Received a Simpli Financial warning letter to close account due to eBay sales - Canada crackdown?

[ketoja]

Recieved a letter today from Simpli Financial that I am not allowed to use my account to recieve payments from eBay. I called to speak with them and explain that I do not have a business, I'm just selling some of my personal things and that eBay withholds the HST on all sales.  Apparently none of that matters, the funds are coming from eBay (a business) and that, in and of itself makes it a business transaction which is prohibited by Simpli's terms of service. They said I need to set-up a business account with CIBC to continue to do this. They also said they are aware of the broad use of Simpli in Canada by eBay sellers and are cracking down on it.  Anyone else experiencing this nonsense?  

[fergua3]

why on earth do they care?

[ilikehockeyjerseys]

Most banks have products aimed directly at businesses. They either want to upsell, or there must be some sort of legal reason why they can't operate business accounts. Maybe their accounts aren't insured for business transactions, I don't know. 

I haven't heard of it happening before, but it doesn't sound that outlandish. It sucks that it could be another layer of complexity for casual "garage sale" sellers who aren't genuinely engaging in activities with a reasonable expectation of profit. But it could be that it is just OPs bank specifically cracking down.

[reallynicestamps]

But it could be that it is just OPs bank specifically cracking down.

That would be for the OP to answer.

Was the demand from Head Office or your local branch manager?
Wait.

Simplii is an online bank with no branches.

I have a Simplii account and was thinking of moving my MP for another account there to simplify my life (and for the paper statements).  But that is now being reconsidered.

[marnotom!]

There’s a thread from three years ago on the RedFlagDeals.com forum that includes a post from an eBay seller who experienced this same issue, so I’d say that there are likely others who have gone through this.  It's just a matter of if and when Simplii catches up to them.

https://forums.redflagdeals.com/getting-around-ebays-seller-requirement-link-bank-account-2450090/2/

The Simplii products and services agreement does state that accounts are for personal use and not for use for businesses one owns or has any interest, so I guess its definition of a “business interest” is pretty broad.

 

[ilikehockeyjerseys]

I think it comes down to the bank is not in a position to determine if each use of eBay is actually "I'm just selling my old stuff, trust me bro" or actual business activities. So from a liability POV, it's likely easier to ban it entirely. 

[lotzofuniquegoodies]

@ketoja 

You may want to consider using Tangerine. It's a similar type entity without extra charges for business accounts. Hopefully it is still working for others to apply/use.

No, there are no monthly fees or service charges for Tangerine business accounts:

• No monthly fees: Tangerine business accounts have no monthly banking fees.
• No minimum balance requirements: There are no minimum balance requirements for Tangerine business accounts.
• Competitive interest rates: Tangerine business accounts offer competitive interest rates. 

[fergua3]

Seems to me with this move Simplii is simply going to lose a lot of customers and maybe CIBC too.

[marnotom!]

Looks like Tangerine has similar—but not identical—wording in its terms of service about the use of its chequing account.

The Tangerine Business Account is not defined as a chequing account, for what it's worth.

[marnotom!]

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@fergua3 wrote:

Seems to me with this move Simplii is simply going to lose a lot of customers and maybe CIBC too.

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Seeing as "this move" has been in place since at least 2021, I sort of doubt it.  Besides, Simplii would be effectively firing customers it doesn't want in the first place.

A quick scan of the Tangerine terms of service suggests that Tangerine doesn't view its Business Account as a primary transaction account for business use.  I agree with @ilikehockeyjerseys that there's a good chance that Tangerine and Simplii are being used as "gateway" financial institutions in order to upsell clients to these online banks' more-established brick and mortar counterparts, although there may also be legal reasons behind this clause.

[reallynicestamps]

A reminder that many sellers have reported that Tangerine and Managed Payments do not play well together.

And this may be the explanation.

[marnotom!]

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@reallynicestamps wrote:

A reminder that many sellers have reported that Tangerine and Managed Payments do not play well together.

And this may be the explanation.

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That thought crossed my mind as well.  Tangerine Business Accounts are not chequing accounts and Tangerine Chequing Accounts aren't intended for business use.

[lotzofuniquegoodies]

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@marnotom! wrote:

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@fergua3 wrote:

Seems to me with this move Simplii is simply going to lose a lot of customers and maybe CIBC too.

---

Seeing as "this move" has been in place since at least 2021, I sort of doubt it.  Besides, Simplii would be effectively firing customers it doesn't want in the first place.

A quick scan of the Tangerine terms of service suggests that Tangerine doesn't view its Business Account as a primary transaction account for business use.  I agree with @ilikehockeyjerseys that there's a good chance that Tangerine and Simplii are being used as "gateway" financial institutions in order to upsell clients to these online banks' more-established brick and mortar counterparts, although there may also be legal reasons behind this clause.

