CIBC credit card customers may have been surprised to get a letter recently letting them know that they were improperly charged over limit fees on their credit card, possibly since 2003.
Tom Wallis, a CIBC spokesperson, said in an email that 1.4 million credit card accounts in Canada were affected and will automatically be receiving a refund. He added that the average refund is about $50.
Wallis said the issues have been corrected and that the bank is working with clients and regulators on the issue.
Wallis did not respond to a question about the cause of the overcharging, such as whether it was the result of a computer glitch.
A letter sent to one P.E.I. customer dated July 17 and signed by Jeff Smith, vice-president of CIBC Credit Cards, states that the refund is the result of a review between February 2003 and February 2017.
“Over limit fees are normally charged when your credit card balance exceeds your credit limit, however, it has been determined that these were incorrectly applied on some accounts in some instances,” says Smith in the letter.
The bank says customers will be receiving the refund plus interest. The interest is considered income for tax purposes.
CIBC also has information on the matter on its website, which indicates that refunds will occur between July and October.
Michael Toope, a spokesperson with the federal government’s Financial Consumer Agency of Canada, said the agency doesn’t comment on investigations. In the matter with CIBC, he wouldn’t comment on whether an investigation took place.
Toope explained the agency doesn’t comment on investigations because “an investigation may involve information regarding the business affairs of a regulated entity or of a person (or persons) dealing with one. FCAC is required to treat that information as confidential, except under specific conditions set out in the FCAC act.”
Peter Moorhouse, president and CEO of the Better Business Bureau in Halifax, said the incident serves as a reminder for organizations to review processes.
“Things can go on for a long time in a business, in any organization, just because they’ve always been done that way. So, I think one of the lessons that everybody can learn from this is if you’re in business, it is important to know what’s going on and review what’s going on. If processes are automated, specifically, I think there’s some work to be done there.”
Moorhouse added that there are lessons to be learned for consumers, such as pay close attention to your banking and credit card statements and know what are allowable charges and how to file a complaint.