An Ontario man who has been a client of RBC for 30 years says he was told to take his business elsewhere, which brought to light a rare but important practice.
Thomas Nassab from Alliston said on a broadcast that he got a letter from the bank saying it could “no longer continue [its] banking relationship” with him and that he had 30 days to move his money.
He said the notice came days after he complained more about the poor service he was getting in person and how hard it was to move money around in his investment accounts.
Nassab said he wasn’t given a clear reason for the decision and asked RBC to change it.
He told CTV, “It’s very disappointing to be taken away completely with no explanation.” The Royal Bank of Canada wouldn’t talk about the specific case because of privacy.
A spokesperson told the broadcaster that either a client or the bank can end a relationship, and that these choices are always made after a thorough review and “are never made lightly.”
Banks in Canada can end relationships for a number of reasons, such as suspected fraud or money laundering, breaking the rules, or being abusive to staff.
The federal government says that banks and other reporting entities must use a risk-based approach to keep an eye on their clients and take action when the risk is too high, which can mean closing accounts in some cases.
Canada’s anti-money-laundering regulator has rules that tell businesses how to look at and deal with risk across customers, products, and locations. This is part of a larger system that has become stricter in recent years.
Nassab’s experience is rare, but it shows how unbalanced the power is when a bank says no.
If you lose your main bank account, it can make it hard to pay bills, get credit, and access both registered and unregistered investments.
If other institutions are slow to take on a client who has just left another one, the fallout can last.
When a bank ends a relationship, they usually send a letter to the customer so they have time to move their accounts.
The Banking Services and Investments Ombudsman says that banks usually give people about 30 days to make the switch.
Clients might have to open a new account at a different bank, change the way they get direct deposits and preauthorized payments, and move their investments.
People who think they were treated unfairly can file a formal complaint.
The Financial Consumer Agency of Canada explains a process that starts with a complaint to the company and then moves up to its internal complaints office.
Consumers can take their case to OBSI if a bank gives them a final answer or if 56 days go by without a resolution. OBSI offers free, independent dispute resolution for most banking and investment complaints.
When OBSI finds that a bank acted wrongly, it can suggest compensation. However, it does not tell companies to keep working together when there are real concerns about risk.
Moving registered accounts can cause fees or delays. Clients should ask for a written list of all the products, transactions that are still open, and deadlines.
RBC didn’t say why it made the decision in Nassab’s case. The bank’s answer to the broadcaster made it sound like relationship exits were the result of internal reviews.
The segment said that banks also use policy violations or abusive behavior as reasons to end relationships.
No matter what the reason, this event serves as a reminder that customers can change banks at any time, but banks can also decide when a relationship is no longer worth the risk.
