Canadian Viola Society has bank account emptied by fraud artist

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The Canadian Viola Society, an Ottawa-based group of viola enthusiasts, has been victimized by a fraud artist who emptied the society’s bank account of $16,000 through a series of unauthorized e-transfers.

The non-profit group now has only $300 left in its Bank of Montreal account, said Ann Frederking, the society’s longtime volunteer treasurer of more than 30 years.

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“I feel violated, for sure, and I feel responsible because it’s just me doing this job,” said Frederking, a violist, music teacher, and retired member of the Ottawa Symphony Orchestra.

Frederking said the theft has all but halted the activities of the society, which is now considering the launch of a GoFundMe campaign to rebuild its finances since BMO has refused her requests to refund its losses.

“It means we can’t pay anybody to do anything for us,” said Frederking. “We’d like our money back.”

All of the money in the account, she said, came from membership fees. The society charges $50 for a regular membership.

Frederking said she recognized something was amiss on Nov. 20 when she discovered two e-transfers had been sent from the society’s account four days earlier: one for $5,000 and another for $3,000.

The recipients were not known to Frederking.

She went to the bank, which issued her a new card and PIN code, and launched an investigation into the disputed transfers.

BMO’s investigation concluded that the money was transferred using the correct bank card number and password, and that the transactions had been initiated using a device Frederking had previously used to access the bank’s online services.

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“If you did not authorize the transaction,” BMO told Frederking, “either this information was not protected from the person who entered it, or your device was compromised.”

As a result, BMO said, it would not compensate Frederking for the losses.

Frederking insists she is well aware of phishing scams, and did not share the society’s banking information with anyone. Her computer was scanned for malware and given a clean bill of health.

Frederking appealed the bank’s decision not to reimburse the society, and with the case still unresolved, a second tranche of money was stolen from the society’s bank account. In early March, $8,000 was sent by e-transfer without Frederking’s authorization to a stranger named Rose Anyango.

That money, she said, was stolen even though the society’s account had a new bank card and a new password, neither of which she had used online.

“They weren’t entered or stored on my computer and I hadn’t told anyone the numbers,” Frederking insisted. “I have the only bank card. The other signing officer for our society doesn’t have a card.”

The transfers of such large sums, she added, were completely out of keeping with the society’s past banking practises. The society collects membership dues through e-transfers, she said, but uses cheques to pay its bills and other obligations.

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Frederking said the last time the society sent an e-transfer was in June 2020, when it used the electronic method to send $40 during the pandemic.

“We hold BMO entirely responsible for not immediately alerting us to unusual activity on our account,” she said.

After the first $8,000 was transferred out of the society’s account, Frederking added, she went to BMO and asked to restrict the size of e-transfers that could be made from the account. The bank told her it was not possible unless the society gave up its online banking.

After another $8,000 was taken from the account, BMO said it could limit e-transfers, she said.

BMO advertises a “100 per cent electronic banking guarantee” that promises to reimburse customers for any losses to personal bank accounts from unauthorized online or mobile banking transactions.

But the guarantee is subject to several conditions, including that customers store their passwords and debit cards separately, and never knowingly disclose their passwords or debit card numbers.

BMO’s electronic banking services agreement warns customers: “You are responsible for the full amount of all authorized activity resulting from the use of your account or secret ID code by any person. Careless handling of your card or mobile device that you registered with us for electronic banking services, or secret ID code can result in serious financial losses.”

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BMO spokesman Jeff Roman said he can’t comment on the specifics of the Frederking case, but he said customers can request changes to limits on e-transfers and global money transfers by visiting their branch or contacting their account manager.

Roman did not respond to a question about whether the bank determines if accounts involved in fraud allegations were the subject of a 2017-2018 data breach at BMO. That breach affected 113,000 accounts.

The viola society offers online master classes and puts on speakers’ events.

The viola, Frederking said, has a lower, more mellow sound than the violin, and tends to play a supporting role in orchestral music.

“I think you’ll also find that carries over to personality types,” she said. “You’ll find that violists are the core of the volunteer system in most amateur orchestras…We’re the glue that holds the orchestra together.”

The Canadian Ombudsman for Banking Services and Investments has reported that fraud complaints drove a 63 per cent in case volume last year. Earlier this month, this newspaper reported on two cases similar to Frederking’s: In both cases, fraudsters illegally accessed their BMO accounts and sent money overseas using global money transfers (GMTs).

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