The Royal Bank of Canada has been fined $4.25 million by the Financial Consumer Agency of Canada (FCAC) for providing inaccurate monthly credit card statements to customers. The violations, which occurred between 2001 and 2024, impacted 227,947 accounts, according to the agency.
Violations and Impact
The FCAC found that RBC deactivated customers' credit card accounts after fraud was reported and migrated the details to new accounts. However, the bank failed to transfer credits from the deactivated accounts to the new ones, resulting in inaccurate statements. These statements contained incorrect information on amounts credited or charged, interest rates, and posting dates. Some customers also incurred additional charges.
According to the FCAC's summary of proceedings, the root cause was "inadequate and ineffective control and oversight procedures and operational challenges with processes and proper reporting."
RBC's Response
RBC has since transferred and refunded $22,427,774.30 to affected customers and made a charitable donation of $299,000 for customers who could not be located. The administrative penalty was paid on April 17, after the FCAC issued a Notice of Violation on March 18.
"Accurate disclosure is a foundational element of the consumer protection provisions of the Bank Act," the FCAC stated. "Customers must be provided information that is accurate in order to make informed financial decisions."
Second Major Penalty This Year
This is the second major penalty against a Canadian bank this year. In February, the Bank of Montreal was fined $4 million for violations related to erroneous monthly plan fees that should have been waived or discounted for certain personal deposit accounts. That case impacted 101,091 customers, resulting in refunds and interest totaling over $3 million, plus a charitable donation of more than $600,000.
