Fifth Third Bank illegally seized people's cars after overcharging them, feds say [View all]

Source: CBS News

Updated on: July 9, 2024 / 5:37 PM EDT


The Consumer Financial Protection Bureau (CFPB) slapped Fifth Third Bank with a $20 million fine on Tuesday for allegedly forcing auto loan customers to buy unnecessary car insurance policies, and in some cases repossessing their vehicles when they defaulted.

"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," Director Rohit Chopra said in a statement Tuesday. "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."

Employees at the Ohio-based bank also illegally opened fake bank accounts for roughly 35,000 customers without their knowledge or consent under a "cross-sell" sales goal initiative from top management, the CFPB alleged. Fifth Third bank managers and branch-level employees had their performance reviews and overall employment tied to meeting sales goals of offering more products to existing customers, CPFB officials said. The fine settles a March 2020 lawsuit CFPB filed against Fifth Third which centered on the unauthorized bank accounts.

As part of the CFPB's punishment, Fifth Third must compensate the 35,000 customers who had accounts opened in their names. The bank is also banned from creating sales goals that incentivize employees for opening fake accounts. Fifth Third must pay a $15 million penalty for opening the fake accounts and another $5 million for forcing customers who already had auto insurance to get duplicative coverage, CFPB officials said.

Read more: https://www.cbsnews.com/news/fifth-third-bank-cars-repossession-fine/