Woman sues TD after being defrauded of $240K

An elderly Lethbridge woman who was systemically defrauded of more than $240,000 in a series of scams is now attempting to sue her bank for not doing enough to prevent the fraud.

According to a decision of the Court of Queen’s Bench of Alberta, an 81-year old customer of TD Bank, Helen Franiel, was the victim of 26 scams over a 10-month period, including a lottery scam and Canada Revenue Agency (CRA) scams.

Starting in March 2018, Franiel “was persuaded to go to the bank 26 times for bank drafts to give to the fraud artists,” the court noted. As a result, she lost $241,730 and is now suing the bank “on the basis that the bank owes a duty of care to its customers to help prevent frauds like this.”

Franiel is seeking the $241,730 that she lost, plus bank fees and $150,000 in damages.

She argues that “an elderly customer, attending regularly for bank drafts for significant amounts of money mostly just under $10,000.00, dealing face-to-face with tellers, should have raised ‘red flags’ to the bank, and the bank should have stepped in to stop her,” the court said.

The court noted that the bank is defending the claim on the basis that “there is no such duty of care as the plaintiff asserts, and if there is, the bank exercised reasonable oversight in the circumstances.”

The court decision stems from an application regarding the pre-trial examinations for discovery. The plaintiff sought an order requiring the bank to answer questions that its witness refused to answer in pre-trial discovery, claiming that the bank’s refusals to answer certain questions were improper.

The court concluded that “most of the bank’s objections to questions were not valid and most of the undertaking requests that remained in dispute before me were proper requests.”

It ruled that the plaintiff “is entitled to re-commence questioning of the bank’s corporate representative.”

The court also said that “it seems to be the bank’s unstated position that since it is confident that it owes no duty of care at all to see why a customer is withdrawing or investing her money and no duty to decline to act on the customer’s instructions, it is not obliged to provide candid answers to questions as to the bank’s level of knowledge of these sorts of frauds generally, or its specific level of knowledge of the plaintiff’s behaviour. If this has guided the objections, it is an error.”

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.