Banks allowed to share private info for fraud investigation purposes, Autumn 2008
RBC determined it had been the victim in a series of fraudulent mortgage transactions that involved, among other persons, lawyer DM. DM had a mixed trust account with TD, and RBC made a request to TD to review a series of mortgage advances made by RBC into DM’s TD trust account. TD provided copies of relevant cheques to RBC, who then commenced an action against the various parties to the alleged fraud, including DM.
The defendants sought a Declaration that RBC had accessed the TD information in violation of their s. 8 Charter rights. In addition, they argued that the provisions of the Personal Information Protection and Electronic Documents Act (Canada) (PIPEDA) that purportedly allowed TD to share private information with RBC were inconsistent with s. 8 of the Charter.
The Court disagreed. It held that s. 8 of the Charter, which provides that everyone has the right to be secure against unreasonable search or seizure, was inapplicable as it does not apply to a private organization.
The Court then held that the intent behind the drafting of the relevant provisions of PIPEDA was not to grant insurance companies and banks a novel power to share information between themselves for the purposes of fraud detection and prevention. Instead, these provisions served to preserve the already-existing investigative powers of these organizations.
Royal Bank of Canada v.Welton, 2008 (ON S.C.).