Bank teller writes account number on cheque

PIPEDA Case Summary #2001-9

[Section 5(3)]

Complaint

An individual complained that a bank had created the potential for an improper disclosure of his personal information to a third-party without his consent when a teller wrote his account number on the back of a cheque when cashing it.

Summary of Investigation

The complainant had gone to a branch of his bank to cash a personal cheque from a third party. The bank teller wrote the complainant's account number on the back of the cheque. The complainant's concern was that, if the cheque was for any reason returned to the third party who had written it, the account number would be disclosed to that person.

The bank argued that, in cashing cheques, banks are in effect extending credit until such time as the cheque's value can be debited from the cheque-writer's account. In cases of exception (e.g., fraud or insufficient funds), banks require an efficient means of recovering the cheque value from the customer who presented the cheque. Moreover, names written on the front of cheques are not an efficient enough means, in that they may vary significantly from the exact names in which customers' bank accounts are registered. This bank's position was that recording account numbers on cheques is a longstanding industry-wide practice, necessary for protecting a bank's interests in ensuring that it can collect its money from either the cheque-writer or the person who deposits or cashes the cheque.

Commissioner's Findings

Issued August 14, 2001

Jurisdiction: As of January 1, 2001, the Personal Information Protection and Electronic Documents Act applies to federal works, undertakings, or businesses. The Commissioner had jurisdiction in this case because banks are federal works, undertakings, or businesses as defined in the Act.

Application: Section 5(3) states that an organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.

The Commissioner determined that the bank's recording of the account number at the time a cheque is presented is a reasonable practice and that it is reasonable for a customer to expect such practice. The Commissioner was satisfied that the complainant had thus given implied consent to the collection, use, and disclosure of his personal information. The Commissioner found that no contravention of the Act had been established.

The Commissioner concluded therefore that the complaint was not well-founded.

Further Considerations

In presenting his findings, the Commissioner commented as follows: "Upon presenting the cheque for negotiation, the [bank's] customer is giving implied consent for the disclosure of the personal information on the back, just as the drawee is providing express consent to disclosure of their personal information (on the front of the cheque) to the payee."