Latest news with #GoPublic
Yahoo
3 days ago
- Business
- Yahoo
Scotiabank holds customer responsible for almost $20K in credit card fraud
Jordon Judge's cellphone rang as he sat in his local Vancouver coffee shop last October — caller ID said the person was from Scotiabank. He had no idea it was actually a fraudster who had manipulated the call display, a practice known as phone call "spoofing." The fraudster said he was calling to flag two suspicious charges that were coming through on Judge's Scotiabank Visa card. Judge said he hadn't approved those charges and the caller said they would be blocked. But two days later, Judge spotted two large charges on his credit card statement, totalling almost $20,000. "Those were not my charges," he told Go Public. "So it was definitely astonishment." It was the beginning of a long and frustrating process, during which Scotiabank continued to insist he was liable for the fraudulent charges. Credit card fraud is a growing problem. The Canadian Anti-Fraud Centre doesn't track how much money people lose to it, but says that over the past three years, an increasing portion of identity fraud cases have involved compromised credit cards. WATCH | On the hook for $20K: The Ombudsman for Banking Services and Investments says complaints related to fraud are the number one issue it deals with, and only e-transfers have more fraud complaints than credit cards. Under federal law, a person's maximum liability for unauthorized credit card transactions is generally capped at $50 unless the bank can prove the customer was grossly negligent in protecting their card. A cybersecurity expert says increasing fraud and the rise in complex technology means financial institutions should be conducting thorough investigations and providing clear evidence when holding customers liable. "All that the bank has done is accuse [Judge] of either negligence or malice," said Claudiu Popa, who has 35 years' experience in cybersecurity and wrote The Canadian Cyberfraud Handbook. "The bank has to prove that the customer is the one who perpetrated this quite significant and sophisticated fraud." Scotiabank declined an interview request, did not answer any written questions and instead sent a brief statement, reminding customers to safeguard their personal information. The fraudster who called Judge asked for his birth date and mother's maiden name, which Judge shared. But then the fraudster asked him to share a "one-time passcode" — a type of two-step verification — that was texted to his phone. Judge says he refused to do that, because the message also told him not to share the code with anyone, and said that no one from Scotiabank would ever ask for it. The fraudster claimed that he stopped the charges from going through and hung up. But two days later, Judge discovered a charge for $17,900 to Anglia Ruskin University in the U.K. on his statement, and a second for $1,800, supposedly paid to someone by the name of Paula S. Taylor. "I wasn't worried at the time because I knew those weren't my charges," said Judge. "I thought I couldn't be held accountable for it." Judge filed a request for compensation with Scotiabank, which sent him a letter a few weeks later, saying the bank had "examined all relevant documentation" and concluded that he was responsible for the charges. The letter did not outline what evidence had been reviewed and did not explain why the bank concluded he should be on the hook for almost $20,000 — plus the growing interest. "When people sign up for credit cards, they're under the assumption that if they get scammed, they're not liable for the purchases made on their credit card," said Judge. "Apparently that's not the case." He appealed, and a second letter — from Scotiabank's Escalated Customer Concerns Office (ECCO) — also found Judge responsible, stating that a one-time passcode was used for the university charge, calling it "a feature that has a proven track record in mitigating fraudulent and nefarious activities". The ECCO letter said that because the code was sent to Judge's phone, it "indicates" that the code was disclosed. Judge appealed that decision, but Scotiabank's Customer Complaints Appeals Office also claimed in a letter that evidence "suggests" Judge revealed a one-time passcode. "Evidence that may 'suggest' something isn't evidence of a fact," said Geoff White, executive director of the Public Interest Advocacy Centre. "One would like to see more in terms of actual evidence demonstrating that the customer was negligent — rather than simply an assertion." White also said the onus shouldn't be on individuals to prove they are innocent of a crime. "The onus is in fact on institutions to take care of their systems," said White. "Make sure that their processes are secure." Popa, the cybersecurity expert, took a look at Scotiabank's correspondence and says the financial institution didn't provide evidence of "the most basic investigation," which would include reviewing a log of activities that would be time-stamped — such as showing when an individual received the one-time passcode and when it was entered into a web interface. "This was never provided," said Popa. "Nor was there an indication that this kind of log was inspected." Contrary to Scotia's insistence that a one-time passcode is a proven fraud deterrent, Popa says a code sent via email or SMS is vulnerable to "a number of different types of compromises" and is less safe than using an authenticator app. Cellphones can be hacked using malware or spyware and SIM cards can be hijacked — allowing fraudsters to intercept text messages. The Canadian Anti-Fraud Centre also told Go Public that it recommends people use an authenticator app when