Capital One sued by CFPB for allegedly defrauding customers out of $2 billion

The Consumer Financial Protection Bureau (CFPB) is suing Capital One, alleging the bank illegally misled customers by not notifying them of account options that paid higher interest rates.

The federal government’s consumer watchdog claims Capital One’s practices meant millions of customers missed out on a combined $2 billion they could have paid in interest payments.

Capital One’s headquarters complex in McLean, Va. (J. David Ake/Getty Images/File)

In a complaint filed Tuesday, the CFPB accused Capital One of promising depositors that its 360 savings account offered one of the nation’s “top,” “best” and “highest” interest rates, but froze their rate at just 0.30%, even though deposit rates rose nationwide.

The CFPB also said Capital One kept 360 Savings depositors in the dark when it launched the 360 ​​Performance Savings account in 2019, which was identical except it had a significantly higher interest rate, reaching 4.35% in January 2024 .

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Capital One reportedly told branch employees not to proactively tell depositors they could switch accounts or send depositors to the bank’s account conversion unit unless they asked if conversions were allowed.

Director of the Consumer Financial Protection Bureau Rohit Chopra (Anna Moneymaker/Getty Images/File)

“Banks shouldn’t lure people in with promises they can’t deliver,” CFPB Director Rohit Chopra said in a statement.

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The CFPB said Capital One stopped offering 360 Savings to new customers when it introduced 360 Performance Savings, which now pays 3.8% annually, according to the bank’s website.

Tuesday’s lawsuit seeks civil penalties, restitution and other remedies for violations of the Consumer Financial Protection Act of 2010 and the Truth in Savings Act.

“We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits in advance of a change in administration,” Capital One said in a statement. “We strongly disagree with their claims and will vigorously defend ourselves in court.”

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McLean, Virginia-based The bank added that it marketed the 360 ​​Performance Savings account widely, including on national television, “with the simplest and most transparent terms in the industry” and that its 360 accounts all offer great rates.

Reuters contributed to this report.