I’m a bit miffed: hundreds of people successfully signed up with Zag Bank this January to take advantage of a limited time high interest rate of 2.5% on a savings account but I am not one of them. Instead, my attempt to open an account with Zag Bank went very poorly and although each person I’ve spoken with has been very pleasant they were unable to resolve the problem and unable to explain what went wrong and how it was fixed.
Why Did I Want a Zag Bank High Interest Savings Account and Why Am I Not Too Interested Now?
I wanted to open an account at Zag Bank because they had a promotional interest rate of 2.5% from January to May 31 2016. I have some large short-term savings for a home reno and hoped to make more than the current 0.8% offered by Tangerine and PC Financial.
Since then, EQ Bank launched offering an interest rate of 3% on a daily interest savings account. Although I started after I applied to open an account at Zag, my EQ Bank account is already open, I’ve tested transfers in and out of the account, and I’ve parked my cash there.
The EQ Bank 3% rate started in January 2016 and could end at any time (UPDATE: It’s dropping to 2.25% on April 18 2016) , which is partly why I was hoping to open a Zag Bank account. I planned to use it if the EQ Bank rate dropped significantly before May 31.
Anyway, given that my EQ Bank account is working well I’m really not interested in trying any more to open an account at Zag.
The Comedy of Errors Began With a Mistake Made Purely By Me
Probably I would have a fully functional account if I had not made a mistake when first applying to Zag Bank. My mistake was that I made my first deposit cheque payable to myself rather than payable to Zag Bank. (When I opened accounts at other banks, that was how I made my first deposits.) I admit I did not read the instructions properly.
Yes, I was wrong!
Because the cheque was not made payable to Zag Bank, they refused to cash it, per their policy. Fair enough.
I mailed that cheque in on January 14.
On January 22, they sent me an email stating that they had not received a cheque from me and could I please mail one in or deposit one by taking a photo of it using an app. Their note said to ignore the note if I had already mailed in a cheque. So I ignored it.
Finally, on January 26, someone from Zag Bank phoned me to tell me that they could not cash the cheque I had mailed in because it was payable to myself, not to Zag Bank.
My First Conversation with the Zag Bank Customer Service Line Leaves Me Disquieted
Soon after they called me, I phoned Zag Bank to ask about the cheque they refused to cash.
I wanted to know
- where was the cheque? Were they mailing it back to me? (If so, I figured I could correct the “payable to” to read Zag Bank, initial it, and mail it back in.)
- if they weren’t mailing it back, were they going to keep it and deposit it after my account was fully opened? (After all, in general I will be mailing in cheques payable to myself so I can make deposits in the account.)
The answers were disquieting.
First, they would not accept a cheque that had been corrected and initialed. Why? I have no idea. I’ve corrected cheques and initialed them many times. It would be against their policy, though, I was told.
Also, I was told, once a cheque had been “dishonoured” by their system, it would be automatically rejected.
Second, the agent said that the cheque was “probably” shredded and only an image of it still existed although they weren’t actually sure where that image was! So mailing it back wouldn’t be an option.
I said I wasn’t really happy knowing a cheque was floating around that could be cashed out, even to myself, at any time which could cause my chequing account to go into overdraft. However, I agreed it sounded unlikely that it would happen and decided to let the matter drop.
I agreed to write a brand new cheque with a brand new date on it and made payable this time to Zag Bank, not me, and use their photo cheque deposit app to submit it.
How Well Did Using the Zag Bank App to Deposit a Cheque By Photo Work?
It catastrophically failed.
The image of the cheque went missing and no one could find it.
What Happened When I Tried to Deposit My Cheque to Zag Bank Using the App?
I thought it went perfectly.
I opened the email note with the “one time” link to use the App to take a photo of my cheque and deposit it. This was on January 28 2016.
I took a photo as requested of both the front and back of the cheque.
It submitted and I received a happy face message telling me that my cheque should be processed and my account fully opened within 5 business days. So I made a note of it and got on with my life.
After 6 business days, my cheque had still not cleared my bank and I saw no signs of life on my Zag Bank account when I signed in.
On about February 10, 2016, I phoned Zag to find out whether my cheque had been processed.
