RSSThe Consumer Financial Protection Bureau fined Cincinnati-based Fifth Third Bank $20 million for opening fake bank accounts and wrongfully triggering auto repossessions.
The bureau fined Fifth Third $5 million for forcing vehicle insurance onto borrowers who already had coverage and $15 million for reportedly opening fake accounts in their customers’ names.
Fifth Third reportedly charged fees that provided no value in more than 37,000 instances from 2011-20, leading to $12.7 million in illegal fees. According to the CFPB, more than half of Fifth Third auto insurance policies during the nine-year period were charged to borrowers who either maintained their own coverage or secured the requisite coverage within a 30-day timeframe of their previous policy lapsing.
“Fifth Third Bank conducted repossessions of vehicles when the delinquency was caused by the bank charging unnecessary and duplicative coverage,” according to the CFPB.
Fifth Third allegedly applied subsequent refunds to consumers’ outstanding loan balances instead of directly paying the borrowers. The $214 billion regional bank reportedly reinsured its coverage program and made a seven-figure sum from fees exceeding claims losses under the program.
The CFPB’s proposed order would ban Fifth Third Bank from setting sales goals “that incentivize fraudulently opening accounts.” A large regional bank, Fifth Third has 1,300 branches in a dozen states in the Midwest and Southeast.
“The CFPB has caught Fifth Third Bank illegally loading up auto loan bills with excessive charges, with almost 1,000 families losing their cars to repossession,” said CFPB Director Rohit Chopra. “We are ordering the senior executives and board of directors at Fifth Third to clean up these broken business practices or else face further consequences.”
