The Financial Consumer Agency of Canada (FCAC) has announced an administrative penalty of $4 million against the Bank of Montreal for contraventions of the consumer-related provisions of the Bank Act linked to fee disclosures.
According to the regulator’s summary of the proceedings, the disclosure failures occurred primarily between 2010 and 2024 and were concentrated within certain discounted banking programs. The FCAC stated that "BMO failed to disclose all charges applicable to these accounts" and that the bank supplied incorrect information about when monthly fees would begin.
The FCAC said the disclosure shortcomings led to erroneous charges for 101,091 account holders. Those affected included newcomers to Canada, Indigenous banking customers, and students. The regulator specified that these clients were charged fees that, under the terms of the discounted programs involved, should have been waived.
In response to the findings, the Bank of Montreal provided more than $3 million in refunds and interest redress to the impacted customers. For sums that could not be returned to individual account holders, the bank made a charitable donation of over $600,000 to address the outstanding balance.
The FCAC highlighted that the size of the penalty reflects the regulator’s assessment of the bank’s shortcomings in maintaining monitoring systems capable of detecting the errors in a timely fashion. The regulator underlined the importance of accurate disclosure, stating, "For consumers to make informed financial decisions, they must be provided information that is accurate and, at a minimum, meets legal requirements."
This enforcement action centers on the intersection of disclosure practices and consumer protection within banking products that offer discounted or waived fees. The FCAC’s decision points to deficiencies both in the disclosure language provided to customers and in the internal controls designed to ensure those disclosures were applied correctly over a prolonged period.
The monetary components of the resolution are explicit: a $4 million penalty, more than $3 million reimbursed to customers with interest, and a charitable payment exceeding $600,000 to settle unrecoverable balances. The affected client total is stated as 101,091, and the timeframe of the conduct is identified as mainly 2010 through 2024.