Canada
The CIBC $700 GIC scam
By Damon Ochei
The Canadian Imperial Bank of Commerce (CIBC) is one of the leading banks in Canada and it offers a variety of products to its customers one such is the Guaranteed Investment Certificates (GICs) for international students.
The CIBC offers a competitive GIC rate and they are prompt with responses to international students. The bank provides bank instructions for payment into the GIC account and also ensures that prospective students are booked for an interview two weeks after arriving in Canada.
The staggered payments by CIBC are explained to customers and a timetable of payments will be handed to customers so that they will when the payment starts and ends but there is a catch.
The bank withholds the final payment of $700 and this is not only for students who successfully got a visa and are studying in Canada but also for students who have been rejected a visa.
For students who are in Canada, the bank repeatedly claims that it has made all payments according to schedule but this is not true. It is a covert scam by the bank that has lingered for a little too long and it is time that the Office of the Superintendent of Financial Institutions (OSFI) needs to investigate.
OSFI needs to ask all GIC customers with CIBC if they were denied their hard-earned $700 by CIBC and the bank should be ordered to make these payments.
I know at least two students, two currently in Canada and one whose visa application was rejected that were scammed by CIBC. All three of them said they tried repeatedly to get the bank to honour its terms and agreement but to no avail.
One student said the bank claimed that it had paid the money as agreed but the student kept on asking the bank to show where and when it was paid but the bank has failed to do that. Even worse, is that many CIBC branches claim they have no knowledge of GIC transactions and do not even attempt to contact their regional or head offices for help.
Another student who was denied a visa said the financial institution claimed that it withheld the $700 because of the exchange rate after it had initially denied that the money was withheld.
Here’s what CIBC ISBO claimed “We would like to inform you that we have refunded your full amount to your source account, while returning the funds the amount is sent back as per buy back rate also check with your local bank if there were any charges applied from their end. Please note there is a $20 CAD refund fee applicable.”
After the student persisted, a certain Darpan Kaur replied, “We wish to inform you that there are $20 CAD refund fees applicable and the Foreign Exchange rate which was promised. Upon receiving the refund request the funds were converted back to USD at the current Foreign Exchange rate at the time of the refund, that is why the refund which you have received is less than the actual amount you have paid which you might have already received the clarification for the deduction.”
Interestingly, the money withheld by CIBC comes to exactly $700. What a coincidence or what a scam! CIBC needs to refund all its customers that it has scammed and to prospective international students, you might want to inquire if you will get all your monies. I am not holding briefs for other banks as I am yet to receive complaints about them.
Damon Ochei is an economist and public affairs commentator
