Is there a difference between paying your dues at the courthouse, at the post office, at the spa or at the dentist? For CIBC, yes. And this difference costs its customers $5, in addition to some interest.
Posted at 1:38 a.m.
Updated at 6:30 a.m.
FS AV ESP/VIR SOL/CHQ PR/VERS: When this code appears on a CIBC credit card statement, it means that a cash advance has been made.
A woman I’ll call Nicole because she doesn’t want to be identified by her bank came across this gibberish even though she hadn’t withdrawn money with her card. So she called CIBC to figure it out.
Surprise ! He was told that the cash advance was associated with a transaction concluded at the Longueuil courthouse. The woman had actually opened a file in the Small Claims Division of the Court of Quebec.
“Generally, transactions carried out by the government are cash advances. And all cash advances incur fees and also interest, a CIBC representative told him on the phone. The courthouse treats the transactions as cash advances. »
Nicole had the good idea to record the conversation. If I hadn’t listened to her, I probably wouldn’t have believed this disconcerting affair.
The bank representative even adds that it is “the merchant who decides” whether a payment is a cash advance or a purchase. He then suggests that the Quebec government has something to do with this story: “All transactions at the SAAQ are cash advances. »
This is not the first time that CIBC fees have caused astonishment. In March, a report from the show The invoice1 revealed that this bank considered the purchase of certain gift cards as a cash advance. However, it is prohibited to charge fees that are not provided for in your contract, and the CIBC contract said nothing about gift cards. CIBC has since stopped this practice.
1. Consult the report of the show The invoice
Clearly, however, other transactions that do not amount to cash withdrawals continue to generate unexpected fees and interest for its customers.
It is important here to know that interest on cash advances is generally higher, and it starts accruing the second the money is withdrawn since there is no grace period like this is the case when shopping. In addition, at CIBC, a flat fee of $5 per transaction is charged. For these three reasons, it is therefore better to avoid this type of very expensive loan.
But you still need to know what constitutes or does not constitute a cash advance. In its contract, CIBC gives three examples: games of chance and lotteries, transfers of funds and purchases of negotiable securities such as traveler’s checks or money orders.
What category do courthouse payments fall into? The bank’s communications department did not tell me this, but confirms the customer service version. “A payment to the court is an advance of funds,” writes spokesperson Josh Burleton.
This response leaves lawyer Claudia Bérubé, specialist in consumer law and lecturer at the University of Sherbrooke, perplexed. “Honestly, their reasoning is questionable. It’s really surprising. » Her colleague Sylvie De Bellefeuille, lawyer at Option consommateurs, does not understand the bank’s interpretation either. “It’s a bit strange. »
This story is all the more surprising because Desjardins does not see how an invoice produced by a courthouse would be treated in any particular way. The cooperative also confirmed to me that merchants do not have the discretion to decide whether or not a payment is considered a cash advance.
According to the National Bank, the Mastercard network “provides a guideline” on this subject. “As a card issuer, we have the right to make adjustments, but this is not a widespread practice at the National Bank,” indicates a spokesperson, specifying that at the courthouse, a payment is considered a purchase.
On the side of BMO, which issues both Mastercard and Visa cards, it is asserted on the contrary that the Municipal Court has complete freedom to decide how it processes payments, because “the merchant codes the transaction”.
In the case of Loto-Québec, on the other hand, customers know what to expect. If they deposit $20 into their account, CIBC will add a $5 fee. In order to limit complaints and unpleasant surprises, the state corporation clearly writes on its website that some banks charge fees, without naming them.
At the SAAQ, we don’t really understand why CIBC told Nicole that a payment was considered a cash advance, because credit cards are not accepted. Neither online, nor in service centers, nor at agents.
For its part, the Department of Justice responded to my questions as follows: “CIBC charges cash advance fees because the transaction categorization code is considered as such. CIBC has asked the Quebec Ministry of Justice to refer customers to their complaints department so that it can deal with each of the problem cases. » We do not understand the origin or justification of the categorization code, but we know that the bank expects complaints.
When the gift card fee story hit the media, CIBC was “firm on its reasoning,” recalls M.e Claudia Bérubé, before changing her tune. Will the same scenario happen again? Bets are on.
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