Zag Bank Had No Record of My Cheque Image
There was no sign of the image from my cheque anywhere at Zag. The agent I spoke to on the phone was very polite and helpful but he could not really do anything since there was nothing to work with. He agreed to have the matter looked into. I was told that someone would either phone me, or would send me a “secure email” on my Zag Bank account page. I said if I didn’t hear back that I would phone them to see what they discovered when they looked for the image.
By Wednesday February 17, I had not received a phone call or an email, so I called Zag Bank.
Again, I spoke with a very pleasant helpful agent who confirmed there was still no sign of the image of my cheque. She offered to have a supervisor phone me in the afternoon but I declined because I would be busy then.
I asked if I could just submit the image of the cheque again.
Why Can’t I Submit an Image of my Cheque to Zag Bank If They Never Received the First One?
The agent was not sure whether this approach would work. She found and successfully re-sent my “welcome” email to me. I said I would use it to re-send the image of the cheque and hung up. (Bad mistake on my part.)
As soon as I opened the link in the email I was told I could not send any image of a cheque in to Zag Bank because I had already done so.
I phoned back in to Zag Bank and spoke with yet another very helpful, courteous customer service agent.
She suggested I could
- mail in a new cheque.
- try opening a totally different brand new Zag Bank account and deposit a new cheque either by mail or by using the App.
I don’t want to do either.
I’ve already paid for two cheques from my bank. I’ve already paid for one envelope and one stamp. I have spent about an hour in total now on the phone. I have NOTHING to show for these expenses or time.
I have lost faith and the thought of spending more money and time trying to get this process to work is not appealing.
Why Can’t the Zag Bank App Let Me Send In a New Image of My Cheque?
All I can say is that they must be using a very unforgiving computer program if there is NO WAY to send in an image of a cheque if the first image is rejected or lost.
The staff at Zag Bank do seem to want to help me fix this problem. It just appears that it is their computer system that is running the bank, not the other way around.
Why Don’t I Just Try Again?
I’m 98% sure that if I mail in a brand new cheque or if I try to open a second account with a brand new cheque it will all go perfectly.
The thing is, I’ve lost faith in Zag’s ability to resolve a fairly simple problem. It leaves me uneasy about how they would handle it if something major went wrong, like a transfer in or out from the bank “disappeared” in transit.
I’ve decided to just “let it go” for now. I’m stubborn, so I might try to open an account again in the future, but for now, I give up.
And Then The Cheque Was Mysteriously Found and Cashed and Deposited in My Zag Account!
And then after my last phone call with Zag, I received an email from Zag Bank dated February 19 welcoming me and stating they had now deposited my cheque and my account was fully active!
I wrote an email to customer service asking how and where my cheque’s image had been found. The answer I received was unsatisfactory as it did not say what had happened between when I sent in the image on January 28 and when they processed it on February 19. (The cheque cleared from my chequing account on February 23.)
The response was apologetic, kind and courteous but uninformative. “This was a rare occurrence, and I would not worry about it happening again in the future. Again, I am sorry that it took some time to locate the cheque, and deposit it for you.”
I’m sorry too because I’m so uneasy about what happened that I haven’t had the nerve to send any more money into Zag. I may in future because I have seen reviews from dozens of other people who have never had a problem but I am not eager to try again.
Luckily, because this was a “test” cheque the amount was not large. It did not put over-draw my chequing account. If it had been a significant sized cheque, though, it could have been a real problem.
Would I Recommend Zag Bank to Others?
Even though I’ve seen testimony from dozens of others that their account was opened easily and is working fine, I would not recommend Zag Bank. It didn’t go well for me so I won’t recommend it.
I’ll admit that I’m not really happy that each time I have had to reach out to Zag Bank to find out what is going on. So far, I have not received any messages from them reaching out to contact me about this missing cheque image.
I may try using Zag Bank myself in the future but I won’t be recommending them. It’s ok if I want to take a chance with my money but I won’t tell others to do that.
Are you one of the hundreds (perhaps thousands) that has opened an account with Zag Bank with no problem? Or are you one of the few (or perhaps I’m alone in this?) who has had problems trying to open an account? Please share your views with a comment.