possible. "Unlike SMS/text messages or email messages, authenticator apps generate time-sensitive passcodes that are not vulnerable to SIM swapping or potential text message and email interception," wrote CAFC spokesperson Jeff Horncastle. The Quebec-based advocacy group Option consommateurs has been calling on the federal government to strengthen protections for banking customers in cases of fraud. In a proposal to MPs earlier this year, the organization said the Bank Act should require transparency when a bank investigates, and clarify that the burden of proving the customer was highly negligent rests on the bank. Go Public contacted Anglia Ruskin University to ask about the charge on Judge's credit card. A representative said Scotiabank never contacted the university — another disappointment to Popa. "Why would you not contact an organization that you know exists?" asked Popa. "They have a duty to investigate and to protect their customers." After Go Public made several inquiries with the university, it said it conducted an investigation and reimbursed Judge. A spokesperson said it could not elaborate on its findings, such as whether the money was used to pay for someone's tuition. Go Public also asked Scotiabank several times what evidence it had to hold its customer responsible for the fraudulent charges. Although the bank did not reply, it recently credited Judge's bank account — covering the outstanding $1,800 paid to "Paula S. Taylor" and the interest that had accrued on both charges. Judge says no one from Scotiabank contacted him to explain the about-face. "I do think it's ridiculous that it took the media to get involved until they decided they would even act as if they cared," said Judge. Previously, Scotiabank had offered Judge $200 as a "goodwill gesture," but said he would have to acknowledge his claim was resolved and drop any further action. Judge declined. Although he has been fully compensated, Judge had to push for almost eight months, and is still left without any answers about why Scotiabank insisted for so long that he was responsible for the fraud. "My biggest concern is that there are people in his situation … who may not have the ability to pressure their financial institution to be more transparent or to recognize the fact that they might not be guilty," said Popa, the cybersecurity expert. "People are out there who are simply being silently victimized." Submit your story ideas Go Public is an investigative news segment on CBC-TV, radio and the web. We tell your stories, shed light on wrongdoing and hold the powers that be accountable. If you have a story in the public interest, or if you're an insider with information, contact gopublic@ with your name, contact information and a brief summary. All emails are confidential until you decide to Go Public. Read more stories by Go Public. Read about our hosts.
Yahoo
3 days ago
- Business
- Yahoo
Scotiabank holds customer responsible for almost $20K in credit card fraud
Jordon Judge's cellphone rang as he sat in his local Vancouver coffee shop last October — caller ID said the person was from Scotiabank. He had no idea it was actually a fraudster who had manipulated the call display, a practice known as phone call "spoofing." The fraudster said he was calling to flag two suspicious charges that were coming through on Judge's Scotiabank Visa card. Judge said he hadn't approved those charges and the caller said they would be blocked. But two days later, Judge spotted two large charges on his credit card statement, totalling almost $20,000. "Those were not my charges," he told Go Public. "So it was definitely astonishment." It was the beginning of a long and frustrating process, during which Scotiabank continued to insist he was liable for the fraudulent charges. Credit card fraud is a growing problem. The Canadian Anti-Fraud Centre doesn't track how much money people lose to it, but says that over the past three years, an increasing portion of identity fraud cases have involved compromised credit cards. WATCH | On the hook for $20K: The Ombudsman for Banking Services and Investments says complaints related to fraud are the number one issue it deals with, and only e-transfers have more fraud complaints than credit cards. Under federal law, a person's maximum liability for unauthorized credit card transactions is generally capped at $50 unless the bank can prove the customer was grossly negligent in protecting their card. A cybersecurity expert says increasing fraud and the rise in complex technology means financial institutions should be conducting thorough investigations and providing clear evidence when holding customers liable. "All that the bank has done is accuse [Judge] of either negligence or malice," said Claudiu Popa, who has 35 years' experience in cybersecurity and wrote The Canadian Cyberfraud Handbook. "The bank has to prove that the customer is the one who perpetrated this quite significant and sophisticated fraud." Scotiabank declined an interview request, did not answer any written questions and instead sent a brief statement, reminding customers to safeguard their personal information. The fraudster who called Judge asked for his birth date and mother's maiden name, which Judge shared. But then the fraudster asked him to share a "one-time passcode" — a type of two-step verification — that was texted to his phone. Judge says he refused to do that, because the message also told him not to share the code with anyone, and said that no one from Scotiabank would ever ask for it. The fraudster claimed that he stopped the charges from going through and hung up. But two days later, Judge discovered a charge for $17,900 to Anglia Ruskin University in the