CNN reported that the information was sourced from New York.
The US government’s consumer watchdog agency is suing Capital One, accusing the bank of “cheating millions of consumers” by not paying over $2 billion in interest to customers who hold its high-interest savings accounts.
According to the Consumer Financial Protection Bureau (CFPB), Capital One has been accused of keeping the interest rates on its popular “360 Savings” accounts low, even as rates were increasing nationwide. Additionally, the bank introduced a new account with better interest rates without informing customers of the “360 Savings” account. As a result, consumers lost over $2 billion in interest payments.
“The CFPB has filed a lawsuit against Capital One, accusing them of deceiving families and causing them to lose billions of dollars on their savings accounts,” CFPB Director Rohit Chopra stated in a press release. He emphasized that banks should not entice people with false promises that they cannot fulfill.
Capital One expressed its disappointment with the CFPB’s decision to file lawsuits at the last minute before the change in administration.
A spokesperson from Capital One expressed strong disagreement with the claims and emphasized the company’s determination to vigorously defend themselves in court. They further stated that the new account had been extensively marketed, including on national television, with the aim of providing the simplest and most transparent terms in the industry.
Capital One is facing scrutiny for its marketing of the “360 Savings” account, which claimed to offer top, best, and highest interest rates in the nation. However, according to the Consumer Financial Protection Bureau (CFPB), the bank lowered and then froze the account’s interest rate at just 0.30% from 2019 to mid-2024, despite increasing rates nationwide.
In January 2024, a new account called “360 Performance Savings” was introduced, which saw an increase in rates from 0.40% in 2022 to 4.35%.
According to the CFPB, Capital One engaged in a scheme to prevent ‘360 Savings’ accountholders from accessing the higher-yielding ‘360 Performance Savings’ account by concealing its existence as a separate product.
The agency has filed a lawsuit to put an end to the bank’s unlawful conduct, seek redress for affected consumers, and impose civil money penalties.