Consumer Financial Protection Bureau Files Federal Suit Against Fifth Third Bank

Fifth Third Bank has been accused of opening unauthorized accounts and enrolling consumers in unauthorized products and services.

(Washington, D.C.) - A civil suit was filed against Fifth Third Bank yesterday by the Consumer Financial Protection Bureau. 

This suit claims that Fifth Third opened deposit and credit-card accounts in consumers’ names, transferred funds from consumers’ existing accounts to new and improperly opened accounts, enrolled consumers in unauthorized online-banking services, and activated unauthorized lines of credit on consumers’ accounts without the consumers' knowledge or consent. 

The Bureau alleges that for several years Fifth Third has violated the Consumer Financial Protection Act’s prohibition against unfair and abusive acts or practices, the Truth in Lending Act, and the Truth in Savings Act and their implementing regulations.

In a press release from the Consumer Financial Protection Bureau, it was said that over an eight year period, Fifth Third used a "cross-sell" incentive-based strategy to increase products and services to existing customers. The Bureau says that after Fifth Third became aware of the situation involving employees opening unauthorized consumer-financial accounts, they did not take the proper steps to stop the behavior and remediate involved customers. 

It is believed by the Bureau that these incentives led employees to become involved in misconduct to meet goals and earn additional compensation. 

The Bureau is seeking to stop Fifth Third's "unlawful conduct," redress for affected consumers, and the imposition of a civil money penalty.

Fifth Third defends itself in an press release stating that customers have been treated fairly and they are confident that this trial will end in their favor. 

“Fifth Third Bank respects and values the important role that the CFPB plays in protecting consumers but believes that the civil suit filed today is unnecessary and unwarranted. The Bank will defend itself vigorously and is confident in the outcome,” said Susan Zaunbrecher, Chief Legal Officer of Fifth Third Bank.

“Fifth Third’s compensation and employee incentive structure does not reward retail employees for opening unauthorized accounts, nor does it give them sales quotas or product-specific targets. Our controls are designed to prevent and detect unauthorized account openings. For almost a decade, our incentive compensation system has focused on account quality. In fact, it claws back compensation from employees for accounts that are unused or closed shortly after they were opened.”

“After an investigation spanning more than three years and involving nearly half a billion pieces of data produced by the Bank, the CFPB has not informed us of any unauthorized accounts beyond the fewer than 1,100 accounts that the Bank itself identified out of 10 million – or approximately 0.01 percent of accounts opened between 2010 and 2016. These accounts involved less than $30,000 in improper customer charges that were ultimately waived or reimbursed to customers years ago. While even a single unauthorized account is one too many, we took appropriate and decisive action to address each situation.”

Ms. Zaunbrecher further stated, “The Bank is confident that it has treated its customers fairly. When a federal court examines the evidence, we believe it will agree with Fifth Third that this is a limited and historical event. The Bank will press for an early trial.”