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US watchdog to fine Fifth Third $20 million over fake accounts and auto insurance

2024.07.09 11:46

(Reuters) – The top U.S. watchdog for consumer financial protection said Tuesday it would fine Ohio lender Fifth Third Bank $20 million for allegedly opening fake customer accounts and forcing auto insurance on consumers who already had coverage, among other allegations.

The U.S. Consumer Financial Protection Bureau also said it would order Fifth Third to pay redress to about 35,000 harmed consumers, including 1,000 who had their cars repossessed, and ban the bank from using sales practices the agency said act as an incentive to commit fraud.

A company representative did not immediately respond to a request for comment.

“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,” CFPB Director Rohit Chopra said in a statement.

According to the CFPB, Fifth Third charged millions in illegal fees and triggered auto repossessions between 2011 and 2020 after forcing borrowers into unnecessary and duplicative insurance coverage of no value.

In a second action announced Tuesday, the CFPB said it was moving to resolve a 2020 lawsuit against Fifth Third alleging that bank sales strategies resulted in the creation of phony customer accounts.

© Reuters. FILE PHOTO: Fifth Third Bank logo is seen in this illustration taken, April 23, 2024. REUTERS/Dado Ruvic/Illustration/File Photo

Fifth Third must pay a $5 million fine for the alleged auto insurance-related violations and, pending a judge’s order, another $15 million for opening unauthorized accounts.

Tuesday’s announcement follows two CFPB enforcement actions against Fifth Third in 2015 over allegations of discriminatory auto loan pricing and illegal credit card practices.



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