Royal Bank of Canada (RBC) has expressed regret over an error that caused it to label some of its mortgages as being on an accelerated payment plan even though they were not.
Last fall, RBC sent letters to some of its clients who had recently renewed their mortgages with the bank and had chosen an accelerated payment plan that allows them to pay down the loan quicker than other options. But the plan they signed up for was actually not the quickest payment option available.
"The language of our mortgage renewal agreement stated that your payment type was 'accelerated' even though the mortgage payment you chose was not an accelerated payment type," the letter said.
RBC said it is working with clients to rectify the situation.
"We contacted clients to explain the discrepancy to them, assured them that the payments, terms and amortization periods remain the ones they selected at the time of renewal and that principal and interest payments were correctly applied. We regret any client inconvenience and encourage them to contact us with questions," said RBC spokesperson AJ Goodman.
Goodman said they discovered the discrepancy through one of their regular business reviews. However, he declined to specify how many of the bank’s $247 billion worth of mortgages were improperly labelled as accelerated, according to a CBC report.