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@marnotom! 

@ketoja 

So to review, if you sell on eBay you have technically become a business no matter if you are or aren't. Doesn't matter if you are selling things you bought to resell or selling your grandmothers fine china or a book you got from a registered charitable used store. As a business in eBay's wisdom technically you are not considered B2B even though in many cases you might be selling to a business. You might even be shipping to an entity that is considered tax exempt or items that are rated at 0 % tax or reduced rates. Doesn't matter. Basically tough noogies for parties involved!!!  I guess this is what happens when you land under the e-commerce ☔ and it's raining 🐕's!!!

How long before this banking technicality hit the major banks and be addressed in a similar way?

[reallynicestamps]

if you are selling things you bought to resell or selling your grandmothers fine china or a book you got from a registered charitable used store.

Three different scenarios.

if you are selling things you bought to resell- That's a business.

selling your grandmothers fine china- Probably not a business.

a book you got from a registered charitable used store.- Was it purchased for resale? A business.

Buying used, or from a charity does not mean you are not a business.

Turning stuff you own(or inherited) probably isn't business, but capital gains may come into that.

[lotzofuniquegoodies]

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@reallynicestamps wrote:

if you are selling things you bought to resell or selling your grandmothers fine china or a book you got from a registered charitable used store.

Three different scenarios.

if you are selling things you bought to resell- That's a business.

selling your grandmothers fine china- Probably not a business.

a book you got from a registered charitable used store.- Was it purchased for resale? A business.

Buying used, or from a charity does not mean you are not a business.

Turning stuff you own(or inherited) probably isn't business, but capital gains may come into that.

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According to eBay all eBay sellers are considered B2C:

Yes, eBay is considered a business-to-consumer (B2C) company: 

• eBay is a consumer-to-consumer (C2C) and business-to-consumer (B2C) online marketplace where people buy and sell a variety of goods and services. 

  • B2C definition

    B2C is a business model where businesses sell products and services directly to consumers, without a middleman. 
  • eBay as a B2C company

    eBay is a multi-vendor digital platform that connects buyers and sellers to complete online sales. 

[marnotom!]

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@lotzofuniquegoodies wrote:

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So to review, if you sell on eBay you have technically become a business no matter if you are or aren't. Doesn't matter if you are selling things you bought to resell or selling your grandmothers fine china or a book you got from a registered charitable used store. As a business in eBay's wisdom technically you are not considered B2B even though in many cases you might be selling to a business. 

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I don't think I'd go that far.  I think it's fair to say, though, that if you sell on eBay you are engaged in business practices (or commerce) and using the services of a facilitator to do this.  The faciltator is a business.  If you sold stuff without eBay's (or any other party's) involvement, I don't think these online banks would get their Stanfield's in a twist.

[lotzofuniquegoodies]

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@marnotom! wrote:

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@lotzofuniquegoodies wrote:

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So to review, if you sell on eBay you have technically become a business no matter if you are or aren't. Doesn't matter if you are selling things you bought to resell or selling your grandmothers fine china or a book you got from a registered charitable used store. As a business in eBay's wisdom technically you are not considered B2B even though in many cases you might be selling to a business. 

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I don't think I'd go that far.  I think it's fair to say, though, that if you sell on eBay you are engaged in business practices (or commerce) and using the services of a facilitator to do this.  The faciltator is a business.  If you sold stuff without eBay's (or any other party's) involvement, I don't think these online banks would get their Stanfield's in a twist.

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Isn't that how this whole schmozzle is referred to when it comes time to claiming customs taxes/fees paid "by businesses" when they need receipts?

[ypdc_dennis]

How often are you getting deposits from ebay?  You may have gone above a monthly transaction limit.

Other online banks also have "business" restrictions listed in their fine print.  Motusbank.ca is one example. HST has nothing to do with being treated as a business.

I currently use tangerine.ca (Scotiabank owned). I have it set for weekly deposits and any charges come from my credit card not from the bank account. This keeps my bank useage light.

-;-

[hockey-kong]

It needs to be said, fire a letter back to them and tell them to shove their account to where the sun doesn't shine. Then go open an account somewhere else.

In the time it took you to write the message and post you could have opened any number of banking accounts online. 

And as someone else mentioned, switch your ebay deposits to weekly or even monthly depending on your average $ amount of sales.

There are financial institutions by the hundreds who would love your business, both online & brick & mortar, just don't deal with these idiots at simplii.

[ketoja]

They care because they want me to open a business account and pay fees...