The plaintiff claimed the bank violated consumer protection laws
The Ontario Superior Court of Justice has certified a class action lawsuit against the Canadian Imperial Bank of Commerce (CIBC) for allegedly charging duplicative non-sufficient funds (NSF) fees.
The certification follows a motion by the plaintiff, who claimed the bank violated consumer protection laws by imposing multiple NSF fees on re-presented pre-authorized debits (PADs) and bounced cheques.
The plaintiff alleged that CIBC charged duplicative NSF fees when payees attempted to process already-rejected PADs or cheques a second time. According to the plaintiff, the bank's standard form contract does not permit such duplicative charges, allowing only the first NSF fee. The lawsuit claimed this practice violates Ontario’s consumer protection legislation and results in unjust enrichment for the bank while disproportionately impacting low-income Canadians.
The statement of claim sought damages for breach of contract, equivalent to all monies paid by the plaintiff and class members due to the duplicative NSF fees. It also sought an order to disgorge the value of all monies allegedly paid illegally by the class members, punitive damages, and an equitable rate of interest and costs.
The Superior Court granted the certification under the Class Proceedings Act (CPA). The plaintiff needed to meet the criteria outlined in s. 5(1) of the CPA, including disclosing a cause of action, identifying an identifiable class, raising common issues, demonstrating that a class proceeding is the preferable procedure, and providing an adequate representative plaintiff.
The class is defined as all personal deposit account holders with CIBC who were charged a non-sufficient funds fee on re-presented PAD transactions between September 21, 2020, and May 31, 2024. The court noted that this definition is based on objective criteria, ensuring that potential class members can be identified without referencing the merits of the action.
The court found that the common issues raised in the claim—whether the bank’s standard form contract prohibits charging NSF fees on re-presented PAD transactions, whether the bank was unjustly enriched by these fees, and whether aggregate damages can be awarded—are substantial and capable of advancing the litigation.
The court determined that a class proceeding is preferable for resolving these common issues. Individual actions would be impractical and inefficient, given the likely modest individual losses and the burden on court resources. The class proceeding aligns with the goals of behaviour modification, access to justice, and judicial economy.
The court found the proposed representative plaintiff to be adequate, with no conflicts of interest and a clear understanding of her role and obligations.
The court concluded that the criteria under s. 5(1) of the CPA were met, certifying the action based on the consent order filed by the parties. The class action will proceed to address the allegations of duplicative NSF fees charged by CIBC.
