update - I found the letter from CIBC. Here is the text. So I'm going to send this to Equifax and hope that's the end of it.

July 15, 2011
CIBC Reference: 2011-XXX-XX39

Dear [Name withheld]
We have completed a review of the concerns you outlined in your letter addressed to the CIBC Ombudsman's Office dated June 6, 2011, and have the following response.

You stated your bank account #***97 was debited for $2624.00 on February 14, 2011 relating to an outstanding student loan you had no knowledge of. You are requesting CIBC provide documents to substantiate your student loan remains outstanding.

Our investigation confirmed that due to statute limitations, your student loan file has been closed with Financial Debt Recovery. As such, on April 11, 2011 $2624.00 was credited back to your bank account **97.

Thank you for giving me the opportunity to resolve this matter for you. I am pleased that you are satisfied with the outcome.

Please call me at the telephone number· and extension below and quote the above-listed reference number if you would like to discuss this matter further.

[Name withheld]
Specialist, CIBC Customer Care

*update - I first posted this back in Feb 04 but my post got deleted??

I thought I should update this post since I think story might be of interest to some people.

The 'facts' in this case are increasingly weird.

After I put together all the documents that I had at my disposal, I sent a letter to the CIBC ombdusman's office on Jun 6, 2011. It took a while but I received a letter from them indicating that they were RETURNING MY MONEY and in fact they did. Stupidly I did not keep track of the letter - I have a file that I keep all documents related to this case in, but for some reason I don't have that letter.

However I called CIBC's ombudsman's office and asked if this was the end of the matter, was I free from this supposed debt? They indicated that they WOULD NOT PURSUE THE MATTER further. I asked for a written confirmation of this but never received one. Today (Feb. 04) I asked the ombudsman's office again, in writing this time for that letter.

However when I checked my credit report it shows this item that wasn't on my credit report last year (only on my Equifax report, not TransUnion).

CIBC STUDENT LOANS
Phone number: not available
Account number: XXX ... 345
Association to account: Individual
Type of account: Installment
Date opened: 1998-11
Status: Bad Debt, collection or unable to locate
High Credit/Credit limit: 00000000008392
Payment amount: $90.00
Balance: $6,478.00
Past Due: $4,514.00
Date of last activity: 2007 - 02
Date reported: 2011-04

What's particularly frustrating, besides this new credit item, is the date of last activity - 2007. I know for a FACT that I haven't even returned a phone call to a collection agent since 2005. So how is there any new activity on this?

I will file my income tax soon (update - have done this) and I wonder if the Fed. gov. will withhold anything? (update - they did not)

My plan is to get that letter from the ombudsman then send in a correction from to the credit reporting agencies. However based on prior experience I don't expect this to be simple.

I cannot guarantee that your income tax refund will be withheld this year ( 2011 ) which in all probability, it won't, but when you file your income tax return for 2011 which is due by April 30, 2012, there is an excellent possibility that this is when any income tax refund will be withheld. I am not privy to the CRA's policies and practices regarding exercising their right of set-off. I can only make you aware of what the legislation provides and what the Government of Canada is able to do legally.

The Federal Government through FDR was able to "hit" your CIBC account because they knew where they had to pay out the defaulted loan ( both bank and branch ) and therefore assumed that is where you did your banking. They were right. Apparently, FDR does not know that you have another account at the Royal Bank, otherwise, they woud have "hit" it as well. There is a "Golden Rule" in banking. You NEVER maintain a bank account at the same bank at which you obtained a loan or a credit card. REASON If you default on the loan or a credit card, the bank can exercise it's "right of set-off". Even if you obtain a line of credit from a bank, there is no legal requirement that the bank account from which the bank is making the monthly withdrawals must be maintained at the bank where you obtained the line of credit. Therefore, if you default on the line of credit, the bank cannot exercise it's "right of set-off".

The National Student Loan Service Centre only administers student loans that were obtained AFTER August 1, 2000. Since you obtained your loan on or about September 1, 1998, that is why they could not provide you with much information. Had you obtained this loan after August 1, 2000, they could have supplied the complete details and status of your loan. That is why this Centre was established because too many students were experiencing difficulties in attempting to obtain information on their current loan status as well as their defaulted loans.

If you have decided not to repay this loan, for whatever reason, then, your income tax refunds and quarterly GST tax payments will be withheld until the debt is repaid. Please keep in mind that interest will continue to accrue while the debt is being repaid through the withholding process. If this is not satisfactory to you, I would suggest that you give some consideration to repaying this debt if you are financially able to do so

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Educating one Consumer at a time.