U.K. on his statement, and a second for $1,800, supposedly paid to someone by the name of Paula S. Taylor. "I wasn't worried at the time because I knew those weren't my charges," said Judge. "I thought I couldn't be held accountable for it." Judge filed a request for compensation with Scotiabank, which sent him a letter a few weeks later, saying the bank had "examined all relevant documentation" and concluded that he was responsible for the charges. The letter did not outline what evidence had been reviewed and did not explain why the bank concluded he should be on the hook for almost $20,000 — plus the growing interest. "When people sign up for credit cards, they're under the assumption that if they get scammed, they're not liable for the purchases made on their credit card," said Judge. "Apparently that's not the case." He appealed, and a second letter — from Scotiabank's Escalated Customer Concerns Office (ECCO) — also found Judge responsible, stating that a one-time passcode was used for the university charge, calling it "a feature that has a proven track record in mitigating fraudulent and nefarious activities". The ECCO letter said that because the code was sent to Judge's phone, it "indicates" that the code was disclosed. Judge appealed that decision, but Scotiabank's Customer Complaints Appeals Office also claimed in a letter that evidence "suggests" Judge revealed a one-time passcode. "Evidence that may 'suggest' something isn't evidence of a fact," said Geoff White, executive director of the Public Interest Advocacy Centre. "One would like to see more in terms of actual evidence demonstrating that the customer was negligent — rather than simply an assertion." White also said the onus shouldn't be on individuals to prove they are innocent of a crime. "The onus is in fact on institutions to take care of their systems," said White. "Make sure that their processes are secure." Popa, the cybersecurity expert, took a look at Scotiabank's correspondence and says the financial institution didn't provide evidence of "the most basic investigation," which would include reviewing a log of activities that would be time-stamped — such as showing when an individual received the one-time passcode and when it was entered into a web interface. "This was never provided," said Popa. "Nor was there an indication that this kind of log was inspected." Contrary to Scotia's insistence that a one-time passcode is a proven fraud deterrent, Popa says a code sent via email or SMS is vulnerable to "a number of different types of compromises" and is less safe than using an authenticator app. Cellphones can be hacked using malware or spyware and SIM cards can be hijacked — allowing fraudsters to intercept text messages. The Canadian Anti-Fraud Centre also told Go Public that it recommends people use an authenticator app when possible. "Unlike SMS/text messages or email messages, authenticator apps generate time-sensitive passcodes that are not vulnerable to SIM swapping or potential text message and email interception," wrote CAFC spokesperson Jeff Horncastle. The Quebec-based advocacy group Option consommateurs has been calling on the federal government to strengthen protections for banking customers in cases of fraud. In a proposal to MPs earlier this year, the organization said the Bank Act should require transparency when a bank investigates, and clarify that the burden of proving the customer was highly negligent rests on the bank. Go Public contacted Anglia Ruskin University to ask about the charge on Judge's credit card. A representative said Scotiabank never contacted the university — another disappointment to Popa. "Why would you not contact an organization that you know exists?" asked Popa. "They have a duty to investigate and to protect their customers." After Go Public made several inquiries with the university, it said it conducted an investigation and reimbursed Judge. A spokesperson said it could not elaborate on its findings, such as whether the money was used to pay for someone's tuition. Go Public also asked Scotiabank several times what evidence it had to hold its customer responsible for the fraudulent charges. Although the bank did not reply, it recently credited Judge's bank account — covering the outstanding $1,800 paid to "Paula S. Taylor" and the interest that had accrued on both charges. Judge says no one from Scotiabank contacted him to explain the about-face. "I do think it's ridiculous that it took the media to get involved until they decided they would even act as if they cared," said Judge. Previously, Scotiabank had offered Judge $200 as a "goodwill gesture," but said he would have to acknowledge his claim was resolved and drop any further action. Judge declined. Although he has been fully compensated, Judge had to push for almost eight months, and is still left without any answers about why Scotiabank insisted for so long that he was responsible for the fraud. "My biggest concern is that there are people in his situation … who may not have the ability to pressure their financial institution to be more transparent or to recognize the fact that they might not be guilty," said Popa, the cybersecurity expert. "People are out there who are simply being silently victimized." Submit your story ideas Go Public is an investigative news segment on CBC-TV, radio and the web. We tell your stories, shed light on wrongdoing and hold the powers that be accountable. If you have a story in the public interest, or if you're an insider with information, contact gopublic@ with your name, contact information and a brief summary. All emails are confidential until you decide to Go Public. Read more stories by Go Public. Read about our hosts.
