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Scotiabank iPhone App Bug Causes Loss Of Interac Money Transfers?

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Update 1: Scotiabank Media Communications contacted us with the following:

Scotiabank manages all transactions for our iPhone services and the information is not shared with any third party.  At Scotiabank we take the security and privacy of customer information very seriously.  Our mobile banking service is protected by the highest security standards that allow us to offer a mobile security guarantee.

Last year, Scotiabank released an iPhone app that allowed users to access their Scotiabank accounts and manage various activities through their iPhone or iPod touch. The app is great and very convenient, and I have been using it since its release, but mostly just to see my balances.

Well, if you have the app and are using it for monetary transactions, you may want to think twice. Online finance already has its concerns and this next story will just add to those worries.

Money Transfer Gone Bad

In October 2010, the Scotiabank app was updated to allow users to do money transfers through the app. Well, a user of the Scotiabank app recently had his interac money transfer lost while using the app to conduct a money transfer! The user sent a $700 money transfer via the app and then learned that the $700 never arrived to the intended recipient!

Furthermore, the money transfer transaction did not even show up on the official Scotiabank website, yet the funds were clearly deducted as per the overall balance. In other words, it is as if the transfer never took place and the $700 mysteriously vanished!

Third Party Company?

As expected, the user contacted the Scotiabank call center and while speaking to a “senior CSR” was told that it will take three business days to have the funds returned. Disturbingly, the reason for the delay was attributed to the Scotiabank app being managed and developed by a third party company and not Scotiabank themselves!

In an attempt to expedite the process, the user was offered $700 from Scotiabank’s “emergency funds replacement program”, but these funds could only be used for 24 hours at which point they would be deducted. This would still leave the user having to wait at least two more days to get the original $700 back, if at all!

Thinking Twice

Up to this point, I have not heard of any major negative experiences with finance-based iOS apps but this story terrifies me, especially since I use the Scotiabank app. However, what really disturbs me is the idea that a third party controls the app!

If it is true that the Scotiabank app is in fact managed and developed by a third party, that raises some serious security concerns, as some random third party company has full access to transfers, transactions, and accounts. Even worse, transfers seem to be out-of-sync with Scotiabank’s own systems!

While you should always be careful when conducting financial transactions online, this story has made me think twice about using services or apps that are not directly managed or controlled by the official parent company.

[iPhone World]

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  • A 3rd party developer that will have access to all your online banking info?! Nice…

  • roadcarver

    What about the other bank apps such as ING Direct and CIBC?

  • Dee

    I use it all the time, and have sent MANY email transfers and have yet to have an issue. Not sure what happened here. As for the third party, I’m sure most mobile banking apps do this. At least if anything goes wrong, Scotiabank will still be held accountable.

  • I don’t see this as a problem as you have to deal with 3rd party vendors when you use your debit or credit card at vendors. If you bank at Scotiabank, shop at Shoppers Drug Mart, Moxies, Walmart, etc. they all use different systems so that 3rd party also has your data. I would expect that any financial institution that does have a 3rd party processor has some type of privacy agreement in place.

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  • Earn FREE yes 1931$ Per week Proven way, its true i earned from here http://bit.ly/earnfreezh

    I earned 1893$ this week and i have been paid for last week earnings of 1931$ and i am happy about
    i am Kathy i am housewife staying in house now i can buy anything i need with the amount i earn by spending few hours a week which is really a blessing to me and my family

    if you are facing financial struggles and want financial freedom like me then its for you. best of luck.

  • Earn FREE yes 1931$ Per week Proven way, its true i earned from here http://bit.ly/earnfreezh

    I earned 1893$ this week and i have been paid for last week earnings of 1931$ and i am happy about
    i am Kathy i am housewife staying in house now i can buy anything i need with the amount i earn by spending few hours a week which is really a blessing to me and my family

    if you are facing financial struggles and want financial freedom like me then its for you. best of luck.

  • Gary_is_dumb

    Way to be hysterical…. how would they have access to all of your data? All they do is route the transfer…. This happens daily every time you use your debit card as Interact is technically a third party as no one bank owns it. The ignorance on this blog kills me sometimes, its why I love reading it. Always get a laugh or two.

  • Anonymous

    Can it be that they are talking about Interac email money transfer being a service of a third party?When you send an Interac email money transfer, your funds are transferred to the company (certapay) then they transfer the funds to the recipient. The most common reason that transfers do not go through is that the recipient’s spam filter has deleted the email. Gmail is notorious for this. I use the service often and had to put in a custom filter to prevent Gmail from moving the email to spam. If there is a problem with a transfer then the bank has to request the funds back from Certapay.

  • hank

    If a person is scared about the idea of having a 3rd party, then he or she should shy away from going online. As a medium, an iPhone for example. Almost everything relies on a third party. Companies leave it to the experts of the subject matter. To the SMEs. There’s a disclosure agreement that is bound to be respected. Trust humanity and you’ll be fine. Even Apple does that. Look under your iPhone’s Settings > General > Legal. Tons of third parties. So do not be scared about third parties. It is a fact of life and that we all have been benefiting from it for the longest time.

  • Gary_is_dumb

    Finally an intelligent reply. Guess what Gary, Apple did not make your precious iPhone. A third party did *GASP*

  • Anonymous

    ING Direct’s app is made by them. I know for a fact 😉
    But it is pretty much just their own online mobile site anyways that the app is using. So everything is secure and handled by them only

  • Rs

    There are non-sensitive data (e.g. Gmail — and yes, public email services are generally considered non-sensitive so don’t argue) and then there are, of course, sensitive data. Financial data is in the latter. With that said, information should not be stored, viewable or accessed by 3rd parties whatsoever. You can use a 3rd party application, service or product but all data should be encrypted on the “wire.” If sensitive data are not handle with such due diligence, then the IT professionals/SMEs/organizations need to be held accountable (even before something goes wrong). If you cannot deliver a solution done the right way, then don’t do it.

  • I never touch online bankIng, or even on the phone for that matter. Deal with face to face only when it comes to privet matters such as banks and ect. If the forces taught me anything is that everything is a lie until you see it with your own eyes 😛 lol

  • Tenoarman

    Stuff happens over regular email xfer so it’s not just via the iPhone. SB should sync properly though so I’ll be keeping an eye. Considering the amount of time it took for the app to be developed; properly, not just giving addresses to SB’s in one’s area, it should be close to perfect. :o)

  • Fc97accord

    This happened to my except I was trying to pay a bill and it never deducted or paid the bill.
    I just deleted the app, this is very bad and I might even not use this bank anymore!!

  • Anonymous

    Old skooler… 😛

  • Lol yes I am. But also the most secure ^_~

  • Guymgiannini

    This is an inappropriate post. To comment on one transaction before allowing due process to proceed is not good behaviour. Any number of problems could have occurred to cause a problem and the funds remain guaranteed throughout. Best to let the appropriate channels deal with it first. If several incidences occur and no action is ever taken then you are free to provide a warning. Please show responsibility with personal and corporate reputations. Yours is now damaged as a result of this effort.

  • Desigual10

    The more I think about this, the more I realize that this article is extremely irresponsible. It appears to me that the individual that experienced the problem doesn’t have their facts right, and for this site to take the persons statements as facts, without any due diligence, is irresponsible. It’s good to know that this site is looking out for ‘us’, iPhone users, but please do your homework before you post alarmist articles based on someone’s assumptions. Fear mongering isn’t good for anyone.

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