RBC error sees Montreal property owners slammed by fines

Several Montreal homeowners were fined this month for failing to pay their property taxes on time, even though it appears the missed payments were due to a mistake by the Royal Bank of Canada.

One of the property owners, Christina Tong, was fined more than $600 for missed payments on her three Montreal properties.

Tong paid her fines, but she said that's not the issue. She wonders how many people have paid up without realizing they aren't to blame.

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Tong said she had arranged to make her property tax payments through online banking back in February, shortly after municipal tax notices were issued.

But earlier this month, she received notices that her tax bills were unpaid. She promptly paid them, along with the fines.

At a dinner party shortly after she received the notices, she discovered her friends and their neighbour were also fined for missing the payment deadline.

They, too, thought they had arranged for payments to be made online back in February and were surprised to receive notices and fines for non-payment.  

After sharing their experiences, they realized they all bank with RBC and doubted it was a coincidence.

City points finger at RBC

The due date for the first instalment of municipal taxes is March 1, with a final instalment due June 1. A monthly interest rate and daily penalty are charged after the deadline. 

To avoid paying fines, the city's website encourages homeowners to pre-program their tax payments through online banking.

In a statement to CBC, the city explained that they deal with one intermediary: Desjardins.

Every year, Desjardins instructs other banks to delete the previous year's payee account numbers in their respective databases.

This year's deadline for deleting the account numbers was Jan. 29, which RBC agreed to.

But on Feb. 12, RBC wrote back to Desjardins asking if they needed to clear their database.

At that point, the city said, homeowners had already arranged their tax pre-payments. When RBC went ahead erasing the previous year's account numbers, they also deleted pre-payments set up for this year.

"Erasing the tax account numbers later had the effect of erasing a preprogrammed payment," the city said. They also said they haven't seen this problem with any other financial institution.

How many affected by issue?

RBC customer service told Tong they would cover the fines. All she had to do was to bring her overdue notices to her branch.

She went in on Tuesday last week and was told she'd be contacted within 48 hours.

Thursday morning, while speaking to CBC News, Tong's branch manager called and said hers was the only known case, and it would be investigated further.

But Vincent Poirier said he's another Montreal homeowner who experienced the same problem. 

Poirier described himself as being obsessive when it comes to paying his bills. He's been using RBC's online banking system for almost 10 years, so the city's overdue notice and the $155 penalty came as a shock.

Poirier said the bank deleted his City of Montreal payee account number along with the prepayments he had scheduled.

"I get fined because of that?" Poirier said. "That's not my fault. Someone has to pay for that, and it won't be me."

RBC spokesperson Denis Dubé called it an "administrative issue."

When asked if customers would be reimbursed for interest and penalty charged by the city, Dubé said the bank would investigate on a case-by-case basis.

One homeowner with a private banking arrangement with RBC — often reserved for high-wealth clients —  told CBC News that she was reimbursed in the span of a week.

"Money talks," Tong said about her friend's reimbursement awarded by private banking.

Following the publication of this story, Christina Tong said RBC informed her that she would be reimbursed for the interest and penalties she was charged by the City of Montreal.