CBC
3 days ago
- Business
- CBC
Scotiabank holds customer responsible for almost $20K in credit card fraud
Social Sharing Jordon Judge's cellphone rang as he sat in his local Vancouver coffee shop last October — caller ID said the person was from Scotiabank. He had no idea it was actually a fraudster who had manipulated the call display, a practice known as phone call "spoofing." The fraudster said he was calling to flag two suspicious charges that were coming through on Judge's Scotiabank Visa card. Judge said he hadn't approved those charges and the caller said they would be blocked. But two days later, Judge spotted two large charges on his credit card statement, totalling almost $20,000. "Those were not my charges," he told Go Public. "So it was definitely astonishment." Got a story you want investigated? Contact Erica and the Go Public team at gopublic@ It was the beginning of a long and frustrating process, during which Scotiabank continued to insist he was liable for the fraudulent charges. Credit card fraud is a growing problem. The Canadian Anti-Fraud Centre doesn't track how much money people lose to it, but says that over the past three years, an increasing portion of identity fraud cases have involved compromised credit cards. WATCH | On the hook for $20K: Bank blames customer for $20K in credit card fraud | Go Public 5 hours ago Duration 2:09 The Ombudsman for Banking Services and Investments says complaints related to fraud are the number one issue it deals with, and only e-transfers have more fraud complaints than credit cards. Under federal law, a person's maximum liability for unauthorized credit card transactions is generally capped at $50 unless the bank can prove the customer was grossly negligent in protecting their card. A cybersecurity expert says increasing fraud and the rise in complex technology means financial institutions should be conducting thorough investigations and providing clear evidence when holding customers liable. "All that the bank has done is accuse [Judge] of either negligence or malice," said Claudiu Popa, who has 35 years' experience in cybersecurity and wrote The Canadian Cyberfraud Handbook. "The bank has to prove that the customer is the one who perpetrated this quite significant and sophisticated fraud." Scotiabank declined an interview request, did not answer any written questions and instead sent a brief statement, reminding customers to safeguard their personal information. What happened The fraudster who called Judge asked for his birth date and mother's maiden name, which Judge shared. But then the fraudster asked him to share a "one-time passcode" — a type of two-step verification — that was texted to his phone. Judge says he refused to do that, because the message also told him not to share the code with anyone, and said that no one from Scotiabank would ever ask for it. The fraudster claimed that he stopped the charges from going through and hung up. But two days later, Judge discovered a charge for $17,900 to Anglia Ruskin University in the U.K. on his statement, and a second for $1,800, supposedly paid to someone by the name of Paula S. Taylor. "I wasn't worried at the time because I knew those weren't my charges," said Judge. "I thought I couldn't be held accountable for it." No transparency Judge filed a request for compensation with Scotiabank, which sent him a letter a few weeks later, saying the bank had "examined all relevant documentation" and concluded that he was responsible for the charges. The letter did not outline what evidence had been reviewed and did not explain why the bank concluded he should be on the hook for almost $20,000 — plus the growing interest. "When people sign up for credit cards, they're under the assumption that if they get scammed, they're not liable for the purchases made on their credit card," said Judge. "Apparently that's not the case." He appealed, and a second letter — from Scotiabank's Escalated Customer Concerns Office (ECCO) — also found Judge responsible, stating that a one-time passcode was used for the university charge, calling it "a feature that has a proven track record in mitigating fraudulent and nefarious activities". The ECCO letter said that because the code was sent to Judge's phone, it "indicates" that the code was disclosed. Judge appealed that decision, but Scotiabank's Customer Complaints Appeals Office also claimed in a letter that evidence "suggests" Judge revealed a one-time passcode. "Evidence that may 'suggest' something isn't evidence of a fact," said Geoff White, executive director of the Public Interest Advocacy Centre. "One would like to see more in terms of actual evidence demonstrating that the customer was negligent — rather than simply an assertion." White also said the onus shouldn't be on individuals to prove they are innocent of a crime. "The onus is in fact on institutions to take care of their systems," said White. "Make sure that their processes are secure." Popa, the cybersecurity expert, took a look at Scotiabank's correspondence and says the financial institution didn't provide evidence of "the most basic investigation," which would include reviewing a log of activities that would be time-stamped — such as showing when an individual received the one-time passcode and when it was entered into a web interface. "This was never provided," said Popa. "Nor was there an indication that this kind of log was inspected." Contrary to Scotia's