Three class actions decisions (the Marcotte and
Adams files) were rendered on June 11, 2009 by the
Superior Court of Québec, ordering nine Canadian banks and
Desjardins to pay over 200 millions. Among the court's
Provincial consumer protection
legislation applies to federal banks in matters of credit and
The fees imposed by the banks for the
conversion of foreign exchange currency with credit cards for are
"credit charges" or "interests" within the
Québec Consumer Protection Act (CPA). They
are not part of the capital.
These cases pertain to three related (but separate) class
actions instituted by consumers against ten financial institutions,
namely, nine banks and Desjardins, with respect to the use of Visa,
MasterCard and American Express credit cards. The three cases
pertain more specifically to the legality of fees or commissions
charged to consumers' credit cards by such financial
institutions upon the conversion of foreign currency transactions.
The court decided the following:
The conversion fees or profit margins
charged to consumers by the banks and by Desjardins for foreign
currency transactions made using credit cards are "credit
charges" within the meaning of the CPA.
Given that the conversion fees are
"credit charges" within the meaning of the CPA,
certain banks failed to disclose such fees during the period or
part of the period to which the class actions pertain.
The members of the classes did not
waive their right to institute the class actions by paying such
The provisions of the CPA
and the regulation respecting its application that were invoked are
constitutionally applicable and operative as regards the banks,
notwithstanding exclusive federal jurisdiction over banking under
Section 91(15) of the Constitution Act, 1867 and the
doctrine of paramountcy.
By their conduct, the banks and
Desjardins contravened certain provisions of the CPA.
Consequently, the members of the groups concerned are entitled to
the reimbursement of conversion fees that were charged illegally.
The banks that omitted to disclose the conversion fees during a
certain period were also ordered to pay punitive damages.
McCarthy Tétrault Notes:
What is the importance of these decisions?
The sphere of provincial legislation
that could apply to federally regulated banks is now wider than
before, so banks should proceed with even greater caution,
especially in light of provincial consumer protection statutes and
The application to various banking
practices (such as the use of credit cards) of the notions of
"credit charge," "fee related to interest,"
"non-interest charge," "costs,"
"interest," etc. have now became unclear, whether they
are located in provincial or federal statutes.
McCarthy Tétrault LLP acted for the defendants National
Bank of Canada and The Bank of Nova Scotia. All three decisions are
currently under appeal before the Court of Appeal of
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).