The Canadian Imperial Bank of Commerce, commonly known as CIBC, has agreed to pay $10 million as part of a proposed settlement in a class-action lawsuit involving non-sufficient funds fees, also known as NSF fees.
The case focused on how CIBC charged fees on certain pre-authorized debit transactions that were submitted more than once.
What the Class-Action Lawsuit Was About
The proposed settlement relates to CIBC’s practice of applying NSF fees to re-presented pre-authorized debit transactions.
A re-presented transaction happens when a payment that initially fails because of insufficient funds is submitted again for processing.
The lawsuit challenged whether CIBC should have charged NSF fees in those situations.
Time Period Covered by the Settlement
The class-action lawsuit covered NSF fees charged on re-presented pre-authorized debit transactions between September 21, 2020, and May 31, 2024.
Customers affected during this period may be included in the proposed settlement, depending on the final approval process and eligibility rules.
Proposed Settlement Amount
CIBC has agreed to pay $10 million under the proposed settlement.
The agreement does not necessarily mean the bank has admitted wrongdoing. Proposed class-action settlements often require court approval before money can be distributed to eligible class members.
Why NSF Fees Matter to Customers
NSF fees can be costly for bank customers, especially when the same failed payment is attempted more than once.
For consumers, the case highlights concerns about how financial institutions apply fees when automatic or pre-authorized payments are returned because of insufficient funds.
CIBC has agreed to a proposed $10 million settlement in a class-action lawsuit concerning NSF fees charged on re-presented pre-authorized debit transactions.
The case covers fees applied between September 21, 2020, and May 31, 2024. While the settlement still requires the appropriate approval process, it could provide relief to eligible customers affected by CIBC’s NSF fee practices during that period.