Risk & Compliance

CFPB Alleges Fifth Third Bank Opened Fake Accounts

The complaint said the practice continued from 2008 through at least 2016.
Lauren MuskettMarch 10, 2020

The Consumer Financial Protection Bureau (CFPB) has filed a complaint against Fifth Third Bank, alleging the company opened bank accounts and credit card accounts for customers and charged fees without consent.

In a complaint filed in the U.S. District Court for the Northern District of Illinois, the CFPB said the bank ignored repeated warnings that employees were opening unauthorized accounts and used a cross-sell strategy that conditioned employee performance ratings on meeting ambitious sales goals.

“Despite knowing since at least 2008 that employees were opening unauthorized consumer-financial products and services, Fifth Third took insufficient steps to properly implement and monitor its program, detect and stop misconduct, and identify and remediate harmed consumers,” the CFPB said in its complaint.

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The CFPB is seeking compensation for the defrauded customers and assistance in amending credit reports that were damaged. It is also seeking a civil penalty and other fines.

Fifth Third’s chief legal officer, Susan Zaunbrecher, said the complaint was “unnecessary and unwarranted” and the bank would “defend itself vigorously” and would be “confident in the outcome.”

The CFPB said the bank’s illegal practices continued through at least 2016.

The complaint alleges eight counts of violations of federal consumer protection and banking laws.

“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,” Zaunbrecher said.

The allegations against Fifth Third came as the House Financial Services Committee prepared to hold hearings on Wells Fargo, which admitted to opening customer accounts and charging fees without consent. Democratic members of the Committee have said Wells Fargo failed to meet the terms of legal settlements while also faulting regulators for failing to adequately oversee the bank.

Two members of Wells Fargo’s board of directors resigned Sunday ahead of the scheduled hearing.