The Fifth Third Bank is once again in a delicate scenario with the Federal Office of Consumer Protection. On July 9, the government firm filed a proposal for a final judgment and issued an order that, if approved by the court, would require the bank to pay a combined civil penalty of $20 million and compensate approximately 35,000 victims directly affected by its fraudulent business practices.
A lawsuit, first filed through the CFPB in March 2020, accused Fifth Third Bank of turning a blind eye to nearly a decade of illegal activity among bank employees, adding bank account opening, transaction attrition, and the registration of consumers for products and facilities without their consent. Training
The second order accused the bank of enforcing auto insurance policies on borrowers who already had good enough coverage. These policies increase monthly payments, unnecessarily resulting in additional fees, chargebacks, and car repossessions.
Here’s what you want to know about bank misconduct and the consequences you face.
Fifth Third Bank, a giant regional bank in the U. S. Cincinnati-based company faces significant civil penalties because its workers engage in the following misconduct, of which the bank has been aware since at least 2008:
In addition, Fifth Third workers burdened their consumers with auto insurance, resulting in illegal fees and about 1,000 wrongful vehicle repossessions. More than a portion (50%) of consumers have been charged for auto insurance policies even though they already had a policy or received the required policy within 30 days.
According to the CFPB, an incentive pay program tied to sales goals, functionality reviews, and, in some cases, unreasonable employment caused bank workers to engage in unfair and abusive acts or practices. in violation of several laws, including the Consumer Financial Protection Law.
The proposed $20 million fine is as follows:
In addition, the bank’s senior supervisors and board of directors will have to address business practices that have led to widespread abuses, or face new sanctions.
“These practices cause significant emotional and mental distress, beyond monetary losses,” said Mark Shayani, an attorney with Pacific Attorney Group. “Fake accounts expose consumers to identity theft and monetary fraud, eroding public acceptance as true in the banking system. »
Fifth Third Bank is no stranger to investigations. In 2015, discriminatory pricing of auto loans and illegal credit cards cost the bank a combined $21 million.
It’s also not the first time the CFPB has accused a bank of unjustified garnishments. In 2022, he uncovered similar illegal activity at Wells Fargo, resulting in a $3. 7 billion settlement plus damages paid to affected customers.
The multimillion-dollar fine, as well as the risk of additional consequences if Fifth Third does not implement good enough monitoring and oversight, is worth prompting the bank to improve its business practices. However, there are many wonderful banks to choose from. if you are looking for a new account. Fifth Third Bank wants time to make amends and demonstrate that its business practices will not harm consumers in the future.
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