A wide range of alleged illegal activities has cost Fifth Third Bank hefty penalties, according to a statement released yesterday by the Consumer Financial Protection Bureau (CFPB).

An alleged repeat offender, Fifth Third Bank harmed approximately 35,000 customers when it forced vehicle insurance onto borrows who already had the coverage. As a result, about 1000 customers had their cars repossessed.

Specifically, CFPB’s found that Fifth Third Bank illegally triggered repossessions and charged illegal fees by forcing loan borrowers into unnecessary and duplicative coverage policies.

Between July 2011 and December 2020, more than 50 percent of the policies were charged to borrowers who had either always maintained their own coverage or obtained the requisite coverage within a 30-day timeframe of their prior policy lapsing.

The CFPB found that in more than 37,000 instances, Fifth Third Bank illegally charged fees that provided no value.

In some instances, the policy was duplicative of coverage borrowers already had on their vehicles.

Others involved the consumer obtaining the requisite coverage within 30 days of lapse and did not have the force-placed policy canceled in its entirety.

Borrowers paid over $12.7 million in illegal, worthless fees, as a result.

While consumers received coverage with no value, the CFPB alleges Fifth Third Bank profited. When unnecessary or duplicative coverage was cancelled, borrowers were entitled to a refund of the illegally charged fees. Instead of refunding the money directly to borrowers, Fifth Third Bank applied the refunds to consumers’ outstanding loan balances.

Fifth Third was also found to have reinsured its coverage program and profited millions by getting paid fees that far exceeded any claim losses under the program.

The CFPB is ordering Fifth Third Bank to pay a $5 million penalty for the forced coverage purchase.

In addition, the consumer watchdog agency also filed a proposed court order that would require Fifth Third Bank to pay a $15 million penalty for opening fake accounts in the names of its customers.

Both penalties will be deposited to the CFPB’s victims relief fund.

The proposed court order bans Fifth Third Bank from setting employee sales goals that incentivize fraudulently opening accounts.

“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,” said CFPB Director Rohit Chopra. “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 Bancorp is a large bank holding company with $214 billion in assets headquartered in Cincinnati, Ohio.

It operates approximately 1,300 branches in 12 states, primarily in the Midwest and Southeast, offering financial services including credit cards, mortgages, home equity lines of credit and auto loans.

The second of the two actions announced today resolves the CFPB’s March 2020 lawsuit against Fifth Third Bank for creating fake customer accounts and using a “cross-sell” strategy to increase the number of products and services it provided to existing customers.

In 2015, the CFPB took two actions against the bank – one for discriminatory auto loan pricing, through a joint CFPB and U.S. Department of Justice action, and the other for illegal credit card practices.

For the discriminatory auto loan pricing action, Fifth Third Bank was ordered to pay $18 million to harmed Black and Hispanic borrowers.

For the illegal credit card practices, the bank was ordered to pay $3 million to harmed consumers and a $500,000 penalty.