Capital One accused of ‘cheating millions of customers’ out of interest payments

On By Littum


New York
CNN
—

Capital One is being sued by the US government’s consumer watchdog for “defrauding millions of consumers” and failing to pay more than $2 billion in interest to holders of its high-interest savings accounts.

The Consumer Financial Protection Bureau (CFPB) is accusing Capital One of freezing interest rates on its flagship “360 Savings” accounts at low levels despite rates rising nationwide, saying the bank launched a new account that offered better interest rates without to tell “360 Savings” customers. As a result, this decision cost consumers more than $2 billion in lost interest payments.

“The CFPB is suing Capital One for defrauding families out of billions of dollars in their savings accounts,” CFPB Director Rohit Chopra said in a release. “Banks shouldn’t lure people in with promises they can’t deliver.”

Capital One said in a statement that it is “deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits in advance of a change in administration.”

“We strongly disagree with their allegations and will vigorously defend ourselves in court,” a Capital One spokesman said, adding that the new account was “broadly marketed, including on national television, with the simplest and most transparent terms in the industry .”

At issue is Capital One’s marketing of the “360 Savings” account, which used words like “one of the nation’s,” “top,” “best” and “highest” to describe the interest earned on it. However, the CFPB said that from 2019 to mid-2024, the bank “lowered and then froze the ‘360 Savings’ branch rate to just 0.30%, even as rates rose nationwide.”

Around that time, a new “360 Performance Savings” account was launched, increasing rates from 0.40% in 2022 to 4.35% in January 2024.

The CFPB stated that Capital One “planned to keep ‘360 Savings’ account holders in their lower yielding accounts by disguising the existence of ‘360 Performance Savings’ as a separate product with a higher rate from ‘360 Savings’ account holders.”

The agency said the lawsuit seeks to stop the bank’s “unlawful conduct, provide damages to injured consumers and impose civil monetary penalties.”