RBC customer out of pocket after fraud: what you need to know if you e-transfer money

May 13, 2019 Off By administrator

A system to transfer money online — used over a million times a day in Canada — is not as safe as it advertises, says a Royal Bank customer who had $1,734 stolen during an e-transfer.

The theft occurred after Anne Hoover of Peterborough, Ont., e-transferred money from her RBC account to her friend Fran Fearnley, only to have a fraudster intercept the transaction and divert the money to his own account at another bank.

“I always use e-transfer,” says Hoover. “I thought it was a safe way to send money.”

An RBC manager says an internal investigation indicated that Fearnley’s email account had been hacked, and when Hoover sent the e-transfer, the fraudster figured out the answer for the security question necessary to deposit the money, and then redirected it to a different bank account.

Anne Hoover is angry RBC acknowledged a stranger redirected her e-transfer, but won’t fully compensate her claiming her security question and password were too weak. (John Badcock/CBC)

An expert in online privacy protection and security says financial institutions have opted for convenience over security, which makes strong email passwords and equally strong e-transfer questions and passwords essential.

“How you manage those passwords is very important,” says Claudiu Popa, author of The Canadian Cyberfraud Handbook and a cybersecurity expert who advises government and companies.

“Banks and financial institutions have made it very easy to transfer money via email. Unfortunately, with convenience, comes lack of security.”

How it happened

Hoover and Fearnley had just returned from a trip to Mexico on March 18, when Hoover went online and used her bank’s Interac e-transfer system to reimburse her pal for trip expenses.

It wasn’t the sun on this Mexican holiday that burned Anne Hoover, centre, and Fran Fearnley, right, the women say, after a $1,734 e-transfer between them was intercepted by a fraudster. (Submitted by Anne Hoover)

But when Fearnley opened the email and tried to accept the payment, she got a message saying the e-transfer had already been deposited.

The women called RBC’s fraud department and a bank employee provided the name of the fraudster, his email, and says he’d transferred the money to a TD Bank account.

“This is clearly a complete stranger,” says Fearnley. “How could that possibly have happened?”

The two friends headed to their local RBC branch, where they are both customers — Hoover, for more than 30 years.

The bank blamed the theft on Fearnley’s email security.

Hoover’s security question to her friend was: “Who is my favourite Beatle?”

The fraudster would have had a one in four chance of getting it right — John, Paul, George or Ringo. In a test of RBC’s Interac system, Go Public was given four chances to answer the security question correctly.

Hoover says she is disappointed by her local RBC branch in Peterborough, Ont., where she’d been a customer for 30 years. (John Badcock/CBC)

“The manager continued to insist … that it…

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