Editor's Note: In an earlier version of the story it was reported National Bank was fined $3 million. In fact, the fine was $600,000..The Canadian Imperial Bank of Commerce (CIBC) was penalized with a $3-million fine on Thursday due to billing irregularities that impacted over 130,000 credit card customers..“The total number of customers affected and total dollar amounts involved were relatively high,” wrote regulators..“It is damaging to confidence in the financial system and the reputation of the Bank if breaches of consumer protection provisions are allowed to remain undetected and unremedied for extended periods,” wrote Commissioner Judith Robertson of the Financial Consumer Agency of Canada (FCA). The case involved credit card accounts over the period from 2003 to 2021..According to Blacklock’s Reporter, CIBC mishandled accounts of customers who reported lost or stolen cards, leading to instances of incorrect interest and fee charges..The Bank blamed “employee error,” “ineffective quality assurance” and “an automated process that failed.”.“Credit transactions were not always transferred properly when a credit card account was deactivated,” wrote Robertson. .“Credit cards are deactivated when reported lost or stolen or when reported as defrauded. In these circumstances, customers are provided with replacement cards and as part of the activation process, legitimate transactions are transferred from the deactivated account to the new, active account.”.“The failures of the control framework led directly to the breach and the harm to customers,” wrote Robertson. .“The penalty amount imposed will serve the purpose of specific and general deterrence and highlight the importance of effective testing and validation against consumer protection provisions when business changes are made.”.The bank paid $1.5 million in refunds and interest paid to its credit card users. The FCAC reported that 132,658 customers were impacted over 18 years..“There is no dispute on the evidence about the breach of regulations,” wrote Robertson. Evidence showed “a high level of harm.”.Robertson issued a fine of $600,000 against the National Bank due to two violations of the same regulations on Thursday. In her statement, she stated that the bank did not disclose its miscalculations of interest payments on almost a million loans..A total of 920,529 personal loans were impacted, resulting in customer expenses of $772,749. In response, the National Bank reimbursed all affected clients and provided them with an extra 10% as compensation. Additionally, the bank made “a contribution to charity where customers could not be identified.”.“Financial Consumer Agency staff alleged the Bank to have been negligent in failing to ensure accurate reporting,” wrote Robertson. .“The problem persisted for nearly 17 years from 2001 to 2018 despite being identified in 2010 and having put corrective measures in place at that time.”
Editor's Note: In an earlier version of the story it was reported National Bank was fined $3 million. In fact, the fine was $600,000..The Canadian Imperial Bank of Commerce (CIBC) was penalized with a $3-million fine on Thursday due to billing irregularities that impacted over 130,000 credit card customers..“The total number of customers affected and total dollar amounts involved were relatively high,” wrote regulators..“It is damaging to confidence in the financial system and the reputation of the Bank if breaches of consumer protection provisions are allowed to remain undetected and unremedied for extended periods,” wrote Commissioner Judith Robertson of the Financial Consumer Agency of Canada (FCA). The case involved credit card accounts over the period from 2003 to 2021..According to Blacklock’s Reporter, CIBC mishandled accounts of customers who reported lost or stolen cards, leading to instances of incorrect interest and fee charges..The Bank blamed “employee error,” “ineffective quality assurance” and “an automated process that failed.”.“Credit transactions were not always transferred properly when a credit card account was deactivated,” wrote Robertson. .“Credit cards are deactivated when reported lost or stolen or when reported as defrauded. In these circumstances, customers are provided with replacement cards and as part of the activation process, legitimate transactions are transferred from the deactivated account to the new, active account.”.“The failures of the control framework led directly to the breach and the harm to customers,” wrote Robertson. .“The penalty amount imposed will serve the purpose of specific and general deterrence and highlight the importance of effective testing and validation against consumer protection provisions when business changes are made.”.The bank paid $1.5 million in refunds and interest paid to its credit card users. The FCAC reported that 132,658 customers were impacted over 18 years..“There is no dispute on the evidence about the breach of regulations,” wrote Robertson. Evidence showed “a high level of harm.”.Robertson issued a fine of $600,000 against the National Bank due to two violations of the same regulations on Thursday. In her statement, she stated that the bank did not disclose its miscalculations of interest payments on almost a million loans..A total of 920,529 personal loans were impacted, resulting in customer expenses of $772,749. In response, the National Bank reimbursed all affected clients and provided them with an extra 10% as compensation. Additionally, the bank made “a contribution to charity where customers could not be identified.”.“Financial Consumer Agency staff alleged the Bank to have been negligent in failing to ensure accurate reporting,” wrote Robertson. .“The problem persisted for nearly 17 years from 2001 to 2018 despite being identified in 2010 and having put corrective measures in place at that time.”
