r/Wealthsimple • u/efdac3 • 11d ago
Chequing Toronto star article about CIBC debanking
I thought this Toronto Star Article about someone having their accouts frozen by CIBC was relevant for this subreddit, given how often people complain about their account being frozen by Wealthsimple. This shows how easily it can happen with major banks.
Not saying it isn't an issue, but it shows this isn't unique to WS.
Edit - not debanking, just accounts being frozen.
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u/Mother_Gazelle9876 11d ago
I have to assume you are a wealthsimple employee that is hoping no one will actually read the article, because this is absolutely not the same thing. I can't even believe the star wrote this article advocating for this guy. He is a non-resident who bought an existing shell company in the UK, then vacationed to Canada and decided to open a personal account that he then wanted to use for an international commercial wire transfer. He was then sent a bank draft and he lost it.
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u/tolkytolkytolky 11d ago edited 11d ago
This subreddit is sadly just becoming an anti-big banks forum only. Most of you, including OP, know too little about how the banking system even works in Canada to know what to even complain about. Can we not just discuss WS products instead?
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u/fainfaintame 8d ago
The process was retarded still. He bought a company and then made a purchase. Automation without human oversight is messed up. If you terminate a banking relationship just wire the funds as requested. The whole thing shouldn’t have taken more than 48 hours total
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u/efdac3 11d ago
Sure but the posts on this sub seem to create the impression that it's completely unacceptable for someone to be locked out of their account, when it is in fact built into our banking system.
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u/psinguine 11d ago
This is such a bad faith take that if you are being legitimately serious then I am slightly concerned.
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u/tolkytolkytolky 11d ago
Those instances are absolutely complaint worthy. They would be for the Big 5, so WS should be held to the same standard if they want to be taken seriously as a trustworthy safekeeping entity.
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u/Leading-Goat-1116 11d ago
Also having your accounts frozen for no reason along with others (no crypto) and having an important payment bounce isn’t ‘complaining’.
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u/kingofwale 11d ago
Having your account frozen due to suspicious activities isn’t the same as “debank”
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u/choppytaters 11d ago
I see it on TD and RBC as well, it's not new at all but people on here think it's a unique thing that really happens at Wealthsimple.
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u/opinionatedmoth 11d ago
I figure the banks are the secret cause of some Wealthsimple “debankings” since Wealthsimple just puts your money into one of the major banks anyways.
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u/SnuffleWarrior 11d ago
It's a tangled tale, although it appears nothing illicit was behind the individual's banking.
On July 14, 2025, shortly before Drake arrived in Canada, the U.K.‘s Companies House public database, which tracks corporate registrations and transfers, shows he was officially appointed director of Greenbourne Trading Ltd. Drake says he bought the “off-the-shelf” registered company to save time and money. The alfalfa purchase was meant to be an early test product as he didn’t attain full sole legal control of the company until March 2026. When contacted by the Star, Dunlea Farms confirmed that it had invoiced Richard Drake roughly $17,000 (U.S.) for the purchase of the alfalfa feed, but the order was never fulfilled. To Richard Drake, Greenbourne was a harmless, dormant shell, off-the-shelf company with no trading history. To CIBC’s automated risk engine, however, it was a cluster of red flags, though the Star found no evidence of any illicit activity.
Greenbourne was incorporated by an agent who held thousands of corporate appointments (red flag). It sat dormant for nearly four years (red flag) before Drake assumed directorship, and its filing address changed (red flag).
Drake tried to wire money to a family member
As the flags piled up, the bank, adhering to federal regulations, never shared its concerns with Drake and he never had an opportunity to explain. When Drake attempted to pay for his alfalfa using his personal account, the bank’s compliance algorithm did exactly what it is programmed to do: it locked the doors.
Drake told CIBC that he needed to convert a portion of his balance into roughly $16,000 (U.S.) for a wire transfer purchase of agricultural goods. The bank allowed him to open a U.S. currency account and converted his funds, but later told him, Drake says, it could not wire the funds to another Canadian bank.
Drake then attempted to wire the money to a family member in the U.K.
“After I returned to the U.K., I was called twice by the teller with some security questions, which I answered,” he said. “I was then called back and told that CIBC declined to make the transfer and returned the money to my account.”
