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Wed August 9, 2006 EST
RITA TRICHUR
TORONTO (CP) - Bank of Montreal (TSX:BMO) along with its BMO Nesbitt
Burns Inc. and BMO Trust Co. divisions are named as defendants in a $100
million class-action lawsuit over foreign currency costs charged to
certain registered accounts.
The proposed action, announced Wednesday, is being launched James
MacDonald on behalf of all former and current BMO clients who held
Registered Retirement Savings Plans, Registered Retirement Income Funds
or Registered Education Savings Plans and incurred foreign currency
conversion charges on those accounts since June 14, 2001.
"The statement of claim alleges that the defendants have systematically
converted foreign currency in these accounts to Canadian currency
without instructions from the customers, and without there being any
need to do so, based upon revisions to the Income Tax Act that came into
effect on June 14, 2001," MacDonald's lawyers said in a release.
"In effecting all currency conversions, the defendants levy an
undisclosed conversion fee in addition to the amount that they actually
pay to buy or sell currency."
The claim also alleges that BMO failed to change its operational
practices after income tax changes allowing RRSPs, RRIFs and RESPs to
hold foreign currency as an investment.
The allegations have not been proven in court and a bank spokesman could
not be immediately reached for comment.
The claim seeks damages for all the fees charged in association with the
unauthorized conversion and the repayment of all the hidden
foreign-exchange fees on transactions where the customer did authorize a
conversion of funds but did not agree to pay the hidden fee.
MacDonald is being represented by Paliare Roland Rosenberg Rothstein LLP.
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