Superior Court Justice Clement Gascon ruled Thursday on three class-action suits filed by consumers against institutions such as American Express, the Royal Bank of Canada, Toronto Dominion Bank and more...
MONTREAL - Nine banks and a federation of credit unions have been ordered by Quebec Superior Court to pay back millions of dollars in credit card fees charged to consumers when purchases made in foreign exchange were converted to Canadian dollars.
But how and when about a million Quebec card holders will get their money has yet to be determined.
After rendering judgments Thursday in three separate class-action suits involving the Royal Bank of Canada, Toronto Dominion Bank, Bank of Montreal, Canadian Imperial Bank of Commerce, Scotiabank, National Bank of Canada, Laurentian Bank of Canada, Amex Bank of Canada, Citibank Canada and the federation of Desjardins credit unions, Justice Clement Gascon asked that the parties reconvene within 30 days to work out the details.
Consumers will be entitled to a percentage - up to 2.5% - on charges that were converted from foreign exchange into Canadian dollars, including purchases made over the Internet. But that payment could be a long time coming, especially if the banks in question decide to appeal Justice Gascon's decisions.
Lawyers for the banks didn't return phone calls Thursday.
Philippe Trudel, a lawyer representing plaintiffs in two of the suits, said the judgments are huge victories for consumers, since banks have been told to repay approximately $200-million, and also obey the Quebec Consumer Protection Act. Banks had argued they weren't subject to the act because they are federally chartered institutions, Mr. Trudel said.
In one of the class-actions, against Amex Bank of Canada, the plaintiffs argued that prior to December, 2003, Amex didn't inform card users about the commission, let alone tell them the rate. The company simply converted the charge on credit cards to Canadian dollars using an exchange rate that it unilaterally chose. It also applied a commission of between 1 and 2.2%, which was included in the charge in Canadian dollars.
The judge agreed with the plaintiffs, saying that for 10 years, Amex "failed to disclose the commission that it was nevertheless collecting from" consumers. Justice Gascon concluded that the plaintiffs in the class-action suit are entitled to restitution of $13,097,896 in commission paid between March 1, 1993 and March 1, 2003.
The plaintiffs were also seeking $10-million in punitive damages, an amount that Amex lawyers argued was exaggerated and unjustified.
In the end, the judge decided on $2.5 million, or about $75-$100 per card holder.
"While it is true that under the circumstances, the conduct of Amex can hardly be qualified as anti-social or particularly reprehensible or intolerable, it still remains that for an interval of 10 years, it clearly disregarded its obligations under the Consumer Protection Act," the judge wrote.
In the case against the Desjardins group of credit unions, the judge ruled that the fees charged to consumers between April 17, 2000 and Dec. 31, 2007, were illegal and contravened the Consumer Protection Act. He ordered that $28,392,240, plus interest, be reimbursed, but he didn't award any punitive damages. For the other banks, Gascon ordered they pay back different amounts, varying from $4,055,630 for the Bank of Nova Scotia to $36,261,380 for the Royal Bank of Canada.
Some of the banks also have to pay certain cardholders $25 in punitive damages.
Montreal Gazette