks to change anything because they have no incentive to change it. There's no competition for them," he said. 

"So this for me is really for the provinces to fix their laws to better protect their consumers."

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