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RBC to repay $22M in excessive fees

June 27th, 2017  |  Canadian Business

The Royal Bank of Canada has agreed to pay back money it obtained by charging clients excessive fees. The sum totals nearly $22 million in overcharges, plus almost $1 million to the Ontario Securities Commission, which performed the investigation. 

The excessive charges were made on mutual funds and investerment products, and were deemed to have not been "Detected or corrected in a timely manner," as stated in the OSC report referenced by the CBC

Trailer fees embedded inside fee-based accounts, adding to the overall charges made against client accounts, led to the excessive payments. In other cases, customers who qualified for lower fixed fees were not made aware that they had a cheaper alternative payrate for the service they were currently using.

According to the settlement document, clients were improperly charged as far back as 2005. In total, it is estimated that more than 50,000 RBC clients were made to pay excessive fees. 

Though the incident stands as a black mark against the RBC name, it fits as part of a worrying trend that includes numerous Canadian financial institutions. According to the report, the OSC "Has reached no-contest settlements with eight financial firms including Bank of Montreal, TD, Scotiabank and CIBC in recent yeard for doing similar things."