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Competitive Edge Blog

  • alison28006

Is e-transfer a secure and safe method of payment?

The news recently reported that you can cancel e-transfers up to 24 hours after they are sent, even if your recipient has an auto-deposit setup and receives a confirmation number.

The big banks, Bank of Montreal, CIBC, The Royal Bank, Scotia Bank, and TD advertise auto deposits as "fast" and "secure." Auto deposits are designed and promoted as a way to prevent fraudsters from intercepting funds because they are deposited directly into the account without any additional steps required , such as answering a security question.

By using auto-deposit, sellers are usually more confident that the money will show up in their bank account when they sell an item online or at their garage sale. In reality, depending on which financial institution the money was sent from, some e-transfers can be canceled even if the recipient has an auto deposit enabled.

When tested by the media - All test e-transfers sent could be canceled by senders until the recipient answered the security question, and those transfers expired after 30 days.

Even if the security question hadn't been answered yet, every financial institution notified the sender that the transaction had been completed.

When the media tested e-transfers sent to accounts with auto-deposit set up, if they came from the big banks, the senders could not cancel them.

Credit unions, however, sometimes give their customers more than half an hour to cancel an e-transfer, even though all parties had been notified that the transfer was completed, and the recipient was never informed that it had been canceled.

Everyone needs to know that if you're doing e-transfers, you should always remember that there's a possibility that you might not actually get the money, and that you are not really protected until you see the money has actually arrived in your account.

After reading some of these stories, I personally recommend turning off auto deposit, and requiring the use of a code word or password to more fully protect yourself.

Until next time,

Christine Walters

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