Scotia reaches NSF fees class action settlement

A proposed class action against Bank of Nova Scotia over the alleged double charging of insufficient funds fees has tentatively been settled — making Scotia the third bank to settle a similar lawsuit.

The bank and plaintiffs’ lawyers, Koskie Minsky LLP, jointly announced that they’ve reached a proposed settlement that would see the bank pay $10.45 million to resolve the case, which was certified as a class action in Ontario on April 8, 2024.

The lawsuit alleged that bank customers were improperly charged duplicate insufficient funds fees on pre-authorized debit transactions that were attempted more than once.

Under the settlement, the bank continues to deny the allegations, and does not admit liability.

The proposed deal, which was reached with the involvement of a mediator, requires court approval — and a hearing before the Ontario Superior Court of Justice has been scheduled for June 12 to seek that approval.

If it’s approved, bank customers that were charged duplicate NSF fees on pre-authorized debits between June 21, 2020 and April 30, 2024, will each receive approximately $40 from the settlement. It’s expected that the bank will directly deposit funds into the accounts of eligible customers.

The settlement with Scotia follows previous deals to settle similar cases against TD Bank and Royal Bank of Canada in 2024 and 2025, respectively.

Koskie Minsky also still has cases outstanding against Bank of Montreal and CIBC. The allegations in those cases haven’t been proven, and they haven’t been certified as class actions yet.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.