The Financial Consumer Agency of Canada (FCAC) has levied a significant $4-million penalty against Bank of Montreal (BMO) for failing to adequately disclose fee details, resulting in overcharges to its customers. This action underscores the FCAC’s commitment to protecting consumers within the Canadian financial landscape.
BMO Fined for Fee Disclosure Issues
The violations stem from BMO charging monthly plan fees to customers who were eligible for waivers or discounts. The FCAC investigation revealed that between 2010 and 2024, a staggering 101,091 customers were affected by these incorrect charges. The bank has since issued refunds totaling over $3 million, and has also donated an additional $600,000 to cover amounts where refunds weren’t feasible.
A spokesperson for BMO stated the bank maintains the highest standards of conduct and proactively reimbursed affected customers, also self-reporting the issue to the FCAC. This proactive approach, while acknowledged, did not mitigate the severity of the penalty given the extent of the error and the number of complaints received.
Who Was Affected by the BMO Overcharges?
The impacted customers included those with discounted bank accounts specifically designed for:
- Newcomers to Canada
- Medical and dental students
- Indigenous banking clients
- Participants in a home financing promotion
The FCAC determined that these customers were provided with inaccurate information regarding their account fees. The $4-million penalty reflects the degree of negligence demonstrated by BMO in preventing and detecting the error, particularly considering the bank received over 500 customer complaints regarding the monthly plan fees.
Ensuring Financial Consumer Protection
This penalty serves as a strong reminder to all financial institutions of the importance of transparent fee disclosures and diligent error prevention. The FCAC continues to play a vital role in safeguarding the rights of Canadian financial consumers. For more information on financial consumer rights and protections, visit the Financial Consumer Agency of Canada website. You can also find further insights into banking regulations from the Bank of Canada.
Andrew Saunders, President and CEO of the FCAC, emphasized the agency’s dedication to holding financial institutions accountable for ensuring fair treatment of their customers.
