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Royal Bank of Canada was fined $4.25 million by the Financial Consumer Agency of Canada (FCAC) for providing some customers monthly credit card statements that contained inaccurate information.
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The violations, which took place from 2021 to 2024, were related to the way RBC deactivated a customer’s credit card account and then migrated those details to a new credit card after fraud was reported, the government agency said in a statement on Thursday.
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It said RBC failed to transfer certain credits from the deactivated accounts to the new ones, which led to customers receiving inaccurate credit card statements. Some customers also incurred additional charges.
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“Accurate disclosure is a foundational element of the consumer protection provisions of the Bank Act,” the agency said. “For consumers to make informed financial decisions, they must be provided information that is accurate.”
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A total of 227,947 accounts were impacted. RBC transferred and refunded about $22.4 million to affected customers and donated $299,000 on behalf of those customers who could not be located.
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“The root cause of the violation was inadequate and ineffective control and oversight procedures and operational challenges with processes and proper reporting,” the FCAC said in a separate document that summarized the case against RBC.
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The $4.25-million penalty reflects the significant harm done to customers, among other things, it said. RBC paid the penalty on April 17 after the agency issued a notice of violation on March 18.
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RBC wasn’t immediately available for comment.
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This was the second penalty the agency announced against a big bank this year.
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In February, the agency said it applied a $4-million penalty on Bank of Montreal for violations of consumer provisions in the Bank Act.
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The violations were related to erroneous charges for monthly plan fees that should have been waived or discounted for certain personal deposit accounts, the agency said in a statement in February.
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“From 2010 to 2024, BMO failed to disclose all charges applicable to these accounts,” it said.
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A total of 101,091 customers were financially impacted in the BMO case. The bank issued more than $3 million in refunds and redressed interest to impacted customers. It also made a donation of more than $600,000 on behalf of affected customers who could not be found.
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