A U.S. watchdog has filed a lawsuit against Capital One, accusing the bank of deceiving consumers regarding its high-interest savings accounts and causing them to lose over $2 billion in interest payments. The Consumer Financial Protection Bureau (CFPB) alleges that Capital One misled customers about its '360 Savings' accounts, which were marketed as offering one of the nation's highest interest rates.
The complaint states that Capital One froze the interest rate on its 360 Savings accounts at a low level for several years, despite national rate increases. The bank introduced '360 Performance Savings' with a significantly higher rate but failed to inform 360 Savings accountholders about this new option, keeping them unaware of the better rates available.
The CFPB claims that Capital One's actions resulted in the bank avoiding billions in interest payments to millions of consumers. The agency is seeking civil penalties and financial relief for those affected by the alleged misconduct.
Responding to the allegations, Capital One expressed strong disagreement and plans to defend itself in court. The bank emphasized that all its 360 banking products offer competitive rates and are easily accessible to both new and existing customers without restrictions.
As of now, 360 Savings accounts have an interest rate of around 0.50%, while 360 Performance Savings accounts offer approximately 3.74% interest. The CFPB highlighted that the rate disparity between the two account types has been significant, with 360 Performance Savings rates being over 14 times higher than 360 Savings rates in the past.
The CFPB's complaint reveals that Capital One maintained the 360 Savings rate at 0.30% from December 2020 to at least August 2024, while the 360 Performance Savings rate increased to 4.25% during the same period. The lawsuit comes shortly before the inauguration of the new administration, raising questions about the future of such enforcement actions under the incoming leadership.
