Canada’s financial consumer watchdog fined Toronto-Dominion Bank $400,000 for incorrectly disclosing its charges for some deposit accounts to seniors from 2012 to 2018.
The decision from the Financial Consumer Agency of Canada (FCAC) was made in August, and released September 29. The FCAC decision noted that approximately 500,000 customers were affected with excess charges of about $31 million. The bank announced its remediation plans in October 2018, advised all affected customers, and those customers received reimbursements via deposit to their account by the end of October 2018 or by cheque.
In its summary ruling, FCAC concluded TD violated section 446 of the Bank Act, but there was “no evidence of TD intentionally misleading customers or intentionally denying the lower pricing to which they were entitled.” FCAC also noted that TD self-reported the breach, and “moved swiftly to create a permanent solution for all eligible customers.”
The violations relate to TD’s decision to discontinue free account plans to seniors in March 2012. The bank’s revised fee schedules included a “senior’s rebate,” the details of which (25% reduction in monthly fees for those age 60 and over) were set out in a footnote. No instructions were provided by the bank about action customers needed to take to activate this rebate.
A July 2017 revision removed the senior’s rebate language and presented the charges for seniors as lower dollar amounts. However, still no instructions were offered regarding specific actions customers needed to take to access the lower charges. The lower charges had been provided automatically to seniors opening new accounts since 2012. However, some existing eligible customers and those who became eligible were not automatically charged the lower rates. TD required that these customers make a request for the seniors rebate or lower monthly charge.
TD identified a breach of the requirements related to the 2017 document in 2018, but the FCAC investigation found similar shortcomings dating back to the March 2012 disclosure. That document “created an expectation that the rebate would be applied automatically for all eligible customers, which was not the case,” and that TD was aware that many eligible seniors had not requested the rebate. And although TD self-reported the violation after the 2017 revision, it took a year and a customer complaint to identify that the lower monthly charge in the disclosure document failed to match the actual amounts charged to eligible customers who took no action. The FCAC ruling viewed this as a failure of TD compliance.
TD Bank objected to being named in the publication of the findings, but the ruling of Commissioner Judith Robertson again reiterated the FCAC position that naming violators “will contribute positively to consumer confidence in Canada’s regulatory oversight of consumer protection and in the banking system.”