Fifth Third Bank fined $20M over opening unauthorized accounts, selling unneeded car insurance

Fifth Third fine overview:

• Who: The Consumer Financial Protection Bureau announced a $20 million fine against Fifth Third Bank over its allegedly illegal practices.
• Why: Fifth Third Bank NA employees allegedly opened bank accounts without customer authorization and imposed unnecessary auto insurance coverage on car buyers.
• Where: The fine was imposed by the Consumer Financial Protection Bureau.

According to a stipulated final judgment and order filed by the Consumer Financial Protection Bureau, Fifth Third Bank’s allegedly illegal practices have resulted in a $20 million fine.

According to the CFPB, bank employees allegedly opened customer accounts without their authorization and forced auto insurance onto borrowers with existing coverage.

The CFPB also alleged Fifth Third Bank failed to act quickly to assist more than 800 consumers who had accounts opened by employees without proper authorization after the bank learned of the issue in 2010.

Fifth Third Bank reportedly only attempted to address the issue after the CFPB sued the bank in 2020.

CFPB orders Fifth Third bank fine, improved business policies

In addition to the fine, the bank also agrees to shift its policies away from unrealistic performance management practices or sales goals that incentivize employees to open unauthorized accounts.

According to the CFPB, Fifth Third Bank also agrees to maintain records showing that customers authorized newly opened accounts and to set forth procedures for addressing customers’ questions and complaints.

The CFPB filed a consent order alleging the bank forced auto insurance policies on borrowers with existing auto insurance policies or borrowers who obtained insurance within 30 days after their previous policy lapsed.

Additionally, the CFPB alleges that Fifth Third Bank charged extra fees for the redundant coverage and repossessed vehicles when the fees caused them to become delinquent on payments.

“The CFPB has caught the 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.

“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.”

Fifth Third was also recently hit with a class action lawsuit alleging the bank charges fees for deposited checks that bounce.

Is the $20 million Fifth Third fine an adequate penalty? Tell us your thoughts in the comments.

Meghan Sherman Cater, Leanne E. Hartmann, Lane C. Powell, Jacob Schunk, William Hinton and Stephanie B. Garlock represent the CFPB in this action.

The Fifth Third lawsuits are Bureau of Consumer Financial Protection v. Fifth Third Bank NA, Case No. 1:21-cv-00262, in the U.S. District Court for the Southern District of Ohio and In the Matter of: Fifth Third Bank NA, Case No. 2024-CFPB-0006, before the Consumer Financial Protection Bureau.

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