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RBC customer loses $10,000 after falling victim to bank draft fraud

Click to play video: 'Consumer Matters: Marketplace seller checked with bank but still out $10K'
Consumer Matters: Marketplace seller checked with bank but still out $10K
WATCH: Vancouver resident Mark Milburn has used bank drafts in the past as a safe guaranteed form of payment but says he'll be wary of using them in the future after falling victim to fraud. Consumer Matters reporter Anne Drewa has more. – Jan 30, 2024

Mark Milburn has used bank drafts in the past as a safe guaranteed form of payment but says he’ll be wary of using them in the future after falling victim to fraud.

“How is any business going to be able to trust a bank draft anymore,” said Milburn.

Back in early January, the Vancouver resident was selling a $10,000 luxury watch on Facebook Marketplace. He says he’s used the social media platform multiple times without issue. “It’s always worked. I’ve always found a good buyer and I’ve never been concerned,” he said.

Milburn says an interested buyer contacted him on the social media platform and agreed to purchase the watch.

“She had offered to meet at the police station or at the issuing bank and wanted to use a bank draft,” said Milburn.

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Both the buyer and Milburn agreed to complete the sale outside his home. The buyer Milburn says was sending her fiancé to pick up the watch on her behalf. On the day of the sale, Milburn says a man showed up at his residence and handed him a bank draft.

“It was perfect. I have dealt with bank drafts and this was flawless,” said Milburn.

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However, to be certain and before he sold the watch, Milburn says he went in person to RBC where he’s a customer asking the teller to check the authenticity of the bank draft. Milburn says the RBC teller assured him the draft was valid.

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“She says ya everything about this looks good,” said Milburn.

Milburn says the teller then asked if he would like the funds to be cleared.

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“I hadn’t asked for it. She offered. I said sure that’s great. She then takes it (the draft) and talks to the manager. The manager clears the funds in that moment no questions asked,” said Milburn.

Milburn says he then handed the watch to the buyer. Four days later, Milburn made a shocking discovery in his personal RBC bank account.

It showed he was owing $10,000.

“No one called me, emailed me, phoned me, or nothing. It just said item returned unpaid,” said Milburn.

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Immediately, Milburn says he returned in person to the same RBC branch, but says he got few answers. He says RBC staff directed him to cross the street to TD, the financial institution that issued the bank draft. When the TD manager checked the draft, Mark said he was told it was a fake.

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“The thing that’s crazy which she explained to me is that this bank draft existed. So this number correlates to something at some point in time,” said Milburn.

RBC would not share specifics with Consumer Matters about Milburn’s case, but in an email stated in part:

“…we remind clients to take precautions whenever receiving funds to ensure they are dealing with a legitimate source and are comfortable with the form of payment they are accepting.”

TD would not answer questions related to the bank draft and how the draft number ended up in circulation, but stated in part:

“Bank drafts are validated once they’re deposited and processed by the negotiating institution – and can be returned if found to be counterfeit. If accepting a bank draft as payment, it’s advisable to wait until the draft has cleared and the money has been confirmed before completing a sale.”

Cybersecurity expert Claudiu Popa said the banking sector in Canada has a culture of not sharing information.

“I think there’s been no communication to the public about bank draft fraud and unfortunately that goes for other types of fraud that people just assume is inherently secure,” said Popa who is co-founder of the non-profit KnowledgeFlow Cybersecurity Foundation.

Vancouver police have told Consumer Matters the file related to Milburn’s case remains open, but no arrests have been made.

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Milburn says he remains on the hook for $10,000.

He says he continues to have little help from RBC about his case.

“I completely feel that they let us down.”

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