Fifth Third Bank to pay $5 million to settle auto insurance allegations
What allegations did Fifth Third Bank settle?
Fifth Third Bank settled allegations of forcing auto loan customers into duplicative car insurance policies, leading to more expensive monthly payments and, in some cases, vehicle repossession. The bank agreed to pay $15 million to address these allegations and an additional $5 million for auto finance issues.
How did the duplicative insurance policies affect customers?
The duplicative insurance policies forced auto loan customers to pay for unnecessary coverage, making their monthly payments more expensive. This led to some customers falling delinquent on their loans, and around 1,000 families had their cars repossessed due to the additional financial strain.
What consequences did Rohit Chopra warn of for Fifth Third Bank?
Rohit Chopra, the CFPB Director, warned Fifth Third Bank of further consequences if they failed to clean up their broken business practices6. This was in response to the bank's illegal activity of forcing auto loan customers to buy unnecessary car insurance policies and opening fake accounts, which led to over 1,000 families losing their cars to repossession.