insistence that a one-time passcode is a proven fraud deterrent, Popa says a code sent via email or SMS is vulnerable to "a number of different types of compromises" and is less safe than using an authenticator app. Cellphones can be hacked using malware or spyware and SIM cards can be hijacked — allowing fraudsters to intercept text messages. The Canadian Anti-Fraud Centre also told Go Public that it recommends people use an authenticator app when possible. "Unlike SMS/text messages or email messages, authenticator apps generate time-sensitive passcodes that are not vulnerable to SIM swapping or potential text message and email interception," wrote CAFC spokesperson Jeff Horncastle. The Quebec-based advocacy group Option consommateurs has been calling on the federal government to strengthen protections for banking customers in cases of fraud. In a proposal to MPs earlier this year, the organization said the Bank Act should require transparency when a bank investigates, and clarify that the burden of proving the customer was highly negligent rests on the bank. Judge gets his money back Go Public contacted Anglia Ruskin University to ask about the charge on Judge's credit card. A representative said Scotiabank never contacted the university — another disappointment to Popa. "Why would you not contact an organization that you know exists?" asked Popa. "They have a duty to investigate and to protect their customers." After Go Public made several inquiries with the university, it said it conducted an investigation and reimbursed Judge. A spokesperson said it could not elaborate on its findings, such as whether the money was used to pay for someone's tuition. Go Public also asked Scotiabank several times what evidence it had to hold its customer responsible for the fraudulent charges. Although the bank did not reply, it recently credited Judge's bank account — covering the outstanding $1,800 paid to "Paula S. Taylor" and the interest that had accrued on both charges. Judge says no one from Scotiabank contacted him to explain the about-face. "I do think it's ridiculous that it took the media to get involved until they decided they would even act as if they cared," said Judge. Previously, Scotiabank had offered Judge $200 as a "goodwill gesture," but said he would have to acknowledge his claim was resolved and drop any further action. Judge declined. Although he has been fully compensated, Judge had to push for almost eight months, and is still left without any answers about why Scotiabank insisted for so long that he was responsible for the fraud. "My biggest concern is that there are people in his situation … who may not have the ability to pressure their financial institution to be more transparent or to recognize the fact that they might not be guilty," said Popa, the cybersecurity expert. "People are out there who are simply being silently victimized."
Yahoo
26-05-2025
- Business
- Yahoo
Equifax wiped out his credit score — and a little-known policy means he can't get it back
David Tregear says getting credit was never a problem, until the rejections started piling up. A car loan, credit cards and more — all denied. When he checked his Equifax account, he saw his score had been wiped to zero — without warning or explanation. "I was just stunned," said the Victoria man. "I was like, what do you mean I don't have credit? Are you kidding me?" What followed was more than a year of frustration. Tregear says he begged Equifax to fix the problem — sending documents, filing complaints, even turning to federal and provincial oversight bodies for help. Nothing worked. Equifax refused to restore his credit score or explain why it dropped to zero, until Go Public started asking questions. Only then did the company point to its little-known policy: If a credit file sits inactive, the consumer may be labelled "unscoreable" and their score reset to zero. Tregear says the last time he checked, before it disappeared, his score was around a more respectable 700. He says it's true that he stopped using credit to avoid falling into debt, but never imagined he'd be penalized for it. Equifax told him it's a two year cutoff, but won't say if that's true for everyone. Canada's other major credit bureau, TransUnion, says it doesn't reset credit scores. A credit score is a number that typically ranges from 300 to 900 and shows lenders how likely you are to repay debt. Tregear says the consequences have been serious — especially since many lenders rely solely on Equifax. WATCH | Reset to zero: "This has to be rectified somehow," he said. Equifax told him he'll have to rebuild his credit score from scratch — a challenge, he says, since he can't get approved for credit without one. Go Public has since found a major flaw in consumer protection rules — that there are no laws or oversight on how credit scores are calculated, leaving credit bureaus to do what they want. Consumer advocate Geoff White says that gives credit bureaus too much power, with no transparency. "A credit score is a very important piece of information. It shouldn't be arbitrarily wiped out through lack of use of credit," said White, executive director of the Public Interest Advocacy Centre, a non-profit that advocates for consumer rights. "The customer is out of luck," he says. "This shows there's a hole in Canada's consumer protection system when it comes to credit." Equifax says its website is clear about how scores are calculated — citing