Low Dollar and High Finance

22 01 2015

Just when you thought the Canadian dollar couldn’t drop any lower, the central bank dropped interest rates another 0.25% the other day to 0.75%. I thought that was low until I checked and found Switzerland’s is currently -0.75%! (Does that mean they pay your mortgage for you?!)

Anyway, the drop in interest rates obviously meant that Canadian dollars became temporarily less attractive and so the exchange rate with the UK’s pound tipped a little more in the UK’s favour. Despite living in Canada for many years now, this wasn’t actually such a bad thing in my particular case…

Before Christmas I decided I’d move a little of my “idle” UK money into Canada in preparation of the expected credit card bills post-turkey. Being an uncomplicated man, I simply wrote a cheque against my UK bank and presented it to my Canadian bank. Thank-you very much and a signature or two later, $1770.60 was sitting all warm and fuzzily in my Canadian account.

HSBC: The world’s local bank (as long as you live near the bank)


And Christmas came. And along with my two beautiful daughters visiting from college, it left again.

And then I got a statement. A totally random debit was made from the account for $1876.78 in early January. It was made on a day when neither myself nor my wife had visited the bank, yet a call to the bank could only tell us a “sundry” transaction had been made. Apparently in person, but there were no other details. It matched no bill or any other legitimate debit I could imagine. They checked that neither of us had presented the necessary plastic card on the day, that neither of us had lost our cards, and sundry other basic checks. Satisfied, they promised to check video camera feeds and get back to us after the fraud investigation.

And then I got a letter (posted a couple of days earlier and from the same bank branch that had just claimed to have no idea about what the heck had happened.) It turned out that when the UK cheque had been presented to my UK bank, they’d refused payment. This, along with a drop in exchange rates and some not inconsiderable fees for doing who knows what (apart from repatriating the original cheque to me) had resulted in me being charged $106.18 more than I’d been awarded in the original transaction. And a Merry Christmas to you too!

ScotiaBank: my actual local bank

Many phone calls later, I learnt that my UK bank had unilaterally decided that since I didn’t use my account very often they’d freeze it. Now to be fair, they’d sent me a letter to this effect last July. It had arrived two days after their “if we don’t hear from you by…” deadline, so I was none too pleased at the time. I had to pay for many long distance, international minutes on the phone since despite being “the world’s local bank” they do not have any freephone numbers outside the UK. It all got sorted out, and mid July, my account was unfrozen. No mention was made of the fact that they’d freeze it again 60 days later if I continued to not use it. So, roll on Christmas (well after the 60 days) and my cheque suddenly became invalid. No mention or warning that this might happen. They even continue to send me paper statements (how quaint – do banks in Europe still do that?! More on this later) illustrating that I have plenty of money in the account… if only I could get to it.

So anyway, after Christmas I learn that indeed the account will continue to be frozen unless I make transactions on it every few days. Plainly I’m not the only person impacted by this policy. It’s intended by the way to avoid “dead” accounts when the owner is, well, dead. By freezing them, the bank supposedly saves money administering the dormant accounts. The irony of the fact they were sending a single sheet of paper with the same numbers on it every single month at great expense to Canada seemed to be lost on them. So to allow people such as myself a little freedom they’ve created a new type of account that you can only create and use online (which helps if you are abroad!). As suggested by the nice man on the phone, I set up a monthly standing order whereby a single pound is transferred every month from my main account into this online account and therefore keeps the main account active. Talk about creating a complex solution to a self-caused problem! So now, if I really DO die, the automated payments will continue… at least until the main account finally gives out in 450 years or so. They’ll keep sending paper statements at vast expense to an address that likely will be underwater, and all just to justify stealing $106 from me!

So anyway… back to interest rates. The Canadian dollar is now slightly less attractive in the world markets and so each of those UK pounds will buy slightly more Canadian dollars. I tried to open an account with Canadian ForEx, which confusingly is actually Australian. For a flat rate of £7 I can transfer money willy nilly to Canada. If I were flush enough to transfer £3,000 or more, it’d actually be free, but let’s not get carried away! The trouble is though… there are anti-fraud laws that require them to prove I really am me. They attempt to do this by asking me to scan a bank statement with my name, account details and a recent date. Trouble being… my bank only gives electronic statements, and since I have to log in to get the statement, they decided there was no point putting my name on it. Furthermore, since I know my account numbers, there’s no point taking the risk of putting the whole number in the statement, so they use a mixture of asterisks and a small selection of the numbers. All this to say… I could not fulfil the anti-fraud requirements as stated. It took a whole week of to-ing and fro-ing, creating PDFs and scanning other statements relating to lines of credit and inside leg measurements, but finally I got it sorted.

Ex-pats wouldn’t give a Canadian ForEx for anything else

So, all’s well that ends well. The exchange rate offered means that I’ve recovered all but a few cents of the $106 I was ripped off by HSBC’s stupidity (and I will still try and recover that anyway via the UK’s ombudsman). And to-boot, I’ve just had a very nice conversation with an Australian guy confirming my transaction, and checking I was happy with the experience.

I’m still angry though that a bank in which you have an account in good standing for THIRTY YEARS could re-freeze an account without warning – verbal or written, and think it perfectly reasonable to refuse to honour a signed and legal cheque. Not to mention having an international marketing campaign about being “the world’s local bank” and then forcing foreign customers to pay long distance charges. They only handle the interaction via phone. No email or online chat options. UK office hours only. Remind me… which century is this again?!