CIBC settles lawsuit over Visa foreign currency charges
CIBC said Friday it has settled a class-action lawsuit that claimed the bank charged Visa credit card holders improper fees on foreign currency transactions.
The bank said the settlement, which must still get court approval, will see it pay at least $16.5 million, including $13.5 million to card holders.
CIBC did not admit any wrongdoing or liability as part of the settlement.
The plaintiffs in the suit alleged that the conversion of transactions from a foreign currency resulted in an undisclosed or inadequately disclosed mark-up. The mark-up was added to the VISA International wholesale conversion rate to obtain the Canadian dollar equivalent for foreign transactions.
If approved at an Oct. 7 court hearing, CIBC Visa cardholders could start getting credits beginning in December. The credits will range from 72 cents up to $14.32, depending on the type of credit card and how long the cardholder has had the account.
The bank will also make a donation of at least $1 million to the United Way on behalf of cardholders, and give $1.65 million to the Class Proceedings Fund of the Law Foundation of Ontario. CIBC will also pay $3 million to the plantiffs' lawyers.
CIBC shares were up 27 cents at $66.47 on the TSX.