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  1. Home»
  2. TD Bank Fined $6.5 Million...»

Consumers Council of Canada News

TD Bank Fined $6.5 Million for 22 Years of Improper Card Fee Rebates

by Staff | Nov 13, 2024 | Action, Credit, Financial Services, Right-Basic Needs, Right-Choice, Right-Redress, Trendy

Toronto-Dominion Bank paid a $6.5 million penalty and pledged a $71.7 million reimbursement to customers after Canada’s financial watchdog found the bank had not properly credited more than 250,000 customers for credit card fee rebates for more than 22 years.

The Financial Consumer Agency of Canada (FCAC) released the summary of proceedings that followed the bank’s payment that was originally proposed in a Notice of Violation from June 13. It is the largest publicly disclosed financial penalty in FCAC history. 

The Bank’s payment after the Notice of Violation is akin to a ‘no contest’ plea and, in such cases, FCAC publishes a summary of proceeding, rather than a more detailed decision by the Commissioner. 

TD Bank was deemed to have committed violations of the Cost of Borrowing (Banks) Regulations and successor the Financial Consumer Protection Framework Regulations from September 2001 to October 2023. 

“The violation relates to an error in the Bank’s monthly credit card statements caused by employees not properly entering the credit card annual fee rebate due to inadequate procedures,” read the FCAC summary. “This resulted in consumers not being credited the rebate entitled.” 

TD Bank pledged to reimburse the 255,886 customers, making a ‘contribution to charity’ for customers that cannot be located or identified. FCAC encourages such donations to organizations working in financial literacy or providing services to the financial sector. 

The FCAC notice said the penalty amount reflects the Bank’s negligence in implementing controls to prevent and detect the error for more than 20 years. 

“It also reflects that the degree of harm was very significant given the length of time of the violation, the number of customers affected and the financial impact. The Bank’s history of violations was considered.”

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