Ontario man hit with close to $300 in bank fees after online lottery purchases

An Ontario man is warning others after he got dinged by some pretty hefty bank fees for purchasing lottery tickets online.

The GTA resident, who wished to remain anonymous, said he signed up for a lottery subscription with his credit card on the OLG website. He used the provincial lottery corporation’s relatively new Direct Pay online payment option. He said his credit card statement later showed $290 in bank fees for a total of 58 transactions.

His bank, BMO Canada, treated each lottery purchase as a cash advance which carries with it additional fees and begins incurring interest immediately.

“It was confusion and anger at the same time,” he told CityNews. “Why am I being charged in the first place for something that’s been marketed as not having these fees associated with it?”

OLG introduced Direct Pay in November noting on its website that using the payment option may avoid cash advance fees. Except it didn’t with BMO. The financial institution told CityNews that customers should be aware of their cardholder agreements. In it, lottery tickets and other gaming purchases are classified as “cash-like transactions” since the tickets can be converted to cash.

CityNews reached out to the rest of Canada’s big 5 banks to find out what their policies are when it comes to Direct Pay. CIBC and RBC were the only ones to respond. While they did not address Direct Pay specifically, they too pointed to a section of their cardholder agreements which outline the same classification of gaming purchases.

So why does OLG say Direct Pay may avoid these fees? Previously, the only way to purchase lottery tickets on the website was by adding money to an e-wallet. “Financial institutions consider money deposited into the e-wallet in a customer’s OLG.ca account or any other iGaming company as a cash advance,” said OLG spokesperson, Tony Bitonti, in a statement to CityNews. “The e-wallet holds that money to be used for future purchases on the iGaming site.”

“OLG has agreements with financial institutions for Direct Pay that allows players to purchase Lottery tickets using their Visa or Mastercard immediately, bypassing the deposit process and the additional fees,” Bitonti explained.

The CityNews viewer who reached out to Speakers Corner said after CityNews began asking questions, BMO Canada got in touch with him and reversed all of the cash advance fees.

Bitonti added in the statement, “OLG has been informed that the Bank of Montreal (BMO) has changed its policies on these additional fees, which some customers using Direct Pay may have recently been charged. Customers are encouraged to contact their bank to request to have the charges reversed.”

It should be noted that if you do want to use your credit card for any gaming purchase whether online or in person it is best to check with your bank first. Most will treat these purchases as cash advances.

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