TD reaches NSF fee class action settlement

Five of the Big Six banks face proposed class action lawsuits over their practice of repeatedly charging fees for failed pre-authorized debit (PAD) transactions, and TD Bank is now the first to settle.

The bank, along with class action law firm Koskie Minsky LLP, announced it reached a proposed settlement of a class action, which alleged that the bank improperly charged non-sufficient funds fees on PAD transactions.

Under the proposed settlement, which is subject to court approval, the bank will pay $15.9 million. A hearing has been set for Feb. 13 for the Ontario Superior Court of Justice to consider the settlement.

The bank did not admit liability in the settlement, and continues to deny wrongdoing.

“We believe that this is an excellent result for the class,” said Adam Tanel, partner with Koskie Minsky, in a release.

“Most importantly, once the settlement is approved by the court, the settlement we negotiated provides that class members will receive their pro rate share of the settlement funds directly deposited into their TD bank account without having to file any additional paperwork or jump through any additional hoops. It took a lot of work, on both sides, to get this deal done. We’re pleased with the outcome,” he said.

Four of the other big banks — Bank of Montreal, Bank of Nova Scotia, CIBC and Royal Bank of Canada — face similar suits. In those cases, statements of claim have been issued, but they haven’t been certified as class actions.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.