TD denied her fraud claim twice after a phone scam drained $4,650 — here's what every Canadian needs to know

When he returned, the caller referenced details of a recent cheque she had deposited. He then told her he would send a text message and asked her to reply “yes” to confirm that she had not authorized the fraudulent transaction, which the caller said was tied to Montréal, a place Taron has no connection to.

Within a day, $4,650 had been withdrawn from her account.

How does this scam actually work?

At the centre of this type of fraud is the misuse of legitimate security tools.

In Taron’s case, the text message she received was a one-time passcode (OTP), a common feature banks use to verify identity or authorize activity. The caller framed it as part of a fraud check, asking her to respond in order to confirm that she had not made the transaction.

Scams like this are designed to feel routine. By combining familiar cues, like a recognized phone number, real account details and standard verification steps, they can closely resemble legitimate fraud checks, even for people who are actively trying to be cautious.

Because the interaction follows the same structure as a real fraud call, including verification steps and scripted language, it can be difficult to distinguish in the moment. Scammers often keep the person on the line while this happens, creating tension, and giving the impression that the issue is being handled in real time.

What did her bank say — and why does that matter for your money?

Taron ended the call while on hold after becoming suspicious, and contacted her bank directly. She was told her account had been breached and her debit card would be cancelled.

“By the time I contacted my bank, they were able to withdraw 93 dollars 26 times in a row. And this is without my account number, or my pin number,” shared Taron.

Over a short period, a large volume of withdrawals — about $93 at a time — drained roughly $2,500 from her account. In addition to that, the scammers were able to use mobile deposit features to repeatedly deposit the same $100 cheque, made out to a “Roy Scott,” then withdraw funds before the deposits were reversed.

This process was repeated 21 times.

In total, the scam resulted in a loss of $4,650, including a negative balance once the cheques bounced.

Taron reported the fraud soon after the call and filed a claim with her bank. In a letter dated March 2, Taron was informed by her bank that her claim had been denied.

The bank determined that the transactions had been authorized, citing its policies around protecting account information. That distinction matters: when activity is treated as authorized, reimbursement is not guaranteed, even if access was obtained through deception.

Taron has also had a second claim denied by TD, which has prompted her to take legal action.

Why didn’t the bank catch this scam?

The pattern and speed of the transactions raise serious questions about how fraud is detected in real time.

In Taron’s case, multiple withdrawals were made in quick succession, alongside repeated deposits of the same cheque. Despite the volume and repetition, the activity was not stopped before the account was drained.

Financial institutions use automated systems to detect unusual behaviour, but those systems often rely on identifying activity that falls outside expected patterns. When transactions are processed using valid credentials or verification steps, they won’t necessarily trigger immediate intervention.

In this case, the use of an OTP meant the activity appeared to be authorized within the bank’s systems, even though it was initiated through deception (scammer directing Taron to approve the OTP).

The cheque deposits followed a similar pattern. Under Canadian banking rules (1), a portion of a cheque deposit is often made available right away. That window can be exploited if funds are withdrawn before the cheque is returned unpaid, particularly when the same cheque is deposited repeatedly.

What should you do if this happens to you?

If you receive a call from someone claiming to be from your bank, the safest step is to end the call and contact the bank directly using the number on your card or official website.

If you suspect fraud has already occurred:

• Contact your bank immediately
• Ask for your account and cards to be secured or frozen
• Document the timing and details of what happened
• File a formal fraud claim as soon as possible

Acting quickly can help limit further losses, particularly if transactions are still in progress.

What can Canadians do right now to protect themselves?

One consistent feature of these scams is the use of OTPs or verification messages.