Banking Security

While trying to log into my Banking Web site (from a PC), after I had successfully remembered my log-in ID and password, something different happened. The site put up a Pop-up window saying it was testing security and wanted to send me a code to my Cell phone (or call me with the code).

After my initial confusion and then annoyance, I was heartened to see this kind of security come up. Banking security is very important, and the edge of the network (i.e. users logging in) are where the system is usually the weakest. The Desjardins Data breach is a good example of the need for banking security and data security.

Good Test ?

My hope is that this is simply a test, and you will see why.

After I realized I did not have my Cell phone handy, I simply cancelled out of the Security Message screen, which then took me back to the regular bank log-in screen. I thought for a second, and decided to see what would happen if I tried to log-in again. What I saw underwhelmed me. I was able to log-in, no problem, and no “challenge”.

My sincere hope is this is simply a test by my bank, because if I have been “challenged” for an alternate log in, I should not be allowed to log in after an initial failure. The application should continue to challenge me, until I pass the challenge, or until I fail a set number of times. Once someone fails I would hope my account access would be locked.

Banking Security ?

My hope is this is my bank attempting to test out new security for authentication (without enabling 2 factor authentication), and when they do a full roll-out, the rules will be stricter. I like the concept, but if this is how it will work it isn’t a great data protection system.

More Banking Security Resources

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CRA Quick Response

Careful What You Wish For From the CRA

I was delighted to see a response on my re-assessment, so quickly after I had called asking for status. After logging in to look at “My Account” I was a little concerned when I saw my account balance continued to be $0 (zero dollars).

Going into the Email section, I found out that I had made a bad assumption, and it was going to cost me more time. I had sent my support documentation for my claim that my son’s school fees were a medical expense in December. This package included letters from various professionals agreeing with this claim.

The package was sent on a Tuesday, however, on the Thursday afterward I received a package from the CRA. This package was all the supporting receipts for the same claim. I didn’t think much of it, but that was where I blundered.

This past Friday the CRA granted my claim for my son’s school fees as a medical expense. They pointed out, however, that since they didn’t have any receipts, they could not actually refund me any money.

After an obscenity filled few minutes, I calmed down, and realized how the sequence of events had worked against me.

What I Should Have Done?

I should have gone back on-line and submitted the receipts (again) to the CRA, with my supporting documents. The receipts have been sent again, however, I am back in the CRA queue, and I will need to follow up with them until they finally refund me my money (from 2017).

Guess I should have taken my own advice, that you can never send too much documentation to the CRA.

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Thinking like the Tax Folk

This week another chapter was written in my saga with my friends down at the CRA. Maybe I should just join the tax folks.

Previously you read about:

Earlier this week I received an envelope with all my receipts (from the 2018 pre-assessment) along with a letter stating the CRA allowed all of my claims in my 2018 return. I assumed this meant I would receive my complete tax refund, but I was also wary.

Tales from the CRA

The CRA thinks I owe them $4K so what was going to happen?

The CRA gave me my full refund for 2018 minus the $4K “owed” for the 2017 return. While annoying, I suppose it is nice to get some money back.

I now have the following quandaries:

  1. For 2018 claiming my son’s school fees as a medical expense has been allowed (so far). I have no aspersions that I may get another request for justification about this, but that remains to be seen.
  2. If the school fees are allowed for 2018, will they be allowed for 2017 given:
    1. This is the same school
    2. The same evidence was submitted to the CRA and OK’ed for tax year 2018
  3. If the school fees are allowed for tax year 2017, the CRA now owes me over $4K, which they have already have taken as payment from my 2018 refund.

What to Do Now?

Do I dare call the CRA and ask about this? Yes, I should. If I do not follow up the 2017 tax situation will continue to drag on. Yes, it may trigger a review of my 2018 return as well, but that is a risk I will deal with, if it transpires.

When you have a child on the Spectrum, and you have a non-standard tax return, life is never dull.

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They Paid My Loan Off

“They paid my loan off” is what a co-worker told me, when he purchased a new vehicle. I have given up telling my co-workers things about finance (they don’t listen much). I knew what that meant, but it took a while for him to figure out what that phrase meant.

