RBC Fined $4.25 Million Over False Credit Card Statements
The Royal Bank of Canada (RBC) has been hit with a $4.25 million fine by the Financial Consumer Agency of Canada (FCAC) after the regulator found that the bank provided customers with monthly credit card statements containing false information.
Who Was Affected and When?
The violations spanned more than two decades, occurring between 2001 and 2024. According to the FCAC, the breaches involved RBC deactivating customers’ credit card accounts after fraud was reported and then transferring their data to a new credit card. However, the bank failed to transfer funds from the deactivated accounts to the new ones, resulting in customers receiving inaccurate credit card statements.
A total of 227,947 accounts were affected by the breach, and some customers incurred additional costs as a result.
What Information Was Inaccurate?
The affected account statements contained false information about amounts credited or debited, including interest rates and the dates credit amounts were posted to the accounts, according to the FCAC’s summary of proceedings.
How Did RBC React?
RBC has since transferred and refunded $22,427,774.30 to affected customers. For those who could not be located, the bank made a charitable donation of $299,000.
The administrative penalty was paid by RBC on April 17, after the FCAC issued a notice of violation to the bank on March 18.
“The root cause of the breach was inadequate and ineffective control and oversight procedures, as well as operational problems with processes and proper reporting,” the agency wrote.
The FCAC emphasized that accurate disclosure is a “fundamental element of the consumer protection provisions of the Banking Act” and that customers “must be provided with accurate information” to make informed financial decisions.
Second Major Penalty This Year
RBC is the second major Canadian financial institution to face a significant fine this year. In February, the Bank of Montreal (BMO) was fined $4 million for violating the consumer provisions of the Banking Act.
BMO’s violations related to inaccurate billings for monthly plan fees that should have been waived or discounted for certain personal deposit accounts. From 2010 to 2024, BMO failed to disclose all fees applicable to these accounts, and between 2022 and 2024, the bank failed to disclose clear information about when monthly plan fees would begin.
In BMO’s case, 101,091 customers were financially impacted, resulting in the bank issuing refunds and interest totaling more than $3 million. An additional charitable donation of more than $600,000 was made to accounts that could not be refunded or to customers who could not be located.
