Voluntary-payment doctrine
Klopfenstein v. Fifth Third Bank
Date: Sept. 29, 2026
Issue: Whether Ohio’s voluntary-payment doctrine applies when consumers voluntarily make payments with knowledge of the relevant facts but later challenge potentially conflicting price terms in their contracts.
Case Summary: ABA filed an amicus brief urging the Supreme Court of Ohio to uphold the voluntary-payment doctrine and confirm its application to contracts with conflicting price terms.
As background, Ohio’s voluntary-payment doctrine is a long-standing legal defense that generally prevents a person or business from recovering money they voluntarily paid if they had full knowledge of the relevant facts at the time.
In 2013, a group of borrowers sued Fifth Third Bank, alleging it falsely advertised its cash loan program by charging annual percentage rates (APRs) as high as 3,650% on loans issued through its Early Access program. According to the borrowers, Fifth Third advertised an APR of 120% for all Early Access loans. The borrowers sought $444 million in damages and asserted several claims, including violations of the Truth in Lending Act (TILA), fraud, breach of contract, and unjust enrichment.
Judge Michael Barrett of the Southern District of Ohio granted summary judgment for the borrowers on their TILA claims but dismissed their remaining claims under Ohio law. In 2019, a divided Sixth Circuit panel revived the breach-of-contract claim, determining the loan contracts contained conflicting definitions of “APR,” and remanded the case. On remand, Fifth Third argued the voluntary-payment doctrine barred the borrowers’ claims because they understood the fees and paid voluntarily.
In April 2023, a jury found that Fifth Third breached its contracts but upheld the bank’s voluntary-payment defense. The district court entered judgment for Fifth Third, and the borrowers appealed, arguing they paid under a mistake of fact because they did not know the true APRs. Fifth Third countered that the borrowers made a mistake of law by misunderstanding their contractual rights. On May 29, 2026, the Sixth Circuit certified two questions to the Ohio Supreme Court: how courts should define “relevant facts” under the voluntary-payment doctrine and whether the doctrine applies to contracts containing conflicting price terms.
In its brief, ABA argued that for more than a century, Ohio’s voluntary-payment doctrine has served critical commercial interests by promoting transparency, prompt dispute resolution, and commercial finality. ABA reiterated the voluntary-payment doctrine generally prevents parties from recovering payments they made voluntarily with full knowledge of the relevant facts, even if they later dispute the legal basis for those payments. ABA also pointed out that the voluntary-payment doctrine plays a vital role in banking, as financial institutions process millions of transactions and rely on settled payments to manage risk, maintain accurate records, and meet regulatory duties. ABA warned that allowing consumers to reopen past transactions based on new interpretations of contract terms would increase uncertainty, raise costs, and undermine confidence in the banking system.
In addition, ABA argued that standardized consumer contracts and regulated disclosures should not be subject to different voluntary-payment rules. Modern commerce relies on standardized agreements to ensure efficiency, consistency, and consumer protection. ABA emphasized that federal laws, including TILA and the Truth in Savings Act (TISA), require uniform disclosures to help consumers compare financial products and make informed decisions. The voluntary-payment doctrine, in ABA’s view, should apply regardless of whether parties use standardized or individually negotiated contracts, as long as consumers know the relevant facts surrounding their payments.
Finally, ABA argued the certified questions should be answered consistently with Ohio’s traditional distinction between facts and law. The voluntary-payment doctrine applies when consumers know the relevant facts surrounding a transaction, even if they later dispute their legal obligations under a contract. Accordingly, courts should treat misunderstandings of contract terms as mistakes of law rather than mistakes of fact. ABA emphasized that Fifth Third’s borrowers knew the amounts they borrowed, the fees they paid, and when repayment occurred. ABA stressed that their dispute over the APR concerned the legal effect of known facts, not a lack of factual knowledge.
Bottom Line: ABA urged the Supreme Court of Ohio to preserve the voluntary-payment doctrine and prevent consumers from recovering payments made with knowledge of the relevant facts based on later disputes over contract terms.
Document: Brief
