One big bank may be forced to pay out to more than 52,000 Canadians if a lawsuit targeting allegedly unfair mortgage penalties succeeds.
Business in Vancouver reported earlier this month that the representative plaintiff, Erin Sherry of Victoria, was charged $47,869 in fees when she tried to get out of her ten year mortgage in the second year. The bank charged the fee because rates had fallen since she signed.
Speaking to BIV, Sherry’s lawyer, Kieran Bridge, explained that there are two arguments to get out of paying the fee: that the language was so vague it renders the contract “legally unenforceable” and that the bank’s math was “improper.”
“The mathematical formula that the bank used is improper,” Bridge told BIV. “If an appropriate formula was used then the penalty would have been less.”
The class action suit includes anyone who has obtained a mortgage through CIBC and its affiliate brands – FirstLine Mortgage and President’s Choice – unless they choose not to participate.