Clean the fingerprint sensor. Use a bit of rubbing alcohol on a tissue. That should help.

 

LG G5 Fingerprint Scanner Not Working After Software Update

Solution: What you will want to do first in this case is to erase the stored fingerprint data in your phone then set it up again.

• From the Home screen navigate to Settings then to Lock screen.
• Tap Select screen lock.
• Tap Fingerprints.
• Touch and hold the fingerprint you wish to remove.
• Tap the Delete icon
• Tap DELETE to confirm.

Once all fingerprints are deleted proceed with the fingerprint recognition setup.

• From the Home screen navigate to Settings then to Lock screen.
• Tap Select screen lock.
• Tap Fingerprints.
• Review instructions, then tap NEXT.
• Using the on-screen prompts as a guide, lightly tap the Power button multiple times to scan your fingerprint.
• When finished, tap OK if finished or ADD MORE to continue adding fingerprints.

If the issue still persists after this then the next step is to check if the problem is caused by a software glitch. For this you will have to backup your phone data then do a factory reset. After the reset you will have to set up your phone again.

Should the above steps fail to fix the problem then you will need to bring the phone to a service center and have it checked.

 

I am having this same problem but it is a software issue and nothing works. Every now and then it will randomly work but it mostly just displays "cannot read your fingerprint if this continues restart your phone". I have reset, deleted apps redone my fingerprints cleaned the scanner... nothing works.

It is not even reading my fingerprint, I can tell this because it usually vibrates when it doesn't match but now it's doing absolutely nothing except displaying this annoying message over and over again while I try to put it the password.