Consumer surprised when bank gives him 30 days to close his account

Mr. K arranged a meeting at a Canadian branch of ABC Bank, so he could open a personal chequing account. At the meeting, he provided the proper documentation and told the bank he would be traveling abroad. He also mentioned that a branch of ABC Bank was located where he was going, and he was relying on his new ABC bank account to transfer money back to Canada.

A month later, Mr. K received a 30-day notice for the closure of his bank account with ABC Bank. In the e-mail message, the bank stated that it conducted periodic reviews of its accounts and would no longer provide Mr. K with banking services. Mr. K had 30 days to remove his funds or transfer them to another bank.   

Mr. K was out of the country when he received the notice. The account closure took him by surprise, especially after meeting the bank’s eligibility requirements. Mr. K was also upset because the bank’s decision to close his account caused him significant inconvenience. Mr. K requested the reason why ABC Bank had ended its relationship with him. The bank did not provide a reason and said its decision was final.

Unsatisfied with the outcome, Mr. K appealed to OBSI and asked for 60 days to close his account.

Complaint not upheld

Canadian law and banking regulations allow banks to end their business relationships with their consumers and do not require banks to provide a reason or notice when doing so. As such, the focus of our investigation was on whether ABC Bank had complied with the terms outlined in its account agreement with Mr. K, and whether it had exercised its rights reasonably.

During our investigation, we spoke to Mr. K and reviewed his account agreement with ABC Bank. The agreement stated that the bank had a right to close any of its clients’ accounts at any time for any reason, without notice. After completing our investigation, we concluded that the bank had acted within the terms of the agreement and had exercised its rights reasonably when it gave Mr. K 30 days written notice. The bank was also under no obligation to provide Mr. K with a reason for ending its relationship with him. As a result, we had no basis to recommend compensation for Mr. K’s inconvenience or an extension of the notice period.

For more information about how we approach relationship-ended cases, please click here.