The bank refunded $22.4 million and donated $299,000 to customers it could not locate
Nearly 228,000 RBC credit card accounts carried inaccurate monthly statements for more than two decades before the bank's regulator stepped in.
The Financial Consumer Agency of Canada fined the Royal Bank of Canada $4.25m for the failure, the agency said Thursday.
According to the FCAC, RBC committed one violation of its disclosure obligations under the Bank Act after it failed to transfer certain credits from deactivated credit card accounts to customers' new accounts when it migrated those accounts following fraud reports.
As a result, affected customers received inaccurate statements and some incurred additional charges.
The flawed statements misstated amounts credited or charged, including interest, along with the dates those amounts posted to accounts, CTV News reported.
The violation ran from 2001 to 2024 and affected 227,947 accounts.
The agency said RBC transferred and refunded $22,427,774.30 to customers and donated $299,000 on behalf of those it could not locate.
"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 in its summary of the case.
CBC News reported that Nathaniel Wallace, a spokesperson for RBC, said the lender takes its regulatory obligations seriously.
He said RBC self-reported the matter and co-operated with the regulator throughout.
"Where areas for improvement are identified, we act to address them," Wallace said in an email to the Financial Post.
The FCAC said the penalty reflected the significant harm to customers.
RBC paid the $4.25m on April 17, after the agency issued a notice of violation on March 18.
The agency said accurate disclosure underpins the consumer protection rules in the Bank Act and that it expects all federally regulated financial institutions to review its decisions and apply them to their own practices.
The fine was the second the FCAC levied against a big bank this year, according to the Financial Post.
The agency penalized the Bank of Montreal $4m in February over erroneous monthly plan fees on certain personal deposit accounts that it should have waived or discounted