What did the phrase mean?

  • Whoever has taken over the debt from the other loan will add this to the new loan (debt) for this new vehicle. What might this include:
    • Penalties for ending the loan (or lease} early
    • The balance still owing for the previous vehicle. The vehicle may not be worth as much as the balance owing
    • Administration fees for closing the loan (for the new firm)
    • Other fees
  • If the other loan was at a lower rate, you will be using the new rate of this new loan
  • The vehicle you are purchasing is most likely not worth the “new” value of this new loan, but that is your problem.

My co-worker did finally figure this out, once he got all the documentation, which explained all the details to him. He was less than impressed that his loan was now larger than the actual value of his new automobile.

negative equity
A Useful Graphic from GoAuto.ca

Strangely there was no mention of “Negative Equity”, which seems to be a phrase no longer used in the automobile sales world.

Negative Equity ?

Debts do not just “disappear” without someone paying them off (with very few exceptions). Remember that when buying large items.

Someone may have “paid my loan” but what does that really mean?

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What is the Home Buyers’ Plan? Should You Pay Down Sooner?

As most readers know my revulsion of Guest Posts, however, Sean Cooper is a friend of the site and has posted before.

Disclosure: This site (and I) have not been compensated for publishing this post. The opinions expressed are those of Mr. Cooper.


Buying a home is a major financial decision. If done right, it can be the single best investment of your lifetime. But the desire to purchase a home and actually buying one are two different things. Many of us would like to be homeowners, but what stops us is the down payment. Thankfully, the government will give you a little help. The RRSP Home Buyers’ Plan assists first-time homebuyers afford a home sooner.

Let’s take a look at what the Home Buyers’ Plan is and if it makes sense to pay it down sooner.

What is the Home Buyers’ Plan?

The Home Buyers’ Plan (HBP) is plan made by the government to make it easier for first-time homebuyers. Under the HBP, you can withdraw up to $35,000 from your RRSP to use for your down payment. (That’s $70,000 combined when you’re buying with another first-time homebuyer.)

The RRSP helps save up your down payment sooner because of the tax refund that you receive. Let’s go through an example to illustrate this. Let’s say your tax rate is 30% and you made a $10,000 RRSP contribution. In this instance you’d be eligible for a tax refund of $3,000 (30% X $10,000 = $3,000). That’s the equivalent of a 30% no risk return on your money. Not bad!

Also by borrowing under the HBP, you may be able to avoid paying CMHC fees thanks to your heftier down payment.

The HBP is a great program as long as you follow the rules. When you withdraw money from the HBP, you’re required to pay it back over 15 years starting in the second years since you borrowed the money. Any money you don’t pay back is included as taxable income and you lose the RRSP room forever. Ouch!

Some financial gurus are against using the HBP. They claim that you’re borrowing from your future self. While that may be true, if you’re buying in a city with high home prices like Toronto or Vancouver, the HBP may be the helping hand you need to get into the real estate market sooner rather than later. In these markets, it’s tough to turn down the guaranteed return you get with the HBP. Provided you use the HBP is a smart way and repay the money you borrow according the repayment schedule, it can be a wonderful program.

Should you Pay Down the Home Buyers’ Plan Sooner?

If you get a cash windfall, should you pay off the HBP sooner? It some cases it can make a lot of sense. As previously stated, you need to pay back any money borrowed from your RRSP from the HBP within 15 years. Using the example above, if you borrowed $10,000, you’d have to pay back $666.67 annually ($10,000 / 15 years = $666.67). But if you have the money, why not increase it to $750 annually? When you do this, you’d pay it back in only 13.33 years, almost 2 years sooner. After the HBP is fully repaid, any further money you contribute to your RRSP goes towards saving for retirement. This lets you take full advantage of the power of compound interest.

About the Author

Sean Cooper is the bestselling author of the book, Burn Your Mortgage: The Simple, Powerful Path to Financial Freedom for Canadians. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense. Connect with Sean on LinkedInTwitterFacebook and Instagram.

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