For the second time in the past decade, Fifth Third Bank is facing a multi-million-dollar penalty from the Consumer Financial Protection Bureau (CFPB) involving its activities with auto financing.

The CFPB said on Tuesday that it’s taking enforcement actions against Fifth Third Bank for a range of illegal activities. The bank has been told to pay $20 million in penalties in addition to paying redress to approximately 35,000 harmed consumers, including about 1,000 who had their cars repossessed.

Specifically, the CFPB is ordering Fifth Third Bank to pay a $5 million penalty for forcing vehicle insurance onto borrowers who had coverage.

The CFPB also filed a proposed court order that would require Fifth Third Bank to pay a $15 million penalty for opening fake accounts in the names of its customers. The proposed court order bans Fifth Third Bank from setting employee sales goals that incentivize fraudulently opening accounts.

“The CFPB has caught Fifth Third Bank illegally loading up auto loan bills with excessive charges, with almost 1,000 families losing their cars to repossession,” CFPB director Rohit Chopra said in a news release. “We are ordering the senior executives and board of directors at Fifth Third to clean up these broken business practices or else face further consequences.”

In 2015, the CFPB took two actions against the bank. One was for discriminatory auto finance pricing, which was a joint action by the CFPB and U.S. Department of Justice. The other move was connected with illegal credit card practices.

For the discriminatory auto finance pricing action, Fifth Third Bank was ordered to pay $18 million to harmed Black and Hispanic borrowers. For the illegal credit card practices, the bank was ordered to pay $3 million to harmed consumers and a $500,000 penalty.

Officials said the newest action addresses the CFPB’s findings that Fifth Third Bank illegally triggered repossessions and charged illegal fees by forcing contract holders into “unnecessary and duplicative coverage policies.”

Between July 2011 and December 2020, the CFPB said more than 50% of the policies were charged to consumers who had either always maintained their own coverage or obtained the requisite coverage within a 30-day timeframe of their prior policy lapsing.

Specifically, the bureau said Fifth Third Bank’s conduct harmed borrowers by charging extra fees for unnecessary and duplicative coverage.

In more than 37,000 instances, the CFPB said Fifth Third Bank illegally charged fees that provided no value at all.

In some cases, officials found the policy was duplicative of coverage borrowers already had on their vehicles. 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.

The CFPB determined these consumers paid more than $12.7 million in “illegal, worthless fees.”

“While consumers received coverage with no value, Fifth Third Bank profited,” the CFPB said. “When the unnecessary or duplicative coverage was cancelled, borrowers were entitled to a refund of the illegally charged fees.

“But instead of refunding the money directly to borrowers, Fifth Third Bank 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 bureau continued.

Furthermore, the CFPB determined that the institution punished some consumers with repossessions.

Officials said Fifth Third Bank demanded consumers pay for coverage they did not need or else face delinquency, additional fees and repossessions.

The CFPB said Fifth Third Bank conducted repossessions of vehicles when the delinquency was caused by the bank charging unnecessary and duplicative coverage.