Toronto — Canada’s major banks say they can, in fact, sever ties with clients under certain conditions, though they emphasize that such decisions are made with caution and in compliance with legal and regulatory requirements.
The issue has gained fresh attention after an Ontario man recently shared his experience of being “unbanked” by his financial institution after more than 30 years as a customer. The man alleged that the decision came shortly after he lodged a complaint about difficulties accessing in-person banking services.
In response to inquiries, Scotiabank, BMO, and CIBC referred questions to the Canadian Bankers Association (CBA), the industry’s representative body, while RBC and TD have yet to respond.
A CBA spokesperson explained that financial institutions assess each case individually, taking into account relevant laws, regulatory frameworks, and internal risk assessments before making a decision to close an account.
“Any decision to close an account is not taken lightly,” the spokesperson said, noting that banks must work closely with regulators and law enforcement to protect both customers and the integrity of Canada’s banking system.
Accounts may be closed for a variety of reasons, including aggressive or inappropriate behaviour toward bank staff, transactions linked to suspected financial crimes, sanctions evasion, fraud, or other illegal activities.
For Canadians who believe their accounts were closed unfairly, there are avenues to challenge such decisions. The Ombudsman for Banking Services and Investments (OBSI) offers a dispute resolution process for complaints that cannot be settled directly with the bank or investment firm. Customers must first attempt to resolve the matter internally before escalating it to OBSI.
The episode has sparked debate over the balance between customer rights and banks’ regulatory responsibilities, particularly as financial institutions tighten compliance measures amid growing concerns over fraud and money laundering.