The Royal Bank of Canada is facing a $4.25-million penalty after the Financial Consumer Agency of Canada found that the bank provided some customers with monthly credit card statements containing inaccurate information.
The violations, which took place between 2001 and 2024, involved RBC's deactivation of customers' credit card accounts, which would then be migrated to a new credit card after fraud was reported. This action by RBC violated a consumer provision by failing to transfer credits from deactivated credit card accounts to customers' new accounts.
A total of 227,947 accounts were impacted by the violation, resulting in customers receiving inaccurate credit card statements with incorrect information on amounts credited or charged, including interest rates and dates credit amounts were posted to the accounts.
RBC has since transferred and refunded $22,427,774.30 to affected customers, as well as made a charitable donation of $299,000 for customers who could not be located. The administrative penalty was paid by RBC on April 17, after a Notice of Violation was issued a month prior.
The Financial Consumer Agency of Canada stated that accurate disclosure is a fundamental element of the consumer protection provisions of the Bank Act, and customers must be provided with accurate information to make informed financial decisions.
This is the second significant penalty faced by a financial institution this year, following a $4-million fine imposed on Bank of Montreal in February for violating consumer provisions in the Bank Act.
In that case, 101,091 BMO customers were financially impacted, resulting in the bank issuing refunds and redressing interest totaling more than $3 million, as well as an additional charitable donation of over $600,000.
