Class Action Lawsuit Against BMO Harris: Ponzi, Data Breach, Overdraft

Class action lawsuits against BMO Harris Bank (now operating as BMO Bank N.A.) have covered overdraft fees, a data breach, cybercrime losses, website tracking, disability discrimination, and unpaid vacation pay, alongside a separate trustee suit tied to the Petters Ponzi scheme that produced a billion-dollar verdict before being wiped out on appeal. Settlement amounts on record include $9.4 million for overdraft practices in the United States, roughly $21 million for a 2018 data breach in Canada, and $400,000 for a federal disability discrimination case. Several cases remain active.

The Petters Ponzi Scheme Case (Kelley v. BMO Harris Bank)

The largest case tied to BMO Harris is not a consumer class action but a trustee lawsuit stemming from Thomas Petters’ multibillion-dollar Ponzi scheme. Petters ran fake consumer electronics wholesaling through Petters Company Inc. from 1994 to 2008, moving money through a checking account at M&I Marshall and Ilsley Bank, which BMO Harris later acquired. Petters was convicted of wire fraud, mail fraud, money laundering, and conspiracy, and sentenced to 50 years. PCI pleaded guilty to wire fraud and conspiracy in 2010.¹

Douglas A. Kelley, appointed federal equity receiver for PCI and later its Chapter 11 bankruptcy trustee, sued BMO Harris in November 2012. The complaint alleged M&I Bank processed roughly $74 billion in wire transfers through PCI’s account, ignored anti-money-laundering alerts, ghost-wrote letters on bank letterhead to legitimize the operation, created special overdraft policies for the account, and never filed a Suspicious Activity Report.²

The Verdict and Its Reversal

After a 17-day trial in November 2022, a jury found BMO Harris liable for aiding and abetting breaches of fiduciary duty. The jury awarded $484,209,716 in compensatory damages and $79,533,392 in punitive damages. The district court added $483,679,075 in prejudgment interest and $109,600 in costs, pushing the total judgment past $1 billion.³

On September 12, 2024, a three-judge panel of the U.S. Court of Appeals for the Eighth Circuit unanimously reversed the verdict. The court applied the doctrine of “in pari delicto,” which bars a plaintiff from recovering when equally at fault. Because PCI existed solely to run the Ponzi scheme, and because Kelley brought suit as a bankruptcy trustee (stepping into the debtor’s shoes) rather than as a receiver, the defense barred the claims entirely. The court remanded with instructions to enter judgment for BMO.³⁴

Rehearing before the full Eighth Circuit was denied on November 14, 2024. Kelley petitioned the U.S. Supreme Court on February 12, 2025, and the Court declined to hear the case on May 27, 2025.⁵ On July 22, 2025, the district court awarded BMO $3.1 million in costs, including over $3 million for appeal bond premiums. As of September 2025, the BMO Litigation Trust reported roughly $16,000 in total available funds, leaving Petters’ creditors nothing from the reversed judgment.³

Overdraft Fee Class Action ($9.4 Million Settlement)

BMO Harris agreed to pay $9.4 million to settle a class action alleging it manipulated debit card transactions to maximize overdraft fees. The case was part of the multidistrict litigation captioned In re Checking Account Overdraft Litigation, Case No. 09-02036, in the U.S. District Court for the Southern District of Florida. Plaintiffs alleged the bank authorized transactions on accounts without sufficient funds and processed them from highest to lowest dollar amount rather than in chronological order, triggering more overdraft charges than customers would otherwise have incurred. The settlement was filed in late 2011. BMO Harris denied the claims but agreed to resolve the litigation.⁶⁷

In June 2022, BMO announced it would eliminate non-sufficient fund fees and overdraft transfer fees and reduce its remaining overdraft fees. As of 2024, a separate investigation was examining the bank’s prior NSF fee practices, though no formal lawsuit had been filed in connection with that inquiry.⁷

2018 Data Breach Class Action ($21 Million Settlement)

On May 28, 2018, the Bank of Montreal disclosed that hackers had breached accounts belonging to 113,151 Canadian customers. Stolen data included account numbers, balances, transaction histories, employment information, birth dates, and social insurance numbers.⁸

A class action, Mallette v. Bank of Montreal (CV-18-76745), was filed in Ontario. In April 2021, the Ontario Superior Court approved a settlement valued at $21,223,075 for the BMO portion of the case, with a net settlement fund estimated at about $9 million after legal fees and administration costs. The case was part of a joint proceeding that also covered a related CIBC breach, with a combined value of roughly $23 million.⁹

Compensation was tiered by the severity of exposure. Customers whose personal information (including birth dates and social insurance numbers) was posted online received $1,000 each. Those whose sensitive identifiers were accessed but not publicly posted received $144. Class members who also suffered unauthorized transactions received an additional $270. All class members could claim further compensation for time spent dealing with the breach, at $18 per hour up to fixed limits. Settlement checks were mailed in January 2022.⁹ Outside the class settlement, BMO had already spent $5.45 million on customer notifications, credit monitoring, and identity protection, and reimbursed clients over $6.85 million for money stolen through unauthorized transactions following the breach.⁸

