CIBC slapped with a $10M fine for repeated NSF charges
· Toronto Sun
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The Canadian Imperial Bank of Commerce doesn’t admit liability but agreed to pay millions of dollars in a proposed settlement of a class-action lawsuit regarding non-sufficient funds fees.
“Koskie Minsky LLP is pleased to announce that a proposed $10 million settlement has been reached with Canadian Imperial Bank of Commerce,” Koskie Minsky said in a release dated July 2. “The proposed settlement must be approved by the court before compensation is made available.”
The case took issue with CIBC’s practice of charging multiple NSF fees on re-presented pre-authorized debit transactions between Sept. 21, 2020 and May 31, 2024.
Multiple NSF charges
If a customer had insufficient funds for a pre-authorized payment, and if the billing company repeatedly attempted to withdraw the money owed, the bank would charge a fee for every failed transaction. The bank charges $10 for NSF on a personal Canadian account.
The Canadian government capped fees at $10 – down from previous highs of up to $50 – for personal and joint accounts at federally regulated financial institutions. These changes took effect on March 12 of this year.
Koskie Minsky LLP, who was appointed council for the class-action lawsuit, allege the practice violated consumer protection legislation and the bank’s customer contract.
If the settlement is approved, CIBC will directly deposit funds into the bank accounts of eligible class members. The class action was certified by the Ontario Superior Court of Justice in 2024.
“A hearing will be held on Oct. 19 where the court will decide whether to approve the proposed settlement,” the release said. “CIBC will review its records to identify all customers who are eligible for compensation. If you are eligible to receive compensation, you will receive a notice from CIBC. If the settlement is approved, you will not need to submit a claim – your compensation will be directly deposited in your CIBC or Simplii account.”
Koskie Minsky LLP has also pursued similar class action suits against the Bank of Montreal, Scotiabank, TD Bank and the Royal Bank.