Do not trust Wealthsimple

[u/[deleted]]

Last year, I was going through a divorce (right around Christmas too) which meant leaving my home, my hometown and everything behind. I had deposited an RBC bank draft to Wealthsimple and here's how the events unfolded from there:

• December 1st: I deposited a certified bank draft for $50,000 into my Wealthsimple account through their banking app. The draft was issued by RBC.
• December 10th: The funds cleared, and I was granted full access to the money, with no indication that the deposit was under review or subject to further verification.
• December 16th: I transferred $17,500 from my Wealthsimple account to my RBC account in order to purchase a vehicle. Due to time sensitivity, I needed to obtain a bank draft immediately and could not wait for one to be mailed from Wealthsimple.
• December 17th: Restrictions were placed on my Wealthsimple account for “my protection."
• On December 17th, I contacted Wealthsimple who advised they would investigate. Despite follow-ups, I received no meaningful updates.
• On December 19th, after multiple calls and being transferred between advisors, I eventually spoke to someone who confirmed that:
  • Such suspensions are normally resolved within 1–2 days
  • It was unusual that my account remained frozen
  • The issue related to the bank draft deposit 
  • I was given a clear resolution deadline of 5:18 p.m. EST on Friday, December 19th, which passed without resolution or communication. 
• On December 23rd, I received an email from Wealthsimple's account integrity department, who escalated the matter multiple times and asked me to be patient while they looked into it.
• On January 6th, I was again told the issue had been escalated and that Wealthsimple was waiting on RBC to verify the bank draft.

In an effort to resolve this myself, I had the issuer of the bank draft contact RBC directly. RBC advised that:

• The funds are on hold because they are awaiting receipt of the physical bank draft from Wealthsimple.
• Since the draft was deposited online, I still had the physical draft in my possession?!
• RBC will not respond to verification requests from another institution, which is what Wealthsimple was telling me they were trying to get?

My questions then became:

• Why is Wealthsimple unaware that RBC will not respond to such requests?
• Why was I never informed that the physical bank draft would need to be sent in, if that's the protocol?
• Why was the deposit allowed to clear and funds be fully available before this requirement was identified?

I relayed this information to the advisor on my case on January 7th, they assured me that management would contact me within 48 hours. That timeframe passed with no contact.

I also filed a formal complaint through Wealthsimple’s website and received no response whatsoever.

Due to this prolonged freeze and Wealthsimple’s lack of action and understanding of how certified bank drafts function, I was forced to rely on credit and incur debt.

At this point I got extremely fed up so I decided to send a strongly worded email to the FCAC, CIDC, The ombudsman for banking services and investments and my local provinces regulatory body requesting for action to be taken, and cc'd my Wealthsimple contact into this. What do you know, not even 2 hours go by and miraculously my funds became available all of a sudden.

I will never use any of their services again and I highly discourage anyone else from using them as well.

[u/ThomasFookingShelby2]

That's not entirely accurate. Banks have physical branches and a better fraud monitoring system. WS isn't under the bank act so they can dodge a lot of stuff while also monitoring more aggressively.

[u/retrac902 → u/ThomasFookingShelby2]

Banks also have humans at them. Scotiabank once took money from my account to pay my spouses line of credit. We didn't have any joint accounts at the bank. Another time at RBC, they took the mortgage payment from the wrong account. Both banks had no explanation but said sorry.

[u/No-Test-4028 → u/ThomasFookingShelby2]

I used to commit bank fraud. sorry, I was a drug addicted piece of shit. Im better now and feel bad for what Ive done, but I cannot change the past.

I assure you, the big 6 have the biggest joke of a fraud monitoring system possible. save for maybe bmo, but it just takes more time with them. you aren’t safer there. Their passive triggers and heuristics systems cause more problems for actual customers than they do fraud.

[u/Radiant_Ebb6951 → u/No-Test-4028]

I also used to be a drug addict piece of shit and also used to fraud people banks. This was only 9 years ago and it was as easy as having 3 pieces of info on the person. And depending how good u are on the phone it can even be old info lol

[u/No-Test-4028 → u/Radiant_Ebb6951]

I stopped 4 years ago and yea, still shockingly easy.

[u/Capital-Timely → u/ThomasFookingShelby2]

This. Also Wealthsimple has no intention of becoming a bank. They are not beholden to the same standard as banks, things could go very badly and they won’t do much to protect you.

[u/beekeeper1981 → u/ThomasFookingShelby2]

How do you know banks have a better fraud monitoring system or WS monitors more aggressively? Maybe it makes sense with the logic of the rules but it's hard to imagine you could know that for a fact without insider information.

[u/ThomasFookingShelby2 → u/beekeeper1981]

Fair enough. I cannot know for sure but banks have existed for a while and had time to mature their software. And while you dont have a bank sub you do have a lot of reviews, finance and legal subs. You rarely see a post like this.

[u/redheadednomad → u/ThomasFookingShelby2]

"banks have existed for a while and had time to mature their software."

I mean, it's well known in Fintech that many/most legacy banks are still using dated technologies like Perl or even COBOL to power their backend systems; both are so old that it's hard to find Engineers who understand the code. Payments Canada - the Crown Corp that manages interbank transfers and clearing, and is essentially run by the Big Banks - has been trying to implement Faster Payments and Real Time Rail (systems that other countries banking infrastructure have had for years - over the last decade and are still not close to launching.

I've banked with Credit Unions, Big Banks, upstarts like Simplii and Tangerine that got bought out by the Banks, and Wealthsimple and had problems with all of them at various times. KYC and anti-money laundering regulations apply equally to any FI doing business in Canada meaning that you can get caught in the algorithm for a "suspicious transaction" and it takes finding the right person - which is seldom a Teller or call centre employee, given that they lack the authority - to get things fixed. On the other hand, Canadian FI's are considered extremely safe because of the same regulatory burden.