The Canadian Imperial Bank of Commerce (CIBC) has agreed to pay millions of dollars in a proposed settlement of a class-action lawsuit regarding non-sufficient funds fees.
The proposed $10 million settlement, announced on July 2, must be approved by the court before compensation is made available to eligible class members.
The case took issue with CIBC's practice of charging multiple non-sufficient funds (NSF) fees on re-presented pre-authorized debit transactions between September 21, 2020, and May 31, 2024.
If a customer had insufficient funds for a pre-authorized payment and the billing company repeatedly attempted to withdraw the money owed, the bank would charge a fee for every failed transaction.
The Canadian government capped fees at $10 for personal and joint accounts at federally regulated financial institutions, effective March 12 of this year.
Koskie Minsky LLP, appointed council for the class-action lawsuit, alleges 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.
A hearing is scheduled for October 19, where the court will decide whether to approve the proposed settlement.
CIBC will review its records to identify all customers who are eligible for compensation, and if eligible, customers will receive a notice from the bank.
If the settlement is approved, customers will not need to submit a claim – their compensation will be directly deposited in their CIBC or Simplii account.
Koskie Minsky LLP has also pursued similar class-action suits against other major banks, including the Bank of Montreal, Scotiabank, TD Bank, and the Royal Bank.
