Wire transfer instructions are precisely followed

Mr. E held both Canadian and American-dollar denominated accounts at his bank. In March 2, he received a $26,000 USD wire transfer from a relative living abroad, made through Mr. E's bank's foreign subsidiary.

When Mr. E checked his account balances online, he saw that the bank placed the transferred funds in his Canadian-dollar denominated account instead of his American-dollar denominated account. He calculated the loss on the currency exchange to be $700 and complained to his bank. Mr. E felt that the bank should have been more proactive and recognized that he held two accounts in two different currencies. It would have made financial sense for the funds to be deposited into the account of the same currency, and if the bank had phoned him to confirm the transfer, Mr. E would have instructed that the funds be placed in his American-dollar denominated account.

The bank declined compensation. As a member of the Society for Worldwide Interbank Financial Telecommunications (“SWIFT"), the bank told Mr. E that it followed SWIFT procedures for processing wire transfers from foreign financial entities. It explained its obligation to follow the instructions as provided by the ordering customer, Mr. E's relative. She had provided the bank his Canadian-dollar denominated account, not his American-dollar denominated account.

Mr. E insisted the wire transfer was mishandled and came to OBSI.

Complaint not upheld

We investigated the matter and agreed with the bank's position. In reviewing SWIFT protocols, we confirmed that it had properly carried out the wire transfer. It is common for Canadian banks to receive wire transfers in foreign currencies and we did not feel it would be reasonable to expect banks to call customers for confirmation every time a wire transfer is received. We also confirmed that Mr. E's relative provided instructions to transfer the money to the Canadian-dollar dominated account. OBSI did not recommend that Mr. E be compensated.

(2013)