Fifth Third Bank Gets $20M CFPB Fine
Fifth Third Bank was ordered to pay $20 million in fines by the Consumer Financial Protection Bureau for forcing auto insurance onto customers who were already covered and opening fake accounts in customers’ names.
The CFPB ordered the Cincinnati-based bank holding company to pay $5 million for more than 37,000 illegal car insurance charges, which the agency said resulted in nearly 1,000 families having their vehicles repossessed. The agency also filed a court order requiring the bank to pay a $15 million penalty for the use of “cross-selling” strategies to sell additional products to existing customers.
Fifth Third also will be required to repay 35,000 harmed customers and will be banned from implementing the employee sales practices that the agency said incentivized the fake account openings.
Fifth Third did not immediately respond to a request for comment.
The CFPB said the auto insurance enforcement action covers more than $12.7 million in illegal fees paid between July 2011 and December 2020. More than half were allegedly charged to customers who had either always maintained coverage or obtained new coverage within a month of their previous policy lapsing.
The cross-selling penalty stems from a 2020 lawsuit alleging that the bank violated multiple laws including the Consumer Financial Protection Act and the Fair Credit Reporting Act.
The CFPB said it will deposit both penalties in its victims’ relief fund.
