The Royal Bank of Canada has received an administrative monetary penalty of $4.25 million, applied by The Financial Consumer Agency of Canada for a violation of the Bank Act.
According to a summary of proceeding released Thursday by the federal agency, RBC violated a consumer provision by failing “to transfer credits from deactivated credit card accounts to customers’ new accounts.”
“As a result, these customers received inaccurate monthly credit card statements, and some customers incurred additional charges,” the Financial Consumer Agency (FCAC) said.
The FCAC said the violation occurred when RBC deactivated and migrated customer’s credit card accounts to a new one when fraud was reported.
Between 2001 to 2024, a total of 227,947 accounts were impacted by the violation, the federal agency said.
According to the summary, the accounts were affected by statements that contained inaccurate information on the amounts credited or charged, including interest rates, and which dates credit amounts were posted to the accounts.
As a result, RBC transferred and refunded $22,427,774.30. RBC also made a charitable donation of $299,000 for the customers that could not be located.
“The root cause of the violation was inadequate and ineffective control and oversight procedures and operational challenges with processes and proper reporting,” the FCAC wrote.
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 FCAC says accurate disclosure is a “foundational element of the consumer protection provisions of the Bank Act” and that customers “must be provided information that is accurate” in order to make informed financial decisions.
