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The Financial Consumer Agency of Canada’s decision says Toronto-Dominion did not properly show seniors the amount of the discounted fees, or explain how to access the 25 per cent discount, over a six-year span that started in 2012.Nathan Denette/The Canadian Press

The federal financial consumer watchdog has levied a $400,000 penalty against Toronto-Dominion Bank for failing to fully disclose a discount on account fees to hundreds of thousands of seniors.

The Financial Consumer Agency of Canada’s (FCAC) decision says TD did not properly show seniors the amount of the discounted fees, or explain how to access the 25-per-cent discount, over a six-year span that started in 2012. About 500,000 TD customers were effectively charged a total of $31-million in excess fees over that period, according to the FCAC. That violated the Bank Act’s provision on disclosure of deposit account charges.

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TD reported the problem to the FCAC after discovering it in 2018 and fully reimbursed affected customers. But in her decision, FCAC commissioner Judith Robertson cited the length of time it took the bank to uncover the issue and the broad range of customers who were overcharged, as well as TD’s “violation history” in levying the fine and choosing to name the bank publicly.

“There is no evidence of TD intentionally misleading customers or intentionally denying the lower pricing to which they were entitled,” Ms. Robertson wrote. But the bank only discovered the problem six years after it started, when a client complained, indicating “a degree of negligence on the part of TD in fulfilling its regulatory obligations.”

TD spokesperson Carly Libman said in an e-mail the bank “moved swiftly to put a permanent solution in place, communicate both publicly and directly with customers to apologize for the inconvenience and reimburse customers, prior to direction from the FCAC.”

In 2012, TD changed the fees charged on seniors’ accounts, eliminating a free plan. Instead, it referred to a “senior’s rebate” in disclosure documents, explaining in a footnote that clients aged 60 and older could receive 25 per cent off account fees. The actual charge for seniors was not listed as a dollar amount, and even after TD revised the document in 2017, there were no instructions about how seniors could receive the rebate.

As a result, new clients who were eligible received the rebate automatically, but some existing clients who qualified – including some who turned 60 after opening their accounts – were not given the discounted rate. TD required those customers to request the rebate.

The seniors’ rebate is now automatically applied to all eligible customers with chequing accounts, Ms. Libman said.

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