Fifth Third Bank has been slapped with a hefty $20 million fine by the Consumer Financial Protection Bureau for engaging in fraudulent activities such as opening unauthorized accounts in customers’ names and forcing unnecessary auto insurance onto borrowers who already had coverage. As a result, over 35,000 consumers were harmed, with 1,000 individuals even having their cars repossessed due to these deceptive practices. CFPB Director Rohit Chopra has called out Fifth Third Bank for its unethical behavior and has demanded that senior executives and board members rectify these broken business practices immediately.
The $20 million penalty includes $15 million for the fake account violations that were the subject of a previous CFPB lawsuit, as well as an additional $5 million for forcing loan borrowers into redundant insurance policies. The agency found that more than half of the policies charged to borrowers between 2011 and 2020 were unnecessary, resulting in over $12.7 million in illegal fees and, in some cases, vehicle repossession. Fifth Third Bank, headquartered in Cincinnati, has agreed to the settlement terms, which require them to adhere to stricter policies under CFPB supervision to ensure that affected customers receive appropriate remediation for the harm caused by the bank’s actions.
Despite the recent fine and penalties imposed by the CFPB, Fifth Third Bank asserts that it has already taken significant steps to address these issues and is committed to putting its customers first. The bank aims to move forward by focusing on creating long-term value for its shareholders, customers, employees, and communities. This marks the second time Fifth Third Bank has faced fines from the CFPB, with previous penalties for discriminatory auto-lending practices and illegal credit card schemes.
