The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit in federal district court in the Northern District of Illinois
against Fifth Third Bank, alleging that for several years Fifth Third, without consumers’ knowledge or consent: Opened deposit and credit-card accounts in consumers’ names; transferred funds from consumers’ existing accounts to new, improperly opened accounts; enrolled consumers in unauthorized online-banking services; and activated unauthorized lines of credit on consumers’ accounts. The CFPB alleges that Fifth Third violated the Consumer Financial Protection Act’s prohibition against unfair and abusive acts or practices, as well as the Truth-in-Lending Act and the Truth-in-Savings Act and their implementing regulations.
The CFPB specifically alleges that for years and continuing through at least 2016, Fifth Third used a “cross-sell” strategy to increase the number of products and services it provided to existing customers; used an incentive-compensation program to reward selling new products; and conditioned employee-performance ratings and, in some instances, continued employment on meeting ambitious sales goals. The CFPB further alleges that, despite knowing since at least 2008 that employees were opening unauthorized consumer-financial accounts, Fifth Third took insufficient steps to detect and stop the conduct and to identify and remediate harmed consumers.
Reasonable sales goals and performance incentives are not inherently harmful. But when such programs are not carefully and properly implemented and monitored, as the CFPB alleges here, they may create incentives for employees to engage in misconduct in order to meet goals or earn additional compensation.
The CFPB seeks an injunction to stop Fifth Third’s unlawful conduct, redress for affected consumers, and the imposition of a civil money penalty, and the complaint is not a finding or ruling that Fifth Third has violated the law.