Fifth Third Bank agreed this week to pay a $5 million fine for illegally forcing vehicle insurance onto borrowers who had coverage. Fifth Third also agreed to pay a $15 million fine for illegal sales practices.

The Cincinnati, Ohio-based bank demanded borrowers pay for coverage they did not need or else face delinquency, additional fees, and repossessions, according to a statement from the Consumer Financial Protection Bureau (CFPB).

The CFPB estimates that Fifth Third’s actions affected 35,000 harmed consumers, including about 1,000 who had their cars repossessed.

“While consumers received coverage with no value, Fifth Third Bank profited,” the agency said.

The CFPB found that in more than 37,000 instances, Fifth Third illegally charged fees that provided no value at all, and in some cases, a policy was duplicative of coverage borrowers already had on their vehicles.

An investigation by the CFPB found that some cases involved the consumer obtaining the requisite coverage within 30 days of lapse and did not have the force-placed policy canceled in its entirety. Borrowers paid over $12.7 million in illegal, worthless fees.

When the unnecessary or duplicative coverage was cancelled, borrowers were entitled to a refund of the illegally charged fees. Instead of refunding the money directly to borrowers, Fifth Third applied the refunds to consumers’ outstanding loan balances. Fifth Third also reinsured its coverage program and made millions by getting paid fees that far exceeded any claim losses under the program, the CFPB found.

“Today’s settlement concludes both the sales practices litigation with the CFPB, and its separate investigation into certain auto finance servicing activities related to a collateral protection insurance program that the Bank shut down in 2019 before the CFPB began its investigation,” said Susan Zaunbrecher, chief legal officer of Fifth Third.

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