The Toronto-Dominion (TD) Bank has been fined $6.4 million and ordered to refund nearly 256,000 customers for errors related to credit card annual fee rebates spanning two decades, a federal regulator said.
“During the September 1, 2001 to October 5, 2023 period, an estimated 255,886 customers were affected, representing an approximate financial impact of $71,723,694.49,” the Financial Consumer Agency of Canada (FCAC) said in a ”
Summary of Proceeding“ issued on Nov. 6 and first reported by
Blacklock’s Reporter.
The error involved the bank’s employees not properly applying annual fee rebates to credit card account holders, the regulator said. No details about specific cases were provided.
TD paid the $6.5 million penalty in July, about a month after the amount was proposed in a notice of violation, FCAC said. It added that the bank will reimburse affected customers, with a contribution to charity to be made for those who cannot be identified.
“The penalty amount reflects that the Bank was negligent in failing to implement controls and effective compliance monitoring measures to prevent and detect the error over 20 years,” FCAC said.
“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 FCAC noted the TD’s “history of violations” in levying the fine.
The penalty follows a $9.2-million fine imposed on TD in May by Canada’s financial-crime watchdog for not complying with anti-money laundering and terrorist financing rules. Other financial institutions also came under scrutiny by the Financial Transactions and Reports Analysis Centre of Canada, which imposed a
$7.5-million fine on the Royal Bank of Canada and a
$1.3-million fine on CIBC last December.
In October, TD Bank in the United States
pleaded guilty to conspiring to violate the Bank Secrecy Act and commit money laundering. The U.S. Justice Department
said the bank agreed to pay roughly $3 billion in penalties as part of a historic settlement with multiple regulatory agencies.
The FCAC began in 2020 to publicly name banks found to have breached consumer protection regulations. This followed a 2018 mandate from Parliament requiring public disclosure. Additionally, the 2018 Budget Implementation Act, formerly known as
Bill C-86, increased maximum penalties from $500,000 to $10 million.
The agency had been hesitant to identify banks that violated consumer protection regulations. “Our regime is not a punitive one, so when I am looking at whether to name or not name an institution, I have to look at each case on its own merits individually,” former FCAC Commissioner Lucie Tedesco
testified before the Commons finance committee in June 2017.
