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 (NSF) fees.
The proposed $10 million settlement 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 NSF fees on re-presented pre-authorized debit transactions between September 21, 2020, and May 31, 2024.
According to the allegations, 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 bank charges $10 for NSF on a personal Canadian account.
The Canadian government has capped fees at $10 for personal and joint accounts at federally regulated financial institutions, down from previous highs of up to $50. These changes took effect on March 12 of this year.
Koskie Minsky LLP, who was appointed as counsel 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 will be held on 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. If you are eligible to receive compensation, you will receive a notice from CIBC. If the settlement is approved, you will not need to submit a claim – your compensation will be directly deposited in your CIBC or Simplii account.
Koskie Minsky LLP has also pursued similar class-action suits against other financial institutions, including the Bank of Montreal, Scotiabank, TD Bank, and the Royal Bank of Canada.
