State Street will pay nearly $54 million in restitution and penalties to resolve allegations that the company overcharged many clients for certain services that were supposed to be billed on an “out-of-pocket” basis.

Attorney General Maura Healey announced yesterday that under the terms of the deal, State Street will pay restitution to customers expected to exceed $48 million and a penalty of $5.5 million to the state, in addition to agreeing to changes in its business practices.

The AG’s Office will monitor the restitution process, which must be completed in 90 days.

“It’s important that SWIFT customers are treated fairly,” Healey said in a statement. “Our office will continue monitoring the reimbursement process to help ensure that every client is paid what they are owed.”

The Society of Worldwide Interbank Financial Telecommunication, or SWIFT, is a messaging service used by financial institutions to transmit financial information and client instructions.

State Street, which acts as a custody bank for certain mutual fund clients and investment companies, overcharged clients instead of billing them on an “out-of-pocket” basis. These charges, which consisted mainly of bills for the use of the SWIFT messaging system, were in many instances charged at rates far greater than State Street’s out-of-pocket cost to deliver the service.

While for many clients the charge for SWIFT fees may have been accurate at first, State Street failed to update the rate over time as the cost for the services decreased. This resulted in what certain senior State Street personnel described as a “mark-up” of the actual SWIFT expense.

As noted by one vice president at the company, “The issue is we make money on this product, not charged at the true costs.”

State Street did lower the charge – from $5 to $0.25 – after reviewing the matter, but only charged that reduced, more accurate rate to new clients or clients that State Street had not previously charged for SWIFT.

Absent client-specific exemptions, other customers continued to pay $5 per message. As late as 2015, State Street secured a contract renewal with a client by offering to reduce the client’s SWIFT costs going forward, without disclosing to the client that State Street had overcharged the client for SWIFT for years.

State Street clients were overcharged by approximately $170 million from 1998 to 2015. The company has been repaying those clients and this settlement will complete the reimbursement process for SWIFT overcharges.