Huh - well (if correct) that is a fine bit of sleuthing on your part. Then I should find out in September when I no longer receive an income tax refund - basically the government will start to withhold all payments until the debt has been cleared up?

What else can I look forward to?

One thing I still don't understand - why didn't this money get siphoned out of my Royal Bank account? Why did it only happen with the CIBC account?

Do you have any advice as to what I should do now? Why is the National Student Loan Centre unable to give me any info when I call them?

Generally speaking, the CRA will not withhold income tax refunds or quarterly GST payments until the expiration of the 6 year period stated in Subsection 16.1(1) of the "Canada Student Financial Assistance Act".It appears that your 6 year period should expire this year. This comment is based on the information found in the Equifax Credit Report----------"Date of Last Activity" 2005-09

If this was a CIBC collection, there would be no need to contract this debt to FDR CIBC would simply remove the funds from your account back in 2004 when you defaulted on the student loan. And as long as a student loan is guaranteed by the Federal Government for repayment pursuant to the "Canada Student Financial Assistance Act", why would CIBC assign this debt to FDR on the oft-chance that FDR could not collect the entire debt and CIBC would have to consider suing you for the balance owing. It makes no sense.

The "Canada Student Financial Assistance Act: sets out the rules and regulations under which the Federal Government guarantees to any financial institution in Canada which makes a student loan, the payment of that student loan should the student default in the repayment of that loan. If it wasn't for this Act, no financial institution in Canada would issue a student loan. WHY? When the student is attending a post-secondary financial institution, who is going to pay the interest on the loan? And when the student finishes his/her full-time attendance and is unable to get employment, who makes the payments on the loan? No financial institution would ever consider making a loan to anyone who has no job and no source of income in which to service the loan. That is where the Federal Government steps in and guarantees the repayment of these student loans should they be defaulted upon.

This Act has no application to the private sector. It ONLY pertains to the Federal Government acting in the capacity as a creditor in attempting to collect a defaulted student loan to which the Federal Government has guaranteed and reimbursed a financial institution. Any financial institution can use the right of set-off at any time WITHOUT notice to the debtor.

Oh, and by the way, I am a retired professional and I do these posts as a source of enjoyment and to keep me mentally sharp and alert. I truly enjoy helping people with their financial problems and, of course, I never charge for my services. My mandate is to present the law, explain how the law works and possibly suggest a course of action I have several members send me PMs continually seeking answers to various problems. If you wish, you can send me the FDR documents and I will be happy to revue them and report back to you. If I can be of further assistance, do not hesitate to contact me or post on this discussion panel.

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Educating one Consumer at a time .

I think you're correct right up until the end when you mention that it is the federal government attempting to collect the debt.

I have received income tax refunds a couple of times since 2004 and I also regularly get GST refunds. The CRA has never brought this up with me, and certainly they know where I live and how to contact me.

I think this is a CIBC collection - they are using FDR as their agent and relying on the 'right of set-off' to collect. However as you state - section 16.1 means they should not be able to do so - or am I wrong? Do these regulations only govern government collection practices, and a private corp. like CIBC can use the right of set-off at any time?

Will it help if I send you the FDR documents? Do you do this professionally and are you available for hire?

Based on the information that you have supplied, here is what I think has happened. You completed your full-time attendance at a post-secondary educational institution on or about July 31, 2000 as indicated by the CIBC national student loan centre. Six months later, you began making your payments on this student loan on or about February 1, 2001. This is the standard requirement for the repayment of student loans. You ceased making any further payments to CIBC on or about October 7, 2004.

CIBC then made an application to the Federal Government for repayment of the federal portion of the defaulted student loan pursuant to the "Canada Student Financial Assistance Act" which guarantees the repayment of the federal portion of any student loan originally made by a financial institution. I assume that CIBC made a similiar application to the Provincial Government for repayment of the provincial portion of the defaulted student loan although that is not the subject of your posts.

It appears from the information shown in the Equifax Credit Report that CIBC received payments from both the Federal and Provincial Governments in September, 2005 and reported this information to the credit bureau.

Once the Federal Government pays CIBC for the federal portion of the defaulted student loan, they now become the creditor of your defaulted student loan and the CIBC is now out of the picture. The "Canada Student Financial Assistance Act", provides the rules and guidelines under which the Federal Government can pursue you for the collection of this defaulted and unpaid student loan. More specifically, these rules are provided for in Section 16.1

16.1(1) Subject to this section and section 16.2, no action or proceedings shall be taken to recover money owing under a student loan more than six years after the day on which the money becomes due and payable.

16.1(2) Money owing under a student loan may be recovered at any time by way of a deduction from or set-off against any sum of money that may be due or payable by Her Majesty in right of Canada to the borrower or to the estate or succession of the borrower.

