The Financial Consumer Agency of Canada (FCAC) announced a C$6.5m ($4.6m) fine leveraged against TD Bank in July over accusations that employees had not entered customers’ annual credit card rebates from September 1, 2001, to June 29, 2022. TD is ruled to have violated the Cost of Borrowing (Banks) Regulations (in effect until 2022) and the Financial Consumer Protection Framework Regulations (in effect after 2022).

TD’s noncompliant behavior led to an “approximate financial impact of $71,723,694.49,” on 255,886 customers, according to the FCAC’s summary of proceeding.

The agency blamed TD’s “inadequate procedures,” which included a lack of effective compliance monitoring, for the long-term problem.

The FCAC stated that the degree of harm, and TD’s history of previous instances of misconduct, were considered in determining the fine’s severity. The agency is empowered to impose a maximum penalty of C$10m on corporate entities,

The summary notes that TD is reimbursing customers for the fault, and that funds which cannot be credited will be distributed to charity.

TD in the crosshairs

The report of this penalty comes after Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) fined TD C$9.185m in May over its severe breaches of anti-money-laundering (AML) laws. That penalty was FINTRAC’s largest, reflecting the severity and scope of TD’s noncompliance.  

Some have critically noted Canada’s comparatively modest enforcement frameworks when compared with their counterparts in America and Europe. Denis Meunier, a former deputy director of FINTRAC, has called for creating the ability to leverage increased fines for gross negligence.

But although the fines from Canadian regulators are anemic compared to the massive $3.09 billion in combined penalties leveraged by a host of US regulators last month, they underscore TD’s recurring problem of failing to engage proper detection protocols for noncompliant activities.