What is Fifth Third Bank (FTB) and why is it in the news so often over the years? FTB is a bank that has 1,100+ branches in 11 states, and has recently been the subject of numerous lawsuits due to alleged deceptive and predatory practices.
The bank has been accused of charging hidden fees, misleading customers about account balances, and failing to properly disclose overdraft fees. In addition, the bank has been sued for falsely representing that its services are free when they actually come with hidden charges.
The lawsuits have resulted in hundreds of millions of dollars in settlements to customers who were wronged by Fifth Third Bank. So, here are ten of the biggest (both monetarily and morally) Fifth Third Bank Lawsuits in Company History.
1. Pugh vs. Fifth Third Bank – Michigan Discrimination Lawsuit
We chose this 2022 lawsuit as #1 among the 10 Biggest Fifth Third Bank Lawsuits in Company History because it was brought against this institution by an individual, not a company, government agency, class action group, or other institution like most of the others, and involves a greater social issue.
This lawsuit involves a 71-year-old black lady in Livonia, MI, who sued Fifth Third over their cashiers refusing to cash a check for her. It was a five-figure Soaring Eagle Casino & Resort jackpot check and the bank employees assumed it to be fraudulent. The woman described the experience as stressful and humiliating, hence the lawsuit.
The employees were white and kept insisting that the check wasn’t real and even went so far as to refuse to give it back to her once they had it in their hands. Eventually, they did give it back, and she took it to a nearby JPMorgan Chase branch. There, the check in question was deposited and it was cleared without any further issues.
What is “Banking While Black”?
The lawsuit contends that all of this wouldn’t have happened if the woman had been white, not black. According to bankingdive.com, “Banking while Black” is a phrase that reveals numerous search engine results about Black Americans being accused of fraud when cashing or depositing checks.
Banking While Black is a term used to describe the systemic racism and discrimination that African Americans often face when trying to access financial services.
Historically, banks have been known to deny Black people loans, mortgages, and other financial products based on their race, even when they have good credit and are financially capable of repaying them.
This has caused disparities in wealth between White and Black households, as well as limited economic opportunities for African Americans. The Banking While Black movement seeks to address this issue by advocating for greater banking accessibility for minority communities.
2. Manhattan US Attorney vs. FTB- Self-Reporting Failures
Our extensive research shows this to be the most expensive settlement to date that has been paid by FTB at $85,000,000. The bank has acknowledged, admitted, and accepted the responsibility for the self-reporting violations, including the fact that:
- Within two months of the initial discovery, the bank was required to self-file a report to HUD of any fraud, patterns of non-compliance, or serious deficiencies ;
- FTB failed in its timely self-reporting to HUD of the materially defective loans pursuant to all HUD requirements.
- During the period 2003-2013, FTB’s quality control program identified 1,436 residential mortgage loans that were materially defective and not eligible for FHA insurance through post-closing reviews;
- Within 60 days of discovering serious deficiencies, patterns of noncompliance, or fraud, the bank was required to notify HUD.
The matter had come to light, in part, due to a whistleblower complaint that was filed under the False Claims Act. However, FTB had already submitted its voluntary disclosure to the Government prior to any knowledge of the complaint, which was filed under the Government’s investigation seal regarding the whistleblower complaint.
One requirement of The False Claims Act is that all whistleblowers must use a lawyer for filing qui tam lawsuits and specific procedures also have to be followed to ensure that all of such cases are filed under seal. The existence of said sealed files is never disclosed to anyone other than the government.
The Government intervened, entering into the settlement to resolve the case, which was handled by their office’s Civil Frauds Unit. Since then, FTB has taken substantial steps in the direction of reforming its entire quality control program, which included terminating the bank personnel who were responsible for the failure to self-report to HUD any/all materially defective loans.
3. Sat Narayan (et al.) v. Fifth Third Bank, (et al.) – Telemarketing Class Action Lawsuit
Several banks, including Wells Fargo and Fifth Third Bank, were accused in 2022 of defrauding business owners in a class action lawsuit. The suit alleged that the banks regularly employed the practice of hiring telemarketers, Ironwood Financial LLC and International Payment Services LLC, for the purpose of selling debit and credit card payment processing services to a number of businesses nationwide.
The plaintiffs alleged that, without their permission, Fifth Third Bank and its affiliates, National Processing Co. and Vantiv Inc., were secretly recording the conversations with their potential customers.
$50 Million Settlement
The settlement in Illinois federal court amounted to $50 million, almost double the $28 million in the Wells Fargo settlement and close to three times the previous $18 million record settlement achieved under the California Invasion of Privacy Act. To put it all in perspective, the members of the class action suit will probably only receive hundreds of dollars apiece.
4. ATM & Credit Card Fees Class Action Lawsuit
A lawsuit was filed in March 2021 by a group of customers who allege that the bank charged them excessive overdraft fees on their accounts without proper notification or authorization. The lawsuit is seeking class-action status and monetary damages for all affected customers.
Another Separate Lawsuit Just One Month Later
Additionally, Fifth Third Bank is facing a separate lawsuit filed in April 2021 by two other customers alleging that they were illegally charged late payment fees on their credit cards. The Court granted final settlement approval on Sept. 8, 2021, making the affected customers eligible to receive a share of $5.2 million.