What this means is the Federal Government can garnish any bank account or salary and wages for a maximum period of 6 years from the date the money becomes due and payable. If the debt is not satisfied within that time period, they can withhold any income tax refunds together with any quarterly GST tax payments through the Canada Revenue Agency until the debt is satisfied. The Federal Government does not require a court order or judgment to garnish bank accounts or salary or wages.

The Federal Government has assigned this debt to FDR to collect and FDR exercised its right to garnish your bank account by authority of the Federal Government. If this debt remains unpaid within the 6 year limitation period, don't expect an income tax refund or quarterly GST payment anytime soon.

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Educating one Consumer at a time

I now have the documents from FDR. They show a few applications with my name on it - some of them are signed, some not. I don't recall any of it.

They show payments on a loan that started on Feb 01 2001, and the last payment was on Oct 07, 2004.

There is another one that shows it has been paid off - Started Nov. 1999 and paid off Dec. 1999 - very weird.

I think they've thrown all this stuff together simply to make it more confusing.

I am sorry if this is confusing but I am only presenting what I can determine from what has been told to me, and from what I can remember.

The complete dates that I stated previously are what was given to me over the phone by FDR.

The 18-19 year old debt I am thinking about is when I first took out a student line of credit with CIBC - that was around 1992-93 but I don't remember. I don't have any records from that time. I cannot be sure that this is what CIBC/FDR is collecting for. The record of this debt is off my credit report.

FDR has promised to send me the dossier on this debt - but that was 2 weeks ago, and so far, nothing. CIBC will not provide any information. The CIBC student loan centre says I must deal with FDR.

Here are the items that mention CIBC on my credit report. As you can see everything is paid and up to date.
This is from the Equifax report.

CIBC STUDENT LOANS
Phone Number: Not Available High Credit/Credit Limit: 000000002353
Account Number: XXX...086 Payment Amount: Not Available
Association to Account: Individual Balance: $0.00
Type of Account: Installment Past Due: Not Available
Date Opened: 2001-02 Date of Last Activity: 2005-09
Status: Paid as agreed and up to date Date Reported: 2009-02
Months Reviewed: 04
Payment History: No payment 30 days late
No payment 60 days late
03 payments 90 days late
Prior Paying History: At least 120 days past due ( 2005-08 ) At least 120 days past due ( 2005-07 ) At
least 120 days past due ( 2005-06 )
Comments: Student loan
Monthly payments

CIBC
Phone Number: (780)408-1183 High Credit/Credit Limit: 000000009450
Account Number: XXX...556 Payment Amount: $227.00
Association to Account: Balance: $0.00
Type of Account: Installment Past Due: $0.00
Date Opened: 2003-08 Date of Last Activity: 2005-11
Status: Paid as agreed and up to date Date Reported: 2006-07
2/18/2011 Equifax Personal Solutions: Credit Rep…
…equifax.ca/…/viewPopUpDetail.ehtml… 2/5
Months Reviewed: 01
Payment History: No payment 30 days late
No payment 60 days late
No payment 90 days late
Prior Paying History:
Comments: Account paid
Monthly payments

Here is what the withdrawal looks like in my account statement:

Feb. 14, 2011 Inter-Branch Banking LOAN PAYMENT IBB COLLECTIONS
TORONTOTORONTO
$2,624.00

Since then CIBC has frozen the last $100 in this account and are still withdrawing their monthly charge. Since the $100 is frozen it can't pay that service fee so they are also charging me an overdraft fee of $5.00. Insult to injury.

The information on your previous posts is confusing.

On your post of February 18, 2011, you say that you took out your student loans around 2001 and 2003 ( I think ). On your post of February 22, 2011, the NSLSC stated that your study end date was April 20, 2000. On that same date, you posted that you had contacted CIBC national student loans centre that the loan was disbursed supposed on Sept 1, 1998 and that your estimated study end date July 31, 2000. On your post of March 14, 2011, you state that your debt with CIBC has got to be about 18 - 19 years old. These statements and comments are "all over the map" and don't make any sense.

What I'm trying to find out is when did you actually receive this loan from the CIBC and was there only one loan? And, when did you actually cease full-time ( not part-time ) attendance at a post-secondary educational institution?

Did you make any payments on this loan(s) and, if so, when did the payments start and when did the payments stop? And, if any payments were made, were they for the Federal portion, the Provincial portion or both?

Until I receive definitive answers to these questions, it's almost impossible to help you. You have presented a jig-saw puzzle with many pieces missing. I can't complete the picture until I have all the pieces.

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Educating one Consumer at a time