Ohio Bank Slapped With $20M Fine Over Duplicate Car Insurance

You might reasonably get the impression that applying for a car loan is akin to walking through a minefield. But thanks to the Consumer Financial Protection Bureau, it’s a lot more fair to the customers of this Ohio bank. Via CBS News:

The Consumer Financial Protection Bureau (CFPB) slapped Fifth Third Bank with a $20 million fine on Tuesday for allegedly forcing auto loan customers to buy unnecessary car insurance policies, and in some cases repossessing their vehicles when they defaulted.

“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,” Director Rohit Chopra said in a statement Tuesday. 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.

Employees at the Ohio-based bank also illegally opened fake bank accounts for roughly 35,000 customers without their knowledge or consent under a “cross-sell” sales goal initiative from top management, the CFPB alleged. Fifth Third bank managers and branch-level employees had their performance reviews and overall employment tied to meeting sales goals of offering more products to existing customers, CPFB officials said. The fine settles a March 2020 lawsuit CFPB filed against Fifth Third which centered on the unauthorized bank accounts.

In a related story, the American Prospect featured a very useful piece this month, “Escape From the Box,” about the tactics routinely used by car dealers to load up car prices with additional costs. You’ll feel a lot better prepared to buy a car after you read this.

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