TD Bank made $31 MILLION by withholding seniors' rebates

According to a federal investigation, the Toronto-Dominion Bank withheld promised fee discounts from half a million seniors in Canada. The Bank yesterday was fined $400,000 for breach of the Bank Act but saved $31 million by withholding seniors' rebates.

"Over the six years the breach was ongoing, this is estimated to be approximately 500,000 customers and excess charges of approximately $31 million," wrote Commissioner Judith Robertson of the Financial Consumer Agency of Canada. "Toronto-Dominion does not dispute these totals."

The Agency said from 2012, the Bank introduced a fee schedule promising in the fine print a "seniors' rebate" for depositors over 60, the equivalent of 25 percent off monthly fees.

"The actual charge for eligible accounts held by seniors was not shown as a dollar amount, nor were there instructions provided regarding any specific action the customer needed to take in order to access the seniors' rebate," wrote Commissioner Robertson.

Investigators determined the Bank only paid the rebate if depositors spotted the reference "set out in a footnote" of the fee schedule, then explicitly asked for it, reported Blacklock's.

"Existing eligible customers and customers who became eligible were not automatically charged the lower rate," wrote Robertson. "Toronto-Dominion required that these eligible customers make a request."

A half-million seniors did not notice the footnote and never asked for the promised 25 percent discount, "a signal that something was not working," wrote Commissioner Robertson.

"As early as March 2013, Toronto-Dominion was aware many eligible seniors had not requested the rebate and were therefore not being charged the lower rate."

Bank executives said they did eventually post a note on a TD website and in 2017 rewrote fee schedules to delete all reference to a "seniors' rebate." The Bank attributed the lapse to "the result of a difference in interpretation made in good faith rather than indicating negligence or intent," wrote Commissioner Robertson.

Under the Bank Act, "A bank shall disclose to its customers and the public at the prescribed time and place and in the prescribed form and manner the charges applicable to deposit accounts with the bank and the usual amount, if any, charged by the bank for services normally provided."

Commissioner Robertson fined TD $400,000 for breach of the Act and Disclosure Of Charges Regulations. "There is no evidence of Toronto-Dominion intentionally misleading customers or intentionally denying the lower pricing," she wrote.

Robertson added: "Toronto-Dominion was negligent in not recognizing its disclosure document was non-compliant when it introduced the 'seniors rebate' language in 2012."