Scotiabank's $10.45M NSF Fee Settlement: What Canadians Need to Know

If you bank with Scotiabank and have had a payment bounce in the last few years, you may be entitled to money you didn't ask for. In June 2026, the Ontario Superior Court of Justice approved a $10.45 million class action settlement against The Bank of Nova Scotia (Scotiabank), resolving a lawsuit over duplicate non-sufficient funds (NSF) fees. Roughly 148,000 customers are eligible, with an average payment of about $42.82 deposited automatically — no application required.

This explains what happened, who qualifies, how the payment works, and why this case is part of a much bigger shift in how Canadian banks are allowed to charge NSF fees going forward.

Why it matters

NSF fees are one of the most common — and most misunderstood — bank charges in Canada. More than one in three Canadians pays at least one NSF fee in a given year, according to the Department of Finance Canada, and these fees have historically hit people living paycheque to paycheque the hardest: single parents, gig workers, renters, and recent immigrants building credit for the first time.

This settlement matters for two reasons. First, if you were a Scotiabank customer during the eligibility window, you may be owed real money with zero effort on your part. Second, it's a case study in a broader pattern: Canadian banks charging fees in ways regulators and courts have now decided go too far — and it happened at the same time Ottawa was rewriting the rules for NSF fees across the entire banking system.

What is an NSF fee?

An NSF (non-sufficient funds) fee is charged when a bank declines a payment — a cheque, a

pre-authorized debit, a bill payment — because there isn't enough money in the account to cover it. Historically, these fees ranged from $45 to $48 per occurrence at Canada's major banks, regardless of how small the shortfall was.

What Scotiabank was accused of doing

The class action, Canaan Alexander v. The Bank of Nova Scotia, centred on a specific pattern: when a merchant's pre-authorized debit failed due to insufficient funds, Scotiabank charged an NSF fee. If that same merchant then automatically retried the exact same payment — same amount, same transaction code, same or generic description — within 2 to 30 days, and it failed again, Scotiabank charged a second $48 NSF fee for what was effectively the same missed bill.

The claim argued this was unfair because customers have no control over whether or when a merchant chooses to resubmit a failed payment. A single missed subscription or membership payment could quietly cost $96 in fees rather than $48, without the customer necessarily realizing why.

Scotiabank has not admitted liability. The class action was certified on April 8, 2024, and the settlement was approved by the court on June 12, 2026.

Who is eligible

An "Eligible Class Member" under the settlement generally meets all of the following:

1. Resident of Canada.
2. A current, living personal deposit account holder with Scotiabank (BNS).
3. The Scotiabank account was open and able to accept deposits as of the distribution date.
4. Between June 21, 2020 and April 30, 2024, charged a $48 NSF fee on a pre-authorized debit between 2 and 30 days after already being charged a previous $48 NSF fee — from the same merchant, for the same dollar amount, with the same transaction code and the same (or a generic) transaction description.

Not eligible: anyone Scotiabank's records show was already reimbursed for the fee, or where the fee wasn't tied to a re-presented pre-authorized debit.

Only current personal account holders are covered under this settlement — unlike the earlier TD Bank settlement, which included former account holders as well. Anyone who closed their Scotiabank account before the distribution date won't receive an automatic deposit, but can still contact Class Counsel to ask about their situation.

How the payment works

There is nothing to do. Eligible Class Members have the payment — averaging approximately $42.82 — deposited directly into their account by Scotiabank. There's no claim form, no deadline to apply, and no need to prove anything.

Accepting the payment means being considered part of the class and bound by the settlement agreement, which releases any legal claims that individual may have had against Scotiabank for this specific issue. Any money left in the settlement fund after all eligible customers are paid goes to Second Harvest, a national food rescue charity.

A real Canadian example

Consider a Scotiabank customer with a $60 monthly gym membership set up as a pre-authorized debit. In a month where their account balance was short, the payment failed and they were charged a $48 NSF fee. Ten days later, the gym's payment processor automatically retried the same $60 charge — again unsuccessfully — triggering a second $48 NSF fee. That's $96 in fees for one missed $60 payment, and the customer likely had no idea the gym would even retry the charge. Under the settlement, that second fee is exactly the kind of charge being compensated.

Common mistakes to avoid

• Assuming an application is required. Many class action settlements require filing a claim by a deadline. This one doesn't — eligible customers are paid automatically. Be wary of anyone requesting personal or banking information to "process" this payment; Scotiabank won't ask for this.
• Ignoring a notice out of uncertainty about qualifying. A settlement notice means Scotiabank's own records flagged a likely match — no confirmation step is needed.
• Assuming this is the only settlement that applies. TD and RBC customers have already had similar duplicate NSF fee settlements paid out. CIBC reached a proposed $10 million settlement over similar claims in June 2026, awaiting a court approval hearing scheduled for October 19, 2026. A case against BMO remains unresolved, with no settlement reached as of mid-2026.
• Not checking whether NSF fees are still a risk going forward. Even outside this settlement, it's worth understanding the new rules below.

The bigger picture: Canada's new $10 NSF fee cap

Separately from this settlement, the federal government introduced new rules — effective March 12, 2026 — that changed NSF fees for every Canadian with a personal account at a federally regulated bank or credit union. Under the new Financial Consumer Protection Framework Regulations, overseen by the Financial Consumer Agency of Canada (FCAC):

• NSF fees are capped at $10 per occurrence, down from as much as $45–$50.
• Banks cannot charge more than one NSF fee within a 2-business-day period on the same account.
• No NSF fee can be charged if the shortfall is less than $10.

The government estimates this will save Canadians more than $600 million a year. In effect, the exact pattern that led to the Scotiabank lawsuit — two large fees stacked within days for one missed payment — is no longer legally possible at federally regulated banks. Business and corporate accounts are not covered by the cap.

Sources

• Koskie Minsky LLP — Scotiabank Duplicative NSF Fees Class Action, case page
• Financial Consumer Agency of Canada — New NSF fee regulations bring down cost of banking for Canadians
• Department of Finance Canada — Minister Champagne announces new $10 cap on NSF fees

This article is for general educational purposes only and does not constitute legal, financial, or tax advice. It is not affiliated with Scotiabank, Koskie Minsky LLP, or the Financial Consumer Agency of Canada. Facts described here are drawn from Koskie Minsky LLP's public case materials and government sources as of the last-updated date above, and have not been reviewed by legal counsel — details of an active legal settlement, including eligibility and contact information, can change. Before acting, confirm current details directly with Class Counsel or the official case page, and speak with a licensed insurance broker, tax professional, or lawyer about your specific situation.