A Matter of Trust - Banking

President's Choice Financial (PCF) advertises "no-fee banking", savings account interest comparable to Canada Savings Bonds, and bank machines in every Loblaws store. They also offer "PC Points" on Loblaws purchases, but these are only worth 0.1% of purchase - not much. And, with a $1000 minimum balance in my CIBC bank account, I hadn't been charged any fees by my bank for years. However, the PCF savings rate sounded good compared to the accounts I had at the time, so I decided to try them out. Here's what happened.

You can't open a PCF account at any Loblaws, or by mail. You have to visit a PCF service kiosk in person. There seem to be only three in Ottawa (820,000 people). So, I drove over to the nearest one to open a savings account. Each kiosk employs only one person, with a schedule complex enough that you could benefit from a computer to keep track of it. The second visit, I found an officer on duty.

It turns out that PCF savings accounts are not quite what they sound. They are "other" accounts, and a chequing account is required in order to transfer money to and from them. Anyway, after what seemed an age of filling out forms and providing personal information, I deposited a cheque, made out to myself on my current bank account as instructed, to my new chequing account in the presence of the kiosk officer, then transferred some of it to the "savings" account.

A week later, at my regular Loblaws, I checked my chequing balance on their ATM, and discovered that it was negative! I drove over to the kiosk and was told that the computer said that my cheque was "not eligible to clear". The kiosk officer suggested that I wait 24 hours, when more details should be available. They weren't - I was told by PCF Customer Service the next day that "not eligible to clear" was still the sole information available, the offending cheque would be returned to my current bank, the transfer to the savings account would be reversed, and I was given the appropriate reference number for these actions.

The next day, I tried to check my balance to ensure that things had been straightened out. The PCF machine stated that my card was now invalid. Got on the phone to PCF - my card was supposed to be valid even though it obviously wasn't. But, I also found from them that the transfer reversal that had supposed to be done the day before had not been done. At that point, I'd had it with PCF. Banking is based on trust, and if a bank doesn't take actions that it says it will, I go elsewhere. I instructed them to close my accounts. At that point, I found that you can't withdraw money from a PCF account - you have to wait "ten business days" for them to mail you a money order for the amount you wish. Add Canada Post delays to that of course.

I didn't receive a thing from PCF until a full month later, when I received a regular statement for the chequing account. The transfer reversal had not been done at all! Not only that, no transfer of funds had been done to close the account. There was an interest credit of a few dollars, and an interest charge of ten times that amount. You see, they "pay" interest on a deposit as soon as it is made, but if there is any problem with it, they treat it as a loan at credit card rates for the same period.

Well to make a long story short, after several more long trips to the kiosk, I finally got my money out of PCF. Skip ten days, it was two months later. I also got a letter from PCF Customer Service protesting that everything had been done according to the PCF customer agreement, and refusing to admit that neither of two separate actions properly requested from Customer Service and accepted by them complete with reference number had in fact been done.

What about the supposedly bad cheque? Well, my bank branch says they never received it, at any time. All I know is that PCF still has it! The kiosk officer managed to get agreement that it would be returned to me. Well, it wasn't - only a photocopy of the front of the cheque was. It appeared to be in perfect order. No, I had not written the date incorrectly, nor any of the amounts; it was on a proper cheque form supplied by my bank, all information on it was current, and there had indeed been funds in my account to cover it. And, there was no stamp from my bank on it, just a generic stamp that it was no longer valid unless certified.

I submitted a log of these transactions, with full details, to the head office of PCF, together with the obvious suggestion that if they wished to keep customers, they should correct the problems I'd encountered. I have received no answer, not even an acknowledgement.

I'd skip dealing with President's Choice Financial, if I were you. I'm now with Tangerine. They seem to do everything right. As far as my experience goes anyway.

So, now that I've moved and Scotiabank is a lot closer than CIBC, are they any better than PCF?

Well, no. Scotiabank has a MoneyMaster savings account that used to have interest comparable to ING and PCF. But, if there is any transaction on that account other than a bank machine transfer between that account and a Scotiabank chequing account, they charge $5 for each transaction. And, there are no statements whatsoever with this account - a customer has to visit a Scotiabank machine, ask for balance, then figure out what happened themselves.

Unfortunately, tellers, at the Scotiabank at Hunt Club Plaza Ottawa at least, tell customers they can withdraw money from the MM for free as long as they do it at the bank machine. And, when a customer finally figures it out and complains about the unexpected $5 charges, they are told it's their fault. In effect, they are told not to trust a word a Scotiabank teller tells them!

To add insult to injury, Scotiabank reconfigured their accounts late 2008, dropping the interest rate drastically on the MM account and creating a new Power Savings account to replace it. They did not inform their existing MM customers - no statements, you see.

To top it off, the new account can't be created at your Scotiabank branch - it can only be created by telephone, which requires negotiating a confusing computer menu, then waiting up to half an hour to talk to a person. As if that isn't enough, their telephone banking keeps inviting you to select a call-back option - when you do, in early January 2009 at least, the computer says, "Goodbye", then hangs up so you have to start all over again...

Tangerine still wins, by a mile.

John Sankey