Consumer Watchdog Fines BMO $4M for Overcharging Discount Plan Customers
The Financial Consumer Agency of Canada (FCAC) has imposed a $4 million fine on the Bank of Montreal (BMO) for overcharging its customers. This decision stems from BMO’s failure to adequately disclose fees associated with its products.
Key Facts Surrounding the Fine
This penalty primarily arises from instances where BMO charged clients monthly plan fees that should have been waived or discounted. According to the FCAC, these violations affected a significant number of customers.
Details of the Violation
- Customer Impact: A total of 101,091 customers were impacted between 2010 and 2024.
- Total Refunds: BMO has issued refunds exceeding $3 million.
- Additional Donations: The bank contributed an additional $600,000 for amounts that could not be refunded.
The violations involved customers from several specific demographic groups, including newcomers to Canada, medical and dental students, and Indigenous banking clients. Participants of promotional home financing plans were also affected by the erroneous fee information.
BMO’s Response to the Fine
A spokesperson for BMO stated that the bank is committed to maintaining high standards of conduct. The bank proactively reimbursed its customers and notified the FCAC about the issue. Despite these efforts, the agency emphasized the penalties were a reflection of BMO’s negligence in monitoring and addressing this problem.
Customer Complaints
The FCAC noted that BMO received over 500 customer complaints pertaining to the erroneous monthly plan fees. This high volume of complaints underscores the seriousness of the oversight.
The $4 million penalty serves as a significant warning to financial institutions about the importance of transparency and accountability in their operations. As the FCAC continues its mission to protect consumers, this case highlights the need for banks to prioritize clear communication regarding fees and services.
