Home  Starting Out in Canada Bank won't open an account? Fight it
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Bank won't open an account? Fight it |
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By Archie D'Cruz » Among the many major hurdles many new immigrants
to Canada face when they first land is that banks very often will
refuse to let them set up an account.
It is hugely frustrating, because having a personal savings account is
essential for a couple of reasons that may not be immediately obvious.
For one, the minimum funds you must show as having been brought into
Canada have to be placed in your name in a financial institution within
a month of your arrival. (Yes, your funds are tracked).
Secondly, you cannot apply for a credit card if you don't have a bank account; and as explored in another article, owning a credit card is essential for all its own reasons.
Why do banks make such a fuss about opening accounts for new immigrants? The reasons provided range from lack of Canadian banking history to a non-permanent address being provided.
Privately, some bank officials admit, it also has to do with uncertainty over immigrants finding jobs and their traditionally maintaining low funds in their accounts, which makes them a none-too-attractive segment when it comes to overall profitability.
What are the rules on opening a bank account? The fact of the matter is that banks cannot legally refuse to open an account, except in a very small number of cases that we will come to shortly.
The rules state that a bank must open a personal account for you if:
- it's a personal account that you request in person at a bank branch or point of service at which personal bank accounts can be opened. For example, if you go to a bank branch that only offers business accounts, you may not be able to open a personal bank account;
- you provide the bank with the following information:
- your name;
- your date of birth;
- your address, if any; and
- your occupation, if any; - you can show two pieces of acceptable identification (these include your landing papers, a Social Insurance Number (SIN) card or a provincial health insurance card. Your second piece of ID can also include your foreign passport);
- you agree to let the bank verify your identification, if the bank requests it;
- you agree to let the bank contact a credit reporting agency for a background check.
Which brings us to the two points banks often cite for turning down a savings account application:
Lack of credit history - If you've never previously lived in North America, you won't have a credit history, but that is not grounds for the bank to reject your application.
Lack of a permanent address - Again, this is not a legal requirement. However, the bank can and will ask you to provide proof that you live where you say you do. An example of such proof would be a recent utility bill that includes both your name and address or an apartment rental contract.
When can the bank refuse to open an account? There are only a few reasons that banks can legitimately refuse to open an account for you.
These are
- the bank has reasonable grounds to believe that you'll use the account to break the law or commit fraud;
- you've committed a crime or fraud against a financial institution during the past seven years;
- it has reasonable grounds to believe that you intentionally provided false information when you opened the account;
- it has reasonable grounds to believe that opening the account would expose its employees or customers to physical harm, harassment or abuse;
- you do not agree to let the bank verify if the four circumstances mentioned above can apply to you and to verify the pieces of identification that you present to the bank; or
- you can't provide acceptable identification.
What to do if the bank turns you down. If the bank refuses to open an account, it must provide the reasons to you, in writing. Most banks won't do this unless asked, so go ahead and demand it!
If you believe the reasons provided by the bank aren't valid, ask the bank for its complaint handling process. Then follow the steps in this process to have the bank's decision reviewed.
If this still does not resolve the issue, you can contact the Financial Consumer Agency of Canada (FCAC) to investigate your complaint.
The numbers to call are 1-866-461-3222 (English) or 1-866-461-2232 (French). Calls can be made any time from Monday to Friday, between 8:30 a.m. and 6:00 p.m., Eastern Time. The calls are toll-free.
Alternately, you can write to the FCAC at this address: 427 Laurier Avenue West, 6th floor, Ottawa, Ontario K1R 1B9.
The FCAC supervises banks to ensure they comply with federal consumer protection measures. If it determines your application was wrongly turned down, it will take action to ensure the bank complies with the law.
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