The Consumer Financial Protection Bureau yesterday announced it has filed a lawsuit against Capital One Financial Corp., accusing the financial services giant of misleading millions of customers and cheating them out of more than $2 billion in interest on savings accounts.
The core of the CFPB’s complaint centers on Capital One’s “360 Savings” account, which the bank marketed as offering one of the highest interest rates available in the market. However, the CFPB alleges that from 2019 onward, while interest rates were rising across the country, Capital One froze the interest rate for existing 360 Savings account holders at 0.30%. Meanwhile, the bank introduced a nearly identical product, the “360 Performance Savings” account, which paid out much higher interest, at times over 14 times more than the 360 Savings rate.
What’s at issue: The CFPB claims that Capital One intentionally obscured the existence of the higher-paying 360 Performance Savings account from 360 Savings accountholders. The bank allegedly used similar branding for both products and did not inform existing customers of the new, better option. This led many customers to unknowingly forfeit higher interest earnings.
- For years, Capital One promoted 360 Savings as a high-interest, low-maintenance account that promised to provide better returns than the average savings account. The CFPB’s lawsuit argues that, while the bank claimed to offer high returns, it failed to follow through on these promises, effectively deceiving customers.
- Capital One denied the allegations, stating it plans to vigorously defend itself in court. In a statement, a spokesperson criticized the timing of the lawsuit, suggesting it was part of a pattern of actions taken by the CFPB before a potential shift in political leadership.
