Fifth Third Bank’s customer service practices are under scrutiny after recent actions by the Consumer Financial Protection Bureau (CFPB). The CFPB found Fifth Third Bank engaged in illegal activities, including forcing unnecessary auto insurance on borrowers and opening fake accounts. These actions resulted in a $20 million penalty for the bank and redress for approximately 35,000 affected customers.
CFPB Takes Action Against Fifth Third Bank for Illegal Practices
The CFPB’s investigation revealed that Fifth Third Bank illegally charged borrowers for unnecessary and duplicative auto insurance, leading to repossessions in some cases. The bank also opened unauthorized accounts in customers’ names, a practice incentivized by employee sales goals.
Forced Auto Insurance and Repossessions
Fifth Third Bank forced auto loan borrowers into unnecessary and duplicative insurance policies, resulting in extra fees and even repossessions. Over 50% of these policies were charged to borrowers who already had coverage or obtained it within the required timeframe. This practice led to over $12.7 million in illegal fees for customers, while Fifth Third Bank profited from refunds applied to outstanding loan balances and reinsured coverage programs. The CFPB found that nearly 1,000 families lost their cars due to repossessions triggered by these unnecessary charges.
Unauthorized Account Openings
The CFPB also filed a lawsuit against Fifth Third Bank for opening fake accounts in customers’ names. This practice, driven by a “cross-sell” strategy to increase product sales, violated consumer trust and financial regulations. The CFPB is seeking a $15 million penalty and a ban on sales goals that encourage such fraudulent activities.
Consequences for Fifth Third Bank
The CFPB ordered Fifth Third Bank to pay $20 million in penalties: $5 million for the forced auto insurance and a proposed $15 million for the fake accounts. The bank must also provide redress to the approximately 35,000 customers harmed by these practices. This includes refunds for illegal fees and compensation for those who lost their vehicles due to wrongful repossession.
The CFPB’s actions highlight the importance of strong customer service practices and adherence to consumer protection laws in the banking industry. Fifth Third Bank’s past actions, including discriminatory auto loan pricing and illegal credit card practices in 2015, further underscore the need for ongoing scrutiny and accountability. These enforcement actions aim to prevent future misconduct and ensure fair treatment for all banking customers.
Seeking Help with Third Fifth Bank Customer Service Issues
Consumers who have experienced issues with Fifth Third Bank’s customer service, including forced auto insurance, unauthorized accounts, or other concerns, can file a complaint with the CFPB online or by phone. The CFPB provides resources and assistance to help consumers resolve financial disputes and protect their rights.
