Scotiabank customers refunded $80,000 for negative option billing

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The Financial Consumer Agency of Canada has censured Scotiabank for negative option billing in a breach of regulations.

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The agency says Scotiabank opened thousands of customer accounts despite never being asked, to according to Blacklock’s Reporter .

“Regulations require that a bank first obtain a person’s express consent before providing them with a product or service,” wrote Agency head and Commissioner Judith Robertson.

“The purpose of the requirement for express consent is to allow consumers to make informed financial decisions. Providing consumers with a product without their express consent denies them this opportunity and therefore introduces harm. Scotiabank was negligent.”

Scotiabank was cited for improper sales practices for a five-month period in 2018 and the agency suspected it may have gone on for years.

As a result of the investigation, Scotiabank refunded $80,000 in fees and interest charges to 5,600 account holders but no penalty was levied.

On May 6, Rogers Bank, an online division of Rogers Communications, was fined $250,000 for breach of the same Negative Option Billing Regulations.

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And the Bank of Montreal in 2020 was fined $500,000 for improper sales of optional insurance to credit card customers.

In 2000, Parliament looked at a private Liberal bill to ban all negative option billing but it lapsed in the Senate banking committee.


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