Regulator’s move puts discounted accounts and home financing clients under sharper scrutiny
The Financial Consumer Agency of Canada (FCAC) imposed a $4 million penalty on Bank of Montreal after finding the lender charged monthly plan fees that should have been waived or discounted for more than 100,000 customers over a 14‑year period.
According to FCAC’s summary of proceeding, the case traced back to BMO’s 2010 discounted banking programs for newcomers to Canada, medical and dental students, Indigenous banking clients and participants in a home financing promotion.
For customers who enrolled in branches, written confirmations showed an incorrect start date for the fee waiver, leading to charges on accounts that were marketed as discounted or fee‑free.
In total, 101,091 customers were financially affected between 2010 and 2024. BMO refunded about $3.03 million and made a charitable donation of roughly $602,000 where funds could not be returned directly.
“Accurate disclosure is a foundational element of the consumer protection provisions of the Bank Act,” the FCAC said in its news release.
“For consumers to make informed financial decisions, they must be provided information that is accurate and, at a minimum, meets legal requirements.”
The agency found that BMO employees did not consistently follow procedures for setting the correct start date for fee waivers. The bank’s controls also did not catch the issue even after more than 500 complaints about incorrect monthly plan fees.
It said the $4 million penalty reflected the degree of BMO’s negligence in not putting adequate controls and effective monitoring in place to prevent and detect the error.
BMO, which paid the penalty and closed the matter, emphasized that it already compensated impacted customers.
“We hold ourselves to the highest standards of conduct. We proactively reimbursed our customers and reported to the [FCAC]. We’re pleased to have this matter behind us,” BMO spokesperson Jeff Roman said in an emailed statement.
Last year, FCAC fined Toronto‑Dominion Bank $5.5 million over cost‑of‑borrowing disclosure failures on mortgages, home equity lines and other loans after an error in recalculating payments when borrowers changed frequency.
Meanwhile, in 2025, BMO reported full‑year net income of $8.73 billion, up 19% from $7.33 billion a year earlier, with earnings per share rising to $11.44 from $9.51.
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