CFPB sues Fifth Third over alleged fake accounts, reminiscent of Wells Fargo scandal

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Fifth Third is the most recent bank to come under fire for allegedly opening fake accounts under customers’ names.

On March 9, the Consumer Financial Protection Bureau filed a lawsuit against Cincinnati-based Fifth Third Bank for reportedly opening credit card and deposit accounts without customers’ knowledge up until 2016 and as far back as 2008.

The suit, filed in the Northern District of Illinois, comes a few years after the bombshell news of Wells Fargo’s unlawful practices, resulting in a $142 million dollar settlement.

A summary of the lawsuit

Along with allegedly opening unauthorized accounts, the Bureau says Fifth Third employees transferred customers’ funds from existing accounts to unauthorized ones, opened lines of credit and registered customers for online banking services without their consent. These practices, according to the Bureau, were an attempt to increase product and service quotas for existing Fifth Third customers.

The Bureau also claims the bank was aware of these practices for a number of years without taking action to stop it and cites a violation of the Consumer Financial Protection Act, Truth in Savings Act and Truth in Lending Act.

Fifth Third denies any wrongdoing and says its compensation structure doesn’t include quotas or incentives to sell certain products. Instead, the bank claims compensation is tied to “account quality”.

Yesterday, Fifth Third released a statement detailing that out of the 10 million accounts reviewed by the CFPB, less than 1,100 were opened illegally.

“These accounts involved less than $30,000 in improper customer charges that were ultimately waived or reimbursed to customers years ago,” said Susan Zaunbrecher, Chief Legal Officer of Fifth Third Bank, in the statement. “While even a single unauthorized account is one too many, we took appropriate and decisive action to address each situation.”

Are you a Fifth Third customer? Here’s how you can protect yourself

Fifth Third customers can start by logging into their account to check for any changes to their balances or new accounts.

“If you find a suspicious credit card account, check your credit reports with Experian, Equifax and TransUnion at AnnualCreditReport.com,” says Ted Rossman, industry analyst at Bankrate.

You can then file a dispute on your credit report if you find an unauthorized credit card account has been opened using your information. It’s important to note any bank accounts opened in your name won’t appear in your credit report.

As an additional measure, report your situation to Fifth Third and consider contacting the CFPB regarding the account.

The bottom line

“It seems like these allegations are more about hitting sales incentives, not stealing money,” Rossman says. “Still, you don’t want unauthorized accounts floating around out there, especially a credit card account that could be used to rack up charges.”