factors like payment history, available credit and public records. But it also says having different scores from Equifax and TransUnion is "completely normal," because each bureau uses "multiple scoring algorithms," and that "there are some differences in the calculations." Equifax refused to answer Go Public's specific questions about Tregear's case, how it justifies deleting a consumer's long-standing credit score due to inactivity, or how that policy affects Canadians. Instead, it sent a general statement partly saying it takes "consumer concerns very seriously" and "prides itself on being a trusted steward of personal data" and is "committed to maintaining the accuracy of all credit data… in compliance with applicable legislation." Tregear says the reset has left him stuck — unable to get credit or buy a home — because many lenders only check Equifax. He says every time he opened a complaint, Equifax closed it without resolving anything. "They've never reached out to me," he said. "I've always had to call in and with no success. I started feeling defeated." Equifax's website mentions the policy, saying: "Sometimes there's not enough information in your credit file to provide a credit score… This is not an indicator of bad credit history." But White, and other credit experts, tell Go Public that's just not the case. "A zero credit score means you're starting from scratch," he said. "Credit scores influence not only the decision to lend or not lend… it affects your ability to get a good interest rate on your mortgage." The Financial Consumer Agency of Canada (FCAC) also flags the issue on its website: "It's impossible to know exactly how much your credit score will change based on the actions you take. Credit bureaus and lenders don't share the actual formulas it uses to calculate credit scores." Go Public asked Equifax about transparency concerns. It didn't respond. Tregear says trying to get help felt like being stuck in a bureaucratic maze. He's written letters, made countless phone calls, and even filed complaints with both provincial and federal regulators — but got no help. "Everybody was just referring me back to somebody else or referring back to the same person that referred me to them," Tregear said. He tried the Office of the Superintendent of Financial Institutions, which referred him to the FCAC, which said it doesn't handle complaints about credit bureaus. Then he was sent to Consumer Protection B.C., which said it was outside their mandate, and he should contact the privacy commissioner — but it wasn't clear whether that meant the federal or provincial office. "It's been crazy," Tregear said. White says when things go wrong — like in Tregear's case — the complaints process can be "tortuous." He says Tregear's case shows the maze consumers face with no clear path forward. "It tells me there's a lack of common-sense rules," said White. "This is a big problem." He says Ottawa can — and should — step in and create consistent national standards by regulating credit bureaus under the Bank Act, rather than leaving oversight to provinces with a patchwork of regulations. While banks fall under federal regulation, credit bureaus are overseen by provincial agencies — and rules can vary depending on where you live. In general, provinces make sure credit reports follow basic rules like getting consent before someone accesses your report, addressing false information and overseeing privacy like how personal data is collected, used and shared. But credit scores are a different story. No government agency regulates how they're calculated — or whether they're fair. Credit bureaus, which are private companies, make their own rules. "Credit reporting… needs an overhaul and we need clear federal rules that allow for accountability and more transparency in terms of how this process works and how life-affecting decisions are made," said White. Go Public asked Finance Minister François-Philippe Champagne if he plans to step in — but got no response. The ministry would only say credit bureaus aren't under federal control. Equifax says it is already "a highly regulated business… governed by both applicable credit reporting and privacy laws in Canada. To protect the integrity of our processes, procedures and to ensure we comply with applicable law, we do not allow for public comment on consumer inquiries." After Go Public brought Tregear's case to their attention, two B.C. agencies — Consumer Protection B.C. and the provincial privacy commissioner — reached out to him offering to investigate. He'd contacted the wrong privacy office — the federal one — by mistake, and Consumer Protection B.C. had wrongly turned him away. That agency now admits it "overlooked" some jurisdictional issues and says it's reviewing its processes to make sure it doesn't happen again. But Tregear says he doubts he'll get the help he needs — especially with Equifax's little-known policy still in place. "I'm being punished for living debt-free," he said. Submit your story ideas Go Public is an investigative news segment on CBC-TV, radio and the web. We tell your stories, shed light on wrongdoing and hold the powers that be accountable. If you have a story in the public interest, or if you're an insider with information, contact gopublic@ with your name, contact information and a brief summary. All emails are confidential until you decide to Go Public. Read more stories by Go Public. Read about our hosts.
