The Financial Consumer Agency of Canada (FCAC) has imposed a substantial penalty of $4 million on the Bank of Montreal (BMO) for its improper handling of customer charges. This penalty stems from BMO’s failure to adequately disclose fee details associated with its discount plan options.
Background of the Violation
The FCAC, which oversees the protection of financial consumers, identified that BMO charged erroneous monthly fees to its customers. These fees should have been either waived or appropriately discounted.
Impact on Customers
Between 2010 and 2024, a total of 101,091 customers were negatively impacted by these actions. The bank has since initiated refund processes, returning over $3 million to those affected.
- Total customers affected: 101,091
- Total amount refunded: $3 million
- Additional donations made by BMO: $600,000
Types of Accounts Involved
The penalty largely pertains to erroneous charges associated with several discount plans. These plans were designed for:
- Newcomers to Canada
- Medical and dental students
- Indigenous banking clients
- Participants in specific home financing promotions
Bank’s Response
A spokesperson for BMO stated that the bank is committed to maintaining high standards of customer service and accountability. They emphasized that BMO took proactive steps to reimburse affected clients and promptly reported the issue to the FCAC.
The Role of Consumer Complaints
The FCAC noted that BMO had received over 500 customer complaints regarding the monthly plan fees before this penalty was enacted. This indicates significant consumer concern over the bank’s fee practices.
The $4 million penalty reflects the severity of BMO’s negligence in both preventing and recognizing the issue. The imposition of this fine underscores the importance of banking transparency and the protection of consumer rights in Canada.
