US Consumer Protection Bureau Penalizes Fifth Third Bank $20 Million For Fake Accounts
It acted against the bank in 2015 over allegations of discriminatory auto loan pricing and illegal credit card practices
By: : Linda John
Update: 2024-07-09 19:00 GMT
US Consumer Protection Bureau Penalizes Fifth Third Bank $20 Million For Fake Accounts
It acted against the bank in 2015 over allegations of discriminatory auto loan pricing and illegal credit card practices
The US Consumer Financial Protection Bureau (CFPB) has fined Ohio lender Fifth Third Bank $20 million for allegedly opening fake customer accounts and forcing auto insurance on consumers, who already have coverage.
It ordered the bank to pay redress to 35,000 consumers, including 1,000 whose cars were repossessed. The bank would be banned from using sales practices, as the act was akin to a racket.
In a statement, the CFPB director Rohit Chopra said, "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.”
The watchdog for consumer financial protection stated that Fifth Third Bank charged millions in illegal fees and triggered auto repossessions between 2011 and 2020. It forced the borrowers into unnecessary and duplicative insurance coverage.
While taking further action, the CFPB held that it would resolve a 2020 lawsuit against the bank for its sales strategies resulting in the creation of phony customer accounts.
Fifth Third Bank has been slapped with a $5 million fine for the alleged auto insurance-related violations. Pending the judge's order, it was penalized $15 million for opening unauthorized accounts.