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CIBC fails to properly address unauthorized withdrawals, says Chawathil First Nation

CFN disappointed with CIBC’s mishandling of fraudulent incidents
The CIBC branch in Hope. CFN said that their recent interactions with CIBC highlights “significant issues in the bank’s ability to serve First Nation communities and vulnerable populations effectively and respectfully.” (Kemone Moodley/Hope Standard)

Chawathil First Nation (CFN) says they are disappointed with the Canadian Imperial Bank of Commerce (CIBC) after the bank allegedly mishandled investigating fraudulent withdrawals from CFN’s social assistance account.

Specifically, CFN said their recent interactions with CIBC highlight “significant issues in the bank’s ability to serve First Nation communities and vulnerable populations effectively and respectfully.”

“First Nation communities have a wide range of responsibilities to their members and need reliable partners to assist in this important work,” said CFN Coun. Aaron Pete. “Unfortunately, CIBC has been incredibly difficult to work with and has repeatedly failed our members, especially our most vulnerable”

CFN said in a press release issued Monday morning (May 20) that Chawathil has been dealing with ongoing issues regarding unauthorized withdrawals from their account since May 3, 2023. They have also been having issues with trying to open a new account with CIBC (in an attempt to try to solve the fraudulent transfers).

CFN was first notified last year by CIBC of an issue with their account when a transfer of $80,000 was halted due to insufficient funds.

Despite this unsuccessful transfer, CFN said that later “subsequent smaller withdrawals between $800 and $1200 went unnoticed by CIBC.” While these were social development withdrawals, because of the previous attempted unauthorized transaction, CFN said they were concerned that “these withdrawals were not flagged for potential fraud, raising serious concerns about CIBC’s fraud detection processes.”

Chawathil said they only became aware of further fraudulent activities in January of this year when their social development manager discovered them. They said that after CFN chief and council were notified of the issue, Chawathil immediately informed CIBC and requested a new account and stop-payment order.

CFN said the bank did not start a fraud investigation until representatives from Chawathil made “repeated requests” for one.

During this time, Chawathil said their chief administrative officer Heather Fader faced difficulties trying to coordinate speaking with CIBC’s head office in Toronto, Ont.

According to CFN, this was due to the different time zones and CIBC staff allegedly being inflexible about scheduling. CIBC’s bank policies also required all account signers to be physically present. CFN said this “hindered (their) efforts to manage accounts efficiently.”

“In February 2024, (we) acknowledged internal process errors and implemented measures to safeguard accounts, including hiring a new controller,” CFN said in their press release. “However, CIBC’s response to subsequent fraudulent activity remained inadequate.

“On March 6, 2024, another fraudulent transaction attempt was thwarted due to a stop-payment order. Despite this, CIBC failed to initiate a fraud investigation.”

CFN said one of their councillors followed up on the transaction and was informed by the bank manager that no investigation had begun. They were also told to contact the fraud line directly. It was only “after persistent efforts did CIBC initiate the investigation, admitting their lack of experience in such matters.”

CFN said the problems with CIBC persisted when their social assistance account was frozen without any true communication or form of explanation. This lack of “empathy exacerbated the situation, forcing members to wait for essential funds.”

CFN said, in an attempt to try to resolve the issue, they tried to open a new account with CIBC. However, last Tuesday (May 14), the band was informed by CIBC that their new account couldn’t be used due to an error on CIBC’s part. They were then asked to use the “compromised account” until the issue could be resolved.

The band has since spoken with other financial institutions and professionals who, according to CFN, have “expressed shock at CIBC’s treatment” towards the band.

“Chawathil First Nation is committed to the well-being of its members and expects to collaborate with organizations that share these values,” CFN said in their press release. “Unfortunately, CIBC has not demonstrated the necessary care or concern throughout this process.

“CIBC has not acknowledged the vulnerability of CFN’s clients, nor the impact of their service failures on individuals living in poverty, especially during a cost-of-living crisis.”

The Hope Standard reached out to CIBC, which said it is still reviewing and investigating the matter.

“We are reviewing this matter for our client,” said a CIBC representative. “Whenever a concern is raised we take the matter seriously and investigate, as we are doing in this case.”

CFN said they are now publicly sharing their experience to ensure this doesn’t happen to other organizations – especially First Nation communities – when interacting with CIBC.

They said they hope, in doing so, that it will draw attention towards services provided by financial institutions, and that scrutiny will be given to ensure that these services are fair, transparent and ethical.

READ MORE: District of Hope and Chawathil First Nation make history with MOU signing

Kemone Moodley

About the Author: Kemone Moodley

I began working with the Hope Standard on August 2022.
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