Canadian Bank-Fraud Victims Press Ottawa to Shift Liability

Key Takeaways

• Victims want banks to bear more responsibility when social engineering leads customers to authorize fraudulent payments.
• Canadians reported more than $704 million in fraud losses in 2025, while complaint volumes at OBSI rose sharply.
• Proposed federal reporting rules could expose how banks handle fraud, reimbursement, payment authorization, and transaction delays.

Canadians who lose money through impersonation scams and manipulated payments are intensifying pressure on Ottawa to make banks shoulder more of the financial burden. The push targets a difficult category of fraud: transactions technically authorized by customers who were deceived into sending the money.

That distinction shapes how banks investigate claims. When criminals take over an account or process an unauthorized payment, existing protections may offer a clearer path to reimbursement. Cases involving social engineering are messier because the customer completed the transfer, disclosed information, or followed instructions from someone posing as a bank employee, government official, relative, or business contact.

Victims argue that this approach puts too much responsibility on individuals while underestimating what banks can see across their payment systems. Financial institutions monitor transaction size, destination, timing, device information, account history, and other risk signals. Customers generally see only the story presented by the scammer.

And the losses are climbing. Canadians reported more than $704 million in fraud losses in 2025, according to Canadian Anti-Fraud Centre figures cited by Finance Canada. Reported losses since 2022 exceeded $2.4 billion, although authorities estimate that only 5% to 10% of fraud is reported.

The payment channels involved are central to the policy debate. Government figures show that reported 2024 losses included $154 million sent through wire transfers and $36.7 million through Interac e-Transfers. These systems move money quickly, which is useful for legitimate commerce but leaves a narrow window for stopping or recovering fraudulent transfers.

Faster payments have changed the economics of intervention. A warning delivered after a transfer is completed may do little for a victim, even if it satisfies a bank’s disclosure obligations. That raises a practical question for TD Bank and other financial institutions: when should a suspicious payment be paused rather than merely accompanied by an alert?

Complaint data suggest consumers are increasingly dissatisfied with the answer. The Ombudsman for Banking Services and Investments said fraud was the leading issue in its 2025 banking complaints, accounting for roughly one-third of cases. Its fraud investigations nearly doubled to 1,815 from 966 in 2024 (source).

OBSI received more than 26,000 consumer inquiries and opened over 6,100 investigations in 2025. Those totals were up nearly 60% and 90%, respectively, from the previous year. More than 1,300 complaints concluded with approximately $5.8 million in compensation.

Still, OBSI’s recommendations are non-binding, and its maximum recommended compensation is $350,000. Consumers can therefore navigate a lengthy complaint process without certainty that a recommendation will resolve the dispute. For banks, meanwhile, inconsistent outcomes can complicate risk modeling, complaint operations, and investment decisions around fraud controls.

Ottawa’s developing response includes proposed changes under Canada’s Financial Consumer Protection Framework. The measures published in the Canada Gazette would require banks to report data covering fraud, reimbursements, authorization, and suspected transaction delays. Better reporting would not itself establish a reimbursement right, but it could give regulators a more consistent view of where losses occur and how institutions respond.

The industry is urging policymakers to take a broader approach. In its response to consultations on a national anti-fraud strategy, the Canadian Bankers Association emphasized consumer education and coordinated action across sectors. Banks have a point that telecom providers, digital platforms, cryptocurrency services, law enforcement, and customers all influence fraud outcomes. Liability rules focused on one participant could create blind spots.

That said, consumer advocates see stronger bank liability as an incentive question. If financial institutions absorb more losses, they may have greater reason to refine behavioral analytics, introduce targeted payment delays, improve recipient verification, and escalate unusual transfers for human review. Poorly designed controls could also block legitimate transactions or add friction for businesses moving time-sensitive funds.

The policy challenge is to distinguish reasonable customer behavior from serious negligence while recognizing that sophisticated scams are engineered to defeat ordinary judgment. Clearer reimbursement standards, transparent reporting, and stronger intervention controls could shift fraud management from a case-by-case dispute process toward measurable prevention. For Canadian banks, that would turn scam losses from primarily a customer-service issue into a more visible operational and regulatory risk.