Fifth Third Bank Opening of Unauthorized Accounts Class Action

According to the complaint for this class action, Fifth Third Bank pressured employees to cross-sell to customers. “Cross-selling was Fifth Third’s scheme to grow Bank revenue by requiring employees to sell increasing numbers of products to each customer.” Unfortunately, the complaint claims that this “toxic high-pressure sales environment” caused employees to open fraudulent accounts in customers’ names and perform other unauthorized operations.

The class for this action is all persons in the US in whose name Fifth Third or its employees opened a financial account or product without the person’s lawfully obtained authorization.

According to the complaint, Fifth Third “condition[ed] employee performance evaluations, promotion, and compensation decisions—and even continued employment—on whether managers, tellers, and other employees met increasingly aggressive sales goals. Fifth Third’s sales goals became so high that employees could not achieve them through legal or ethical means.”

What did the employees actually do? The complaint offers a list of allegations:

• They opened bank accounts in customers’ names.
• They applied for credit cards in customers’ names without telling the customers.
• They enrolled customers in payday loan and online banking services that the customers had not asked for.
• They charged fees for the accounts the customers had never authorized.
• They transferred money from customers’ real accounts to the new, fraudulent ones.

To do this, the complaint alleges, employees in ten states “accessed and used customers’ personal information without approval, forged signatures, misappropriated funds from customer accounts without authorization, and took other actions damaged to consumers’ credit in order to maintain the favor of their superiors and enrich Fifth Third and its high-level executives.”

The complaint contends that the bank knew about the fraudulent activity. “By 2008, the Bank and its senior management knew that its employees were opening credit accounts in customers’ names without customer consent because senior management had received a significant number of whistleblower complaints reporting employees for doing so.”

The complaint alleges that the fraudulent accounts harmed consumers in a number of ways:

• They were charged fees and other costs on the fraudulent accounts.
• Their credit scores suffered because of unauthorized credit inquiries and unpaid fees on accounts they didn’t know existed.
• Their lowered credit scores in turn affected their job applications, auto loan terms, and mortgage applications.
• They lost control of their own financial data.

Eventually, the Consumer Financial Protection Bureau (CFPB) filed a complaint against Fifth Third. The bank initially called the charges “unsubstantiated.” It admitted that between 2010 and 2016, Bank employees opened 1,100 unauthorized accounts, but it claimed it had resolved the issue “years ago, by waiving or reimbursing any improper charges to affected customers.”

The complaint alleges that even if the bank had done this, it would not have remedied the harm done to customers.

The complaint alleges violations of the Truth in Lending Act, Fair Credit Reporting Act, and Electronic Funds Transfer Act, among other things.

Article Type: Lawsuit
Topic: Consumer
Tags: Opening unauthorized accounts, Unauthorized Credit Reports or Credit Pulls, Your Bank