Pending Cybercrime and Unauthorized Transfer Claims

Separate from the 2018 breach, more than 140 BMO customers in Canada organized in 2024 to pursue a class action alleging the bank failed to protect their accounts from cybercriminals. The group reported collective losses exceeding $1.5 million from unauthorized e-transfers, wire transfers, and fraudulent bill payments, with individual losses ranging from $15,500 to over $63,000.¹⁰

BMO declined to reimburse these customers, citing that the transfers appeared to be authorized because they originated from the customers’ own devices, used correct passwords, and in some cases matched the customers’ IP addresses. The affected customers argued the bank failed to flag clearly suspicious patterns, such as rapid sequences of wire transfers draining entire accounts.¹⁰ A statement of claim was issued on March 11, 2024, by the firm Benesh Bitz & Co., alleging breaches of the bank’s duty of care. The case is in the information-collection and certification stage.¹¹

Website Tracking Privacy Class Action

In May 2025, California resident John Tasker filed a proposed class action against BMO Bank N.A. in the U.S. District Court for the Central District of California, Tasker v. BMO Bank NA, Case No. 5:25-cv-01304. The suit alleges BMO embedded pixel trackers from Meta Platforms and Google on its website, which collected user data such as IP addresses, click paths, and session timestamps and transmitted that data to third-party advertising platforms without customer consent, in violation of the California Invasion of Privacy Act.¹² A joint notice of settlement was filed on September 25, 2025. The settlement terms and dollar amount have not been publicly disclosed.¹³

EEOC Disability Discrimination Case ($400,000 Settlement)

In September 2012, the U.S. Equal Employment Opportunity Commission sued BMO Harris in the Northern District of Illinois, EEOC v. Harris Bank, Case No. 12-cv-7793, alleging the bank violated the Americans with Disabilities Act by firing disabled employees at the end of their medical leave instead of offering reasonable accommodations. The EEOC claimed the bank failed to consider alternatives such as job transfers or extended leave for workers unable to return to their original positions.¹⁴

The case was resolved by consent decree entered on May 2, 2013. BMO Harris paid $400,000 to 14 former employees, with individual payments ranging from $25,000 to $37,500. The bank also agreed to revise its accommodation policies to allow job transfers as a form of reasonable accommodation, hire “Accommodation Consultants” to handle requests from employees returning from medical leave, and provide ADA training to human resources and management staff for two years. The decree did not constitute an admission of liability.¹⁵

Canadian Vacation Pay Class Action

A class action led by former BMO Private Wealth Consultant Paul Cheetham alleges BMO systematically underpaid statutory vacation and holiday pay to employees who earned variable compensation, including commissions and bonuses. The suit claims the bank calculated these benefits from base salary rather than total compensation, in violation of the Canada Labour Code. The certified class covers approximately 30,000 federally regulated employees who worked as Private Wealth Consultants or Mortgage Specialists between January 1, 2010, and December 31, 2018.¹⁶

The British Columbia Supreme Court certified the class action in July 2023. On October 31, 2025, the BC Court of Appeal upheld certification of the breach of contract claim but struck the breach of good faith component, finding that BMO’s conduct did not demonstrate “intent, malice or blatant disregard” and noting that a federal labour referee had previously approved the bank’s calculation methods in 2015. The breach of contract claim remains active and headed for trial.¹⁶

1
U.S. Courts. Kelley v. BMO Harris Bank National Association, Nos. 23-2551, 23-2632
2
U.S. Supreme Court. Kelley v. BMO Harris Bank N.A., Petition for Writ of Certiorari, No. 24-874
3
California Lawyers Association. Reversal of $1 Billion Judgment: Kelley v. BMO Harris Bank N.A.
4
ABA Banking Journal. Eighth Circuit Reverses $563 Million Verdict Against BMO Harris
5
Law360. High Court Passes on Axed $563M BMO Harris Ponzi Verdict
6
Salt Lake Tribune. In Re Checking Account Overdraft Litigation
7
Top Class Actions. BMO Harris Bank Stopped NSF Fees but May Have Previously Unlawfully Charged Them
8
Rogers Partners LLP. Court Approves $23 Million Settlement of Bank Cyber Breach Class Actions
9
Ontario Superior Court of Justice. Mallette v. Bank of Montreal, 2021 ONSC 2924 – Settlement Approval
10
CBC News. BMO Customers Transfer Theft Cybercrime
11
Benesh Bitz & Co. BMO Bank of Montreal Class Action
12
Banking Dive. Truist Settles Web Tracker Lawsuit
13
Bloomberg Law. BMO Bank Agrees to Settle Consumer Suit Over Meta Info Sharing
14
EEOC. BMO Harris Bank to Pay $400,000 to Resolve EEOC Disability Lawsuit
15
University of Michigan Civil Rights Litigation Clearinghouse. EEOC v. Harris Bank, Consent Decree
16
HRD Canada. Partial Court Win for BMO in Class Action Lawsuit