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A class action lawsuit alleging that certain Bank of Montreal subsidiaries charged certain account holders hidden fees has resulted in a court ordering BMO to pay back the profits made on those fees.
The BMO class action lawsuit claimed that approximately 200,000 RRSP, RESP, and tax-free account holders paid undisclosed fees resulting in $102.9 million in profits for the bank. The fees were allegedly assessed between 2001 and 2011.
The complaint was lodged 14 years ago against BMO subsidiaries Nesbitt Burns and BMO InvestorLine. The plaintiffs alleged that, despite marketing that the banks were “transparent” with clients, Class Members were not told about how much they would be charged in markup fees on currency conversions.
According to the BMO class action lawsuit, the BMO subsidiaries breached their duty to clients by not disclosing the markup fees. The fees, alleged the complaint, were the result of a change in federal law that allowed Class Members to hold foreign currency in their RRSP, RESP, and other tax-free accounts.
The plaintiffs allege that over $100 million in fees were collected, resulting in a $400 million in equivalent return on equity lost to Class Members.
The BMO class action lawsuit was certified by an Ontario court in 2012. Class Members include all current and former Nesbitt Burns and InvestorLine clients who are also residents of Canada. Class Members must have held a registered account with either of the BMO subsidiaries and been charged fees on the purchase or sale of investments in foreign currency in their registered accounts or paid dividends or interest in a foreign currency, or had foreign currency converted into Canadian dollars through their account. The activity must also have occurred between June 14, 2001 and Sept. 6, 2011 for Class Members who were clients with InvestorLine and between Oct. 1, 2002 and Sept. 6, 2011 for Nesbitt Burns clients.
During the nearly fourteen years that the BMO class action lawsuit was litigated, the Ontario court ruled that the banks had breached their fiduciary duty and trust toward their customers; however, the court decided not to impose punitive damages.
“There is no evidence of any malicious, oppressive or high-handed conduct that offends the courts sense of decency,” said the recent court order requiring BMO to disgorge profits from the fees.
In the face of the ruling, BMO representatives told Canada.com that they intend to appeal.
Were you charged hidden fees by BMO subsidiaries? Tell us your experience in the comment section below!
Top Class Actions will post updates to this class action settlement as they become available. For the latest updates, keep checking TopClassActions.com or sign up for our free newsletter. You can also receive notifications when this article is updated by using your free Top Class Actions account and clicking the “Follow Article” button at the top of the post.
The plaintiffs and Class Members are represented by Paliare Roland Barristers.
The BMO Hidden Fees Class Action Lawsuit is James Richard MacDonald, et al. v. BMO Trust Company et al., Case No. 06-CV-316213 CP in the Ontario Superior Court of Justice, Canada.
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4 thoughts onBMO Ordered to Pay Back Profits on Undisclosed Fees Charged to Canadian Customers
I have paid insurance on all cards and bio insurance on account
Due to COVID I have not worked since April as to being deemed non essential. And now in second lockdown
Have been forced to go on pension
I have sent a million forms to mutual and now to new company who took over mutual and nothing has happened
They just keep resending forms
Cards are max out now as ytyey dropped credit available not sure what to do
being charged bank fees even after having required amount in account for no charge.
After being denied an overdraft they repeatedly charged me bank fees u till money was in my account. My balance would be in the negative, they would take 15 dollars in fees then turnaround charge me NSFs and then overdraft protection fee. I spoke to supervisors on more then one occasion then they said a payday loan I had come into my account via etransfer was fraudulent and they closed my account. Even after I told them the etransfer came from speedy cash.
They also would double charge me for online purchases because I had a debit mastercard.