No, the bankers weren’t donning ski masks, using screwdrivers to break windows, or hotwiring cars to skive off with them in the middle of the night. But according to the Consumer Financial Protection Bureau, Fifth Third Bank illegally repossessed the cars of over 1,000 families after forcing their customers to buy unneeded car insurance policies they couldn’t afford. CFPB has levied a $20 million fine against the bank, which it labeled a “repeat offender,” for its injustices, and has ordered the bank to redress about 35,000 affected customers.
“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.”
CFPB states that Fifth Third Bank illegally charged fees that provided no value at all. “In some cases, the policy was duplicative of coverage borrowers already had on their vehicles.” The statement elucidates that some 37,000 borrowers paid the bank over $12.7 million in “illegal, worthless fees.” In addition, any Fifth Third customer who requested the fees be cancelled, anything paid in was applied to the customers’ outstanding loan balances instead of to the customer directly.
More from CFPB:
Fifth Third Bank demanded borrowers pay for coverage they did not need or else face delinquency, additional fees, and repossessions. Fifth Third Bank conducted repossessions of vehicles when the delinquency was caused by the bank charging unnecessary and duplicative coverage.
In 2015 the CFPB and Department of Justice took joint action against Fifth Third for its discriminatory auto loan pricing. At that time the bank was ordered to pay $18 million to the Black and Hispanic borrowers that had been financially damaged by the practices.