CIBC overcharged customers $24M

CIBC said Thursday it would refund to customers $24 million in "erroneous" overdraft and mortgage charges

Canadian Imperial Bank of Commerce (TSX:CM)said Thursday it would refund to customers $24 million in overdraft and mortgage charges it had made in "error".

The bank said it had discovered during a review of its accounts incorrect overdraft protection and residential bridge loans charges.

CIBC's embarrassing admission that it erroneously charged its customers extends a series of costly public relations debacles that began last year.

Last December, CIBC agreed to pay $80-million US to settle allegations the bank "aided and abetted" the accounting scandal at Enron.

In February, a top executive was charged in connection with illegal U.S. mutual fund trading, followed shortly thereafter by the sudden resignation of David Kassie, CIBC's top investment banker and heir apparent to the bank's embattled chief executive John Hunkin.

CIBC plans by July 16 to have reimbursed all affected accountholders. The average payment to users of CIBC's personal overdraft protection plan would be about $5.50 including interest, the bank said.

The payments for users of the residential bridge loan product would vary, according to the bank, which added that it would also try to contact all former customers who may have been affected.

The total payout would be about $24 million, said CIBC.

"This is being done as part of CIBC's effort to correct its error and to ensure that it distributes to customers all of the money it received in error," the bank said.

CIBC shares were down 1 cent to $65.55 in afternoon trading on the Toronto Stock Exchange.