A Winnipeg resident is cautioning the public about the risks of online banking after a credit union held her accountable for a debt exceeding $174,000 resulting from fraudulent transactions. Linda Klassen and her husband utilized their personal computer for online banking, but in May 2024, an unknown individual allegedly hacked into their laptop, gaining control over their computer and email account.
Fraudulent activities were conducted through their accounts at Access Credit Union and Steinbach Credit Union. Although another fraudulent attempt involving an investment account tied to a bank was unsuccessful, Klassen stated that one or more unidentified fraudsters initiated the fraudulent transactions between May 16 and May 27, 2024.
Klassen expressed the emotional toll of the incident, likening it to a violation of privacy comparable to a physical break-in. The fraudulent transactions began at Access Credit Union, where two counterfeit cheques of $50,000 each were remotely deposited into the Klassens’ account by a fraudster. The funds were subsequently transferred to unauthorized recipients.
While Access Credit Union covered the loss and did not hold the couple liable, four fraudulent cheques totaling $292,000 were deposited into the Klassens’ Steinbach Credit Union account through their online banking platform from May 22-24, 2024. The fraudster utilized the funds for unauthorized online bill payments, resulting in a substantial overdraft.
Although the credit union managed to recover over $117,000 through various means, including an insurance claim and tracing efforts, the Klassens’ account remained significantly overdrawn. Klassen proceeded to file a lawsuit against Steinbach Credit Union in July 2025, seeking restitution and additional damages.
In response, Steinbach Credit Union filed a statement of defense in August, disclaiming responsibility for the loss and urging the dismissal of Klassen’s lawsuit. The credit union argued that the situation could have been avoided if the Klassens had taken necessary precautions promptly after the initial fraud incident with Access Credit Union.
Despite the ongoing legal proceedings, Steinbach Credit Union emphasized its commitment to investigating fraud cases thoroughly and recovering losses whenever possible. The institution also stressed the importance of promptly reporting suspected account compromises to the financial institution.
As per Statistics Canada, a significant percentage of Canadians engage in online banking, with reported cases of compromised accounts decreasing in recent years. The most common vulnerabilities leading to such incidents include password reuse, weak passwords, lack of multi-factor authentication, and falling for phishing scams.
In light of this incident, a research initiative at the University of Manitoba aims to enhance older adults’ online banking proficiency. Professor Celine Latulipe, overseeing the project, remains optimistic about the safety of online banking but emphasizes the need for financial institutions to implement robust security measures, including promptly freezing accounts in cases of suspected fraud.