5. CFPB vs. Fifth Third Bank- Consumer Fraud Lawsuit
The Fifth Third Bank was sued in 2020 by the Consumer Financial Protection Bureau (CFPB) for allegedly engaging in unfair and deceptive practices that resulted in consumer fraud. The CFPB alleges that the bank failed to disclose important information about its deposit accounts, including overdraft fees and other costs associated with them, which could have caused consumers to lose money if they weren’t aware of those fees.
The CFPB is seeking restitution for affected customers as well as civil penalties from Fifth Third Bank. According to fslawfirm.com, the bank willfully exposed thousands of its customers to unlawful practices that risked their financial well-being, despite knowing they were trusting it with their hard-earned money.
The practice of banks promoting self-enrichment practices at the expense of their own customers has become all too common. Consumers in the United States whose accounts or products were opened without their lawfully-obtained consent will be represented in the class action lawsuit.
As part of this class action, the Plaintiffs are seeking damages under the FCRA (Fair Credit Reporting Act), the ICFA (Illinois Consumer Fraud Act), as well as other Illinois state laws.
6. FTB Employees Stealing From Customers
Although this case didn’t involve actual charges against FTB itself, it’s included in this 10 Biggest Fifth Third Bank Lawsuits in Company History because 11 suspects faced federal charges of allegedly stealing from bank customers in Cincinnati.
According to the U.S. Attorney, in 2020, five of those suspects were working for FTB as customer service representatives and were allegedly recruited for their jobs via social media. The other suspects allegedly paid those employees to steal the account information of bank customers who had high cash balances.
How They Did It
They accomplished the thefts by making fake IDs that contained the customers’ stolen info only with pictures of recruited individuals that they called “runners”. The organizers of the scheme would often choose drug addicts or homeless people. They would then purchase appropriate clothing for them for the purpose of going to the bank. Those runners would then withdraw between $3,000 and $8,000 and receive a minimal payment for their part in stealing the money.
FTB Helps Law Enforcement With the Case
According to FTB’s attorney, the bank had the necessary protective measures in place for helping employees with the process of identifying any potential misuse of their customers’ information. Having failed at stopping the ongoing thefts, moving forward, FTB will use those measures to help officials to hold the alleged fraudsters accountable for their actions. He also stated that the bank should be commended for the fact that they came forward to work together with law enforcement in the case.
7. Klopfenstein v. Fifth Third Bank-Class Action Lawsuit
In this particular class action lawsuit, the Plaintiffs claimed that the bank misrepresented annual percentage interest rates (“APR”) associated with its Early Access loans by charging higher interest rates on those specific loans. FTB denied the allegations and claims in the lawsuit, stating that it did absolutely nothing wrong.
FTB stated that the Early Access loan payment terms were clear, correct, and unambiguous. Their official statement also included reasoning that include the fact that the Early Access loan representations hould have been quite easy for customers to understand, therefore no breach of contract existed.
8. Schulte (et al.) v. Fifth Third Bank- NSF Class Action Lawsuit
This class action against FTB was tentatively settled. The notification program for the class action started on November 29, 2010, as ordered by the United States District Court for the Northern District of Illinois (the “Court”). It was aimed at alerting consumers who currently have or previously had a bank account with FTB regarding a proposed class action settlement.
Allegations in the Lawsuit
The suit alleged that FTB had assessed NSF overdraft fees improperly on ATM withdrawals and/or debit card purchases via the use of “re-sequencing” the transactions for the express purpose of maximizing the total number of overdraft fees. FTB denied all of the Plaintiffs’ claims, stating that it did nothing wrong.
9. Upsher-Smith Laboratories vs. Fifth Third Bank- Fraudulent International Wire Transfers
It happens to be one of the oldest scams out there and it’s commonly called “CEO spoofing” but it cost a drug company millions, according to the court documents in the suit, so they sued the bank over the damages.
In 2016, Fifth Third Bank was sued by Upsher-Smith Laboratories, a Minnesota drugmaker, that alleges it lost almost $40 million via fraudulent international wire transfers.
They also alleged that the bank was guilty of ignoring the many red flags, which should have served to alert bank employees to the crime. The lawsuit by the privately-held drug company also alleged that the bank made those transfers on the orders of one Upsher-Smith employee in the accounts payable department without confirmation from anyone else at Upsher-Smith that the transactions were indeed legitimate.
What Were the Red Flags?
The drug company’s lawsuit alleged that the FTB missed multiple red flags, which included:
- The wire transfer requests’ extremely rushed nature,
- The scammers insisting on total confidentiality,
- The complete departure from all of the ordinary procedures,
- The failure to include an additional person on all requests (as per normal procedures and protocols),
- The excessive amounts of the transfers,
- The frequency of the transfers,
- The suspicious beneficiaries (included one called “Sunny Billion Limited”).
10. McGarity v. Fifth Third Bank
This 2021 lawsuit alleged that entries on the plaintiff’s credit report were the result of identity theft and that the bank refused to address the issue. Plaintiff alleges that he contacted the bank on several occasions and that Experian removed the negative item from his credit report only to have the bank put it back on again.
Due to a failure to appear on the part of the Plaintiff, as well as other causes, this case against Fifth Third Bank was subsequently dismissed with prejudice.
This suit was included because identity theft and incorrect entries on credit reports with all three major credit bureaus run rampant today. It also shows that, in many cases like this one, no amount of evidence, including police reports, can fix the problem without the help of a consumer protection plan against identity theft.