Summary of proceeding #4

On April 22, 2025, the Bank of Montreal (BMO) paid the total penalty of $4M in the Notice of Violation issued by the Financial Consumer Agency of Canada (FCAC) on March 31, 2025. BMO committed two violations of its disclosure obligations under the Bank Act relating to personal deposit accounts. From 2010 to 2024, BMO provided inaccurate disclosures resulting from monthly plan fees being charged when these fees should have been waived or discounted. Additionally, between 2022 and 2024, BMO failed to clearly disclose information regarding when the monthly plan fees would begin.

The violations relate to BMO’s 2010 Discounted Banking Programs (Programs) which were designed to offer special benefits to Newcomers to Canada, Medical and Dental Students, Indigenous Banking clients, and participants of the Home Financing promotion. The customers from these groups who applied for the Programs in-branch received a written confirmation with an incorrect start date for the fee waiver. As a result, the customers were charged monthly plan fees that should have been waived or discounted.

The root cause of the violations relates to inconsistencies in employee adherence with procedures for applying the correct start date for the fee waivers and BMO’s monitoring measures and controls failing to detect this issue. BMO estimates that a total of 101,091 customers were financially impacted. BMO issued refunds and redressed interest to impacted customers totalling $3,027,956.44 and, for the amount that could not be refunded to accounts, BMO made a charitable donation of $601,570.17. The total penalty amount of $4M reflects, among other criteria, the degree of BMO’s negligence in failing to implement adequate controls and effective monitoring measures to prevent and detect the error, despite receiving over 500 customer complaints about the monthly plan fees charged.