Yahoo
31-03-2025
- Yahoo
Ontario judge condemns WestJet's attempt to include gag order in settlement offer
Andrew Douglas says he was just fighting for compensation when he took WestJet to small claims court — instead, the dispute has resulted in what's believed to be a landmark decision that can now be pointed to by all air travel passengers battling it out with the airlines. "Beware of seniors, they have a lot of time on their hands," the 72-year-old Ottawa man told Go Public, referring to the fact that his dispute with WestJet began more than three years ago. In her decision on costs earlier this month, the judge condemned WestJet's insistence that Douglas sign a non-disclosure agreement (NDA) in order to get compensation the airline owed him after he was incorrectly not allowed to board a flight to Cuba. Nobody in Canada tracks how often NDAs are used, but experts in the airline industry say imposing confidentiality clauses in settlement offers is an increasingly common tactic, which is why this recent decision is so important. An advocate for air passengers says the decision sends an important directive to the airline industry. "Finally, a judge calls out an airline for trying to gag passengers," said Gábor Lukács, founder and president of the Air Passenger Rights group. "That is a stern warning … they cannot get away with it." How it began Douglas's tale began on Jan. 31, 2022, at the Ottawa airport. He was headed to Cuba — a country he travels to regularly, visiting friends and bringing supplies to people in need, like the medicine he brought with him on a trip in January. "I brought a lot of acetaminophen and ibuprofen because that's hard to find," he a WestJet agent told him — incorrectly — that he wasn't allowed to check in, because he couldn't provide proof of a recent negative Covid test. Douglas knew the regulations had recently changed, so he'd brought with him a printed page from the website of the Cuba Tourist Board of Canada, clearly stating that no Covid test was required for Canadians going to Cuba. But neither the WestJet agent nor a supervisor who was called in would listen when Douglas pleaded his case, or check the website themselves. The real burn, said Douglas, was that WestJet refused to refund his $410 ticket — offering instead to refund his baggage fees and give him a credit to take a later trip with the airline. "I don't want flyer points," said Douglas. "I am not flying WestJet again." Andrew Douglas stands in front of the National Capitol building in Havana, Cuba, on a recent trip. (Submitted by Andrew Douglas) Turned away at the airport, he returned home and sent the airline a request for a refund via a registered demand letter — a formal, written request, asking the company to fulfil a legal obligation before he potentially took legal action. WestJet did not reply, so Douglas felt he had no option but to file in small claims court. "Who was ever going to believe that an airline would simply turn a passenger away for no good reason?" he said. Because he had no legal background, Douglas headed to the Ottawa public library and found a book written by a former small claims court judge, explaining how a member of the public can take a case to court. Before heading to the Ottawa airport, Douglas printed off these rules from the Cuba Tourist Board of Canada, showing no negative Covid test was required for his travel. (Raphaël Tremblay/CBC) He also relied on information provided to him by Lukács, of Air Passenger Rights. He filed his case in March 2022. WestJet asks for gag order Five months later, Douglas received an email from WestJet, offering to pay $790 in compensation for his airfare and another flight he missed because he couldn't take the trip. But the offer came with a hitch — the requirement that he sign an NDA — so Douglas declined the offer. Before a small claims case goes to court, there's a settlement conference — where both sides try to come to an agreement before a judge, potentially avoiding a trial. At that hearing, WestJet again offered Douglas a refund of $790 and again required he sign an NDA — so once again, he turned down the offer. WestJet made two more offers, slightly increasing the amount of the refund each time, but still requiring that Douglas keep silent. So he turned those down, too. One week before the trial was set to begin, WestJet upped its offer again — to $1,298 — still requiring a gag order and warning Douglas that there would likely be consequences if he lost in court. "Should you choose not to accept this offer and proceed unnecessarily to trial, we expect to receive instructions from our client to seek penalties and costs against you," wrote Anika Garlick, the lawyer for WestJet. Still, Douglas refused to settle. "It's not about the money. It's the point of the argument," he said. "This buying silence has to stop." Gábor Lukács, founder of Air Passenger Rights, says the court decision sends a strong message to airlines — they cannot force passengers to be silent in order to get compensation. (Galen McRae/CBC) Air passenger advocate Lukács says he sees nothing wrong with people settling without going to court, as