A Surrey woman was shocked to learn Scotiabank had recycled the number of an account she and her husband closed five years ago and reassigned it to a new customer. Terrie Judson says a $1,500 investment account in her husband’s name was sold and Investors Group transfered the money to the closed Scotiabank account in error. She told CTV the transfer to the old account number went through, even though the names on the transfer and the bank account didn’t match. When Judson noticed the mistake and asked why the money wasn’t sent back to Investors Group, she says she was shocked to learn it had already been accepted by someone else. “I’m like, but it’s not their money. It’s my money. It’s got my husband’s name on the transfer and everything,” she said. Payments Canada is the clearing house of electronic transfers, and in a statement to CTV News spokesperson Tricia Weagant wrote: “The LVTS - our “wire” - transfers funds between banks, who use the account numbers to debit and credit funds to accounts. Banks are only required to use an account number for these transactions. That helps deliver smooth, fast and efficient payments. Using just the account number allows for straight-through processing (i.e. automation of the payment). Banks do have the option to manually intervene and confirm payment details and some banks may do just that but it could slow the process down for their customers." When Judson contacted Scotiabank about the error, they wouldn’t tell her who had accepted the money and who had been assigned the account number, but she says she was led to believe the account was closed and the money was gone. It is not uncommon for banks to recycle account numbers. According to the Canadian Bankers’ Association (C.B.A.), some banks recycle account numbers and some do not. The C.B.A. says banks have a finite series of account numbers they can use and may need to reuse numbers on accounts that have been closed. Scotiabank says they have a finite number of account numbers and that each branch has 181,000 unique numbers at its disposal. The bank says a number of different factors contribute to the construction of an account number, like the transit number of a customer’s branch. It also says the bank retains information of closed accounts for seven years as mandated by the federal government and that numbers for accounts that have been closed for five years can be used again. Scotiabank pointed to Investors Group for sending the transfer to the closed account. In a statement to CTV News, Scotiabank said “it is the sending institution’s responsibility for verifying the account number with the sending customer to ensure information is up-to-date.” Judson appealed to Scotiabank’s ombudsman and contacted the president of the bank. More than a month and a half later the bank returned the money, but Judson says the return was contingent upon her signing a non-disclosure agreement, which she initially refused to do. She ended up signing the agreement but decided to speak out about what happened anyway. TD says it recycles numbers on closed accounts, and HSBC says it recycles closed account numbers but only after all accounts from a specific customer have been closed for a minimum of seven years. Bank of Montreal, Royal Bank of Canada and CIBC have not responded to requests for comment yet.
