Bank accused of fraudulently opening customer accounts

Mar 20 2020      On Behalf of  David M. Duree & Associates, P.C.      Civil Rights And Consumer Protection

Many of our readers remember the scandal involving Wells Fargo back in 2016. Employees were opening millions of fake accounts for real customers in an effort to meet sales goals, which are typically tied to compensation. That was just one of the allegations of fraud against the bank.

At the end of 2018, Wells agreed to a multimillion-dollar settlement to resolve claims that it had violated consumer protection laws in every state and Washington, D.C. The Federal Reserve ordered it to make a number of reforms.

Now Fifth Third Bank, based in Cincinnati, is facing similar allegations regarding deposit and credit card accounts opened fraudulently for customers without their knowledge. According to a lawsuit filed by the Consumer Financial Protection Bureau (CFPB) earlier this month, these accounts were opened between 2008 and 2016.

According to the CFPB suit, which was filed in the Northern District of Illinois, Fifth Third employees transferred customers’ money from their existing accounts to the fraudulently opened ones. They also allegedly set up online banking services in their name without their knowledge or permission. As with the Wells Fargo case, employees reportedly took these actions to meet their goals.

The CFPB claims that people in management at Fifth Third were aware of these activities and did nothing to stop them. These are violations of several federal laws.

In response, Fifth Third has sought to try to minimize the number and dollar value of the accounts in question. It says that of the 10 million accounts that the CFPB reviewed, fewer than 1,100 were fraudulently opened. According to the bank’s chief legal officer, “These accounts involved less than $30,000 in improper customer charges that were ultimately waived or reimbursed to customers years ago.” The bank also claims that employee incentive compensation is linked to “account quality” and not the number of accounts or services sold.

Even if an illegally opened account is never used, it can impact their credit rating. Further, there is always the possibility that it could be used illegally without the customer’s knowledge.

While these situations are comparatively rare, it’s always wise to keep an eye on all your deposit accounts and credit cards — even the ones you never use. If you believe that someone employed by your financial institution has acted illegally or that it hasn’t adequately protected your accounts and/or money, find out what your legal options are.