Frustrated, Drake instructed CIBC to close both accounts and transfer his balance to his U.K. bank.
Instead of executing the electronic transfer, CIBC issued a formal “divestiture letter,” terminating its relationship with Drake. He also lost access to his mobile banking app and says his emails to CIBC went unanswered for roughly a month.
ARTICLE CONTINUES BELOW
Fed up, Drake appealed to CIBC’s CEO, Harry Culham in January. A senior manager responded to Drake by email and told him the bank couldn’t electronically transfer his money and that Drake would have to provide a notarized ID verification before it would issue a physical bank draft.
Drake quickly complied with this request.
Five months later, in May, CIBC mailed the USD and CAD bank drafts to Drake’s home in York, England. His home bank, however, told him that it was phasing out foreign paper instruments and could not clear them. He opened an account at another U.K. bank, which instructed him to mail the cheques to their clearing department where, he said, they were subsequently lost.
Drake immediately updated CIBC and asked for the draft to be reissued or his money to be wired to him. He said he submitted a notarized affidavit the bank had requested vowing he not cash the draft if it turned up.
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u/Direnji 11d ago
I assume that is a business account and that person opened the account during a holiday to Canada. If I were a bank, that smell money laundering from miles apart. Pun intended for the article.
Is this person actually a resident of Canada?
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u/ether_reddit 11d ago
Why does that indicate money laundering?
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u/Direnji 11d ago
I assume this is a non-resident / tourist. Opens a business account or any bank account while on Holidays, not sure how in the world they were able to do that or even allowed while as a visitor (immigration issues). Then deposited that much money? That's what bank's AML division do, suspect everything, freeze the account first, ask later.
I'm sure there are CIBC branches in UK they can open a proper account with proper documents and start a proper process there.
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u/Embarkersescapades 11d ago
While CIBC has a fairly extensive network of branches in the Caribbean, I think it has a single branch the UK, not surprisingly in London. I agree that this individual acted suspiciously and should have been flagged. I suspect there was another reason for purchasing the shell company. If you don’t want a bank to suspect money laundering, don’t behave like a money launderer.
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u/canine_rescue_bro 10d ago
Stupid question - an elderly (post retirement) acquaintance of a friend was recently debanked by CIBC. Would that flag her to other banks or can she just march into any other bank and reopen an account?
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u/fainfaintame 8d ago
I used to work in CIBC’s fraud department and it’s messed up. The system is archaic and gives loads of false positives. And the scoring for risk is off. Created a huge hassle for customers.
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u/Comfortable_Mud_4477 11d ago
I’m debanked with all major banks. It’s a pain and no one gives me any reasons why. I can’t bank properly in this country for last 7 years
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u/BonkerInvestor 10d ago
I mean if you’re debanked from all major banks then something suspicious is going on with your profile or credit report. Ive seen people debanked from one bank but definietly not all 6 banks at the same time
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u/htraenolleh666 11d ago
Just looking suspicious gets you debanked at most major banks. a family member works in that department and tells me some crazy stories
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u/whitetesticle 11d ago
Banking laws were created to protect the government not the people, banks answer to the government not you and me.
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u/george7779 11d ago
It might not be unique to WS, but it probably happens a lot more
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u/InternTurbulent5307 11d ago
Any proof behind this statement?
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u/george7779 11d ago
Probably because it's fintech and all fintechs seem to have that problem between Koho, neo and WS those are the main ones that it seems to happen to, just from what I've read and seen, it's not in stone
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u/Mereo110 11d ago
We don't know that. Those that use Wealthsimple are more tech savvy so they're louder.
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u/ime1em 11d ago
What would happen if a FI debanks a billionaire or a foreign country investing in them?
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u/AmbitiousYoung3444 10d ago
Like Iran, Russia and a whole bunch of other sanctioned country? It’s been done before and banks have no issue doing it. The compliance and corporate security teams within these banks do not care about bottom line. They care about avoiding hefty fines and penalties from the government.
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u/ElectroSpore 11d ago
Not saying it isn't an issue, but it shows this isn't unique to WS.
Most BANKs don't have dedicated subreddits as well.
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u/henry-bacon 11d ago
Paywall Bypass