Watchdog Fines BMO $4M for Overcharging on Discount Plans
The Financial Consumer Agency of Canada (FCAC) has imposed a $4 million penalty on the Bank of Montreal (BMO) for overcharging customers. This action stems from the bank’s failure to adequately disclose fee structures, leading to customers being charged fees that should have been waived or discounted.
Details of the Violation
The violations affected over 101,000 BMO customers between 2010 and 2024. The FCAC identified that clients were incorrectly billed monthly fees associated with discounted plans. Specifically, these discounts were intended for:
- Newcomers to Canada
- Medical and dental students
- Indigenous banking clients
- Participants in a home financing promotion
Financial Impact and Customer Refunds
BMO has issued refunds totaling more than $3 million to affected customers. Additionally, the bank has made a donation of $600,000 to cover amounts that couldn’t be refunded. This proactive approach follows the bank’s commitment to high standards and its initiative to report the discrepancies to the FCAC.
Extent of Noncompliance
The FCAC’s decision to levy a $4 million fine reflects the significant negligence exhibited by BMO in both preventing and detecting these errors. Despite receiving over 500 complaints regarding the monthly fees, the bank failed to rectify its practices promptly.
As the banking sector increasingly focuses on transparency, this case emphasizes the importance of accurate fee disclosures. Customers should remain vigilant about banking fees and reports should be made if discrepancies arise.
