The Privacy Commissioner recently released her finding following a complaint brought by a bank employee about the bank directly withdrawing funds from the employee’s bank account. (Commissioner's Findings - PIPEDA Case Summary #327: Bank retrieves overpayment of wages from employee's account (February 2, 2006))

In this case, the Complainant had been receiving benefits under the bank’s disability policy. She had been receiving payments for several weeks when it was determined that she was not eligible for the benefits. The bank determined that it was necessary to stop the next payment but it was too late as the amounts had already been deposited in the employee’s account. The bank then placed a hold on the funds and subsequently withdrew them directly from the employee’s account.

The individual complained to the Office of the Privacy Commissioner and reference was made, either by the Complainant or by the bank, to Section 254.1(2)(d) of the Canada Labour Code which allows an employer to make deductions from wages for “overpayment of wages by the employer.” It was the bank’s argument that it was entitled to take the funds from the account based on this particular provision.

The Privacy Commissioner of Canada considered the complaint and the provisions of the Canada Labour Code, including that the bank might have been entitled to deduct such amounts from wages before they are paid it and the Personal Information Protection and Electronic Documents Act do not allow the bank to unilaterally retrieve a sum of money from her account. The Commissioner concluded “the bank had misused the Complainant’s personal information when it took advantage of its dual role as her employer and bank and retrieved money from her account, without her knowledge or consent, thereby breaching Principle 4.3”.

The Complaint was found to be “well founded and resolved” and the bank has committed to change its procedure for recovering funds due from the accounts of bank employees.

Labels: pipeda findings, privacy, public sector, workplace