The CFPB is suing Capital One for ‘cheating’ customers out of more than $2 billion in interest
FILE PHOTO: Signs are seen outside Capital One Bank in Manhattan, New York, U.S., on November 12, 2021.
Andrew Kelly | Reuters
Office for Financial Protection of Consumers announced Tuesday that it was sued Capital one for misleading consumers about the interest on their savings accounts and “cheating” them out of more than $2 billion in interest.
The agency said in a statement that Capital One misled owners of its “360 Savings” account by identifying it with its newer, higher-yielding savings account option, the “360 Performance Savings” account. The bank allegedly failed to inform 360 Savings account holders about the newer option and advertised the two products similarly to trick customers into believing they were the same.
However, according to the CFPB, the interest rates of the two options were significantly different. Capital One increased the 360 Performance Savings rate from 0.4% in April 2022 to 4.35% in January 2024, while reducing and then freezing the 360 Savings rate at 0.3% between late 2019 and mid-2024. , the agency announced.
Despite the relatively low interest rate, the CFPB claims, the 360 Savings Account was advertised as a high-interest savings account. The bureau said Capital One aims to keep 360 Savings customers in the dark about the higher yield option by replacing all references to the account with the similarly named 360 Performance Savings option on its website, excluding account holders from marketing campaigns touting the account’s higher yields and prohibit employees from informing account holders about the 360 Performance Savings option.
“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 press release. “Banks shouldn’t lure people in with promises they can’t keep.”
In a statement, Capital One denied the allegations and said it marketed its 360 Performance Savings account transparently.
“We are deeply disappointed to see the CFPB continue its recent pattern of filing complaints within the eleventh hour before a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court,” the company said in a statement.
The bank added that the 360 Performance Savings product was “widely marketed, including on national television, with the simplest and most transparent terms in the industry.”
