Two Canadian banks have agreed to pay out $37.5-million dollars in a class action settlement involving overcharging of credit card fees.
Consumer advocacy group Option Consommateus says they've reached an agreement in principle with Bank of America Canada, formally known as MBNA Bank of Canada, and Royal Bank of Canada. The banks agreed to the payout without admitting responsibility.
The deal is expected to be approved in court later next month. If that happens, about one million customers are expected to get a $12 credit in their account.
Option Consommateurs launched the class action in 2003 and it was authorized in 2007.
They alleged that the 12 banks in question raised credit card limits without customers' consent, that clients were not given the usual 21-day grace period to pay fees, had to pay miscalculated fees for going over their new limits or for cash advances. These measures violate the Consumer Protection Act.
The lawsuit continues against the 10 other banks: Bank of Montréal, TD Bank, Caisses Desjardins du Québec, CIBC, Scotia Bank, Banque Nationale, Laurentienne Bank, Banque Amex du Canada, Citibanque Canada, and Banque Le Choix du président.
For more information, contact Option Consommateurs or the lawyers handling the case.