TD Bank must pay Montrealer $76K after closing his accounts with no explanation

Hossein Pourshafiey spent six years trying to find out why TD Bank suddenly closed all his accounts and froze his line of credit in 2012, leaving him $760,000 in debt and unable to run his business.

"It's like being hit by the sledgehammer. It was not easy," the Montreal businessman told As It Happens guest host Piya Chattopadhyay. 

"They put me out of business and they destroy my life," he said.

Pourshafiey won his lawsuit against the bank this month. A Quebec Superior Court ordered TD Bank to pay him $49,000 in damages — representing the loss of three months' income, as well as the "inconvenience and stress" it caused him — and $27,000 to cover his legal fees.

However, the Court also noted that bank was not "solely responsible" for Pourshafiey losing his business, citing Canadian economic sanctions against Iran at the time, as well a poor economic climate in the country.

"Naturally we are disappointed with the outcome and are currently reviewing our legal options," a TD Bank spokesperson told As It Happens in an email. 

Sanctions against Iran 

When his troubles began, Pourshafiey had been running a currency exchange company called Moneywise Financial for 14 years.

He is well-connected within Montreal's Iranian community and said people often used the service to wire money between family members in Canada and Iran. 

In February of 2012 — with those strict sanctions in place — Pourshafiey said he started hearing from friends and colleagues that their bank accounts had been frozen with no explanation.

"I'd been defending the bank and saying that you might have been wrongfully informed in something, and the bank will not just close the account just like that without giving any reason — until I received the letter from the bank myself," he said.

The Oct. 1, 2012, letter informed him TD would shutter his business and personal accounts in 30 days and close his mortgage and line of credit in two months.

He suddenly found himself owing the bank $767,049.38.

"And there was no reason whatsoever," he said.

'Turned his life upside down'

Pourshafiey said he called the bank, but couldn't reach anyone. He visited his local branch, but the bank manager was as baffled as he was.

"This situation was going on and on and there was no clear answer why they closed my account," he said.

Finally, he sued.

It wasn't until the second last day of the trial that the bank finally offered an explanation.

A TD official testified that Moneywise Financial "appeared to have transferred money in violation of Canada's economic sanctions against Iran."

Pourshafiey said he was aware of the sanctions and never violated them. 

Judge Gregory Moore wrote in his July 20 decision that the sanctions were a "reasonable justification" for TD to  terminate its relationship with Pourshafiey, but that it failed in its duty to properly inform him. 

"TD Bank acted in its own interest, without considering the effect on Mr. Pourshafiey's business and his life," Moore said. 

"Had Mr. Pourshafiey not sued, he would never have learned why TD Bank turned his life upside down."

Still seeking bank accounts

Pourshafiey said he welcomes the ruling, but he still just wants his bank accounts back.

"When I came to Canada in 1972, I came with the hope and the resolution. I had the hope that I was coming to the country that I would not be discriminated against. And I had the resolution to succeed — and I did in my life and my businesses.

"I raised five educated kids and I was successful in my business. I was doing my due diligence according to the law," he said.

"I had hope always when I started, when I came to Canada, it's a country of the law. When you do things right according to the book, always the law is behind you."

Despite the six-year-long legal battle, Pourshafiey said he'll still bank with TD. 

"[Forgiveness] is what the society needs today, with the whole hardship around the world. That's what we need."

Written by Sheena Goodyear. Produced by Nathan Swinn.