Capital One was sued by the Consumer Financial Protection Bureau on Tuesday for defrauding customers of over $2 billion in interest by lying to them about the interest rates on their savings accounts.
In a statement, the agency said that Capital One had misled its 360 Savings account customers by confusing it with the 360 Performance Savings account, a more recent and higher-yielding savings account choice. The bank reportedly misled clients into thinking the two products were the same by marketing them similarly and failing to inform 360 Savings account holders of the newer choice.
But according to the CFPB, the interest rates of the two options differed significantly. According to the agency, Capital One reduced and then frozen the 360 Savings rate at 0.3% between late 2019 and mid-2024, while raising the 360 Performance Savings interest rate from 0.4% in April 2022 to 4.35% in January 2024.
The CFPB claimed that the 360 Savings account was marketed as a high-interest savings account despite having a comparatively low interest rate. By replacing all references to the 360 Savings account on its website with the similarly named 360 Performance Savings option, excluding account holders from marketing campaigns promoting the higher-yield account, and prohibiting employees from informing account holders about the 360 Performance Savings option, the bureau claimed Capital One sought to keep 360 Savings users unaware of the higher-yield option.
According to a news release from CFPB Director Rohit Chopra, the agency is suing Capital One for defrauding families of billions of dollars from their savings accounts. Banks shouldn’t entice customers with unfulfilled promises.
Capital One said in a statement that it openly advertised its 360 Performance Savings account and refuted the accusations.
The CFPB’s recent practice of bringing last-minute litigation before an administration transition has left us extremely upset. In a statement, the business stated that it “strongly disagrees with their claims and will vigorously defend ourselves in court.”
The bank noted that the 360 Performance Savings product had the clearest and most straightforward terms in the business and was extensively advertised, including on national television.
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