long as the offer is reasonable and, importantly, that passengers are at liberty to speak about what happened. "Because we are talking about money that is owed to them under law," said Lukács. "It is not a goodwill gesture. It's not a handout … It is simply what is owed the passenger — and there should be no confidentiality whatsoever there." Judge condemns WestJet In her ruling, the judge ordered WestJet to refund Douglas for his airfare and costs he incurred travelling to and from the airport and filing his lawsuit. She also condemned WestJet for trying to impose a confidentiality clause, saying it was "problematic," a "serious defect" and that there should not be "strings attached" to receive a "long-overdue refund." She wrote that WestJet would not be asking for an NDA unless there was a financial advantage to it, and that the advantage was apparently "worth the trouble and expense of a trial to the defendant not to offer settlement without it." "This decision sends a clear message to the airlines that if an amount is undisputed, the airline should pay it," said Lukács. A lawyer who has studied the use of confidentiality clauses within Canada's air travel industry calls the decision "well-reasoned" and a win for air travel passengers. "This decision could indeed change the way airlines litigate — and for the better," said Paul Daly, Research Chair in Administrative Law and Governance at the University of Ottawa. "It would mean more information in the public domain." Douglas, who waited almost three years for his day in court, said he was pleased with the judge's harsh criticism of WestJet's use of an NDA. "It's pretty strong language," he said. "But I feel it's justified the way I was mistreated." The judge's decision on costs called out WestJet's use of a confidentiality clause. (Raphaël Tremblay/CBC) The judge also slapped the airline with an additional $410 penalty for withholding money it owed the 72-year-old plaintiff for so long — a delay she found "particularly vexing." "A penalty in a lesser amount would be insufficient to deter the defendant from repeating this conduct in other cases," she wrote, chastising WestJet for not paying up for more than two years and seven months after the start of litigation. "Courts cannot condone hardball tactics," wrote the judge. "Especially in circumstances where there is a power imbalance between a corporate litigant (here the second largest airline in Canada) and an individual." All told, the judge ordered WestJet to pay Douglas $2,118 — plus interest from day one of the dispute. WestJet declined an interview request from Go Public. In a statement, an airline spokesperson wrote that confidentiality clauses are "fundamental to ensuring that both parties can transparently explore both the unique circumstances and the unique solution which may be available and lead to common ground." Douglas wants 'denied boarding' definition changed Meanwhile, Douglas hopes to help strengthen other protections for air travellers. He's made a submission to the Canadian Transportation Agency (CTA) regarding the definition of "denied boarding" in proposed changes to the Air Passenger Protection Regulations. As it stands, travellers can only file for "denied boarding" if they can prove a plane is overbooked (a practice also known as "bumping"). That's why Douglas couldn't file a complaint about his WestJet dispute with the CTA and had to go to court — his situation wasn't covered under the current regulations. He wants Canada to align with the European Union's definition of "denial of boarding" that would limit a carrier's ability to deny compensation to passengers with a confirmed reservation only if they show up late for check-in, don't have valid travel documents, or refuse to comply with health, safety or security requirements. "Then in instances like mine, where you're just wrongly refused transport, you would be compensated exactly the same as if the plane had been overbooked," said Douglas. The Air Passenger Rights group has also submitted to the CTA a 27-page analysis of the proposed "denied boarding" regulation — it, too, is calling for similar protections provided in Europe. A strong message to the airline industry Lukács says he will post Douglas's small claims court victory on his group's Facebook page, so others can use it to fight gag orders in disputes against airlines. He calls it a strong message to the entire airline industry to smarten up. "Wasting for years the passengers' time, the legal system's time, judges, clerks, tens of thousands of dollars in public money for a $1,000 dispute," Lukács said. "That is not how we want to use our public resources in Canada." Douglas says he's proud to be behind a case that will likely help a lot of other frustrated airline passengers. But he says no one "in their right mind" would spend three years just to win back what they're owed. "Don't go to court for money," he said. "Go to court because they're really treating you badly. And you deserve justice." Submit your story ideas Go Public is an investigative news segment on CBC-TV, radio and the web. 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