A U.S. watchdog is suing Capital One for allegedly deceiving customers about its high-interest savings account options and “cheating” them out of almost $2 billion in monthly payments.
The Consumer Financial Protection Bureau criticized Capital One’s claims and management of its “360 Savings” accounts in a complaint submitted on Tuesday.
The CFPB claims that Capital One kept its interest rate low for several years, even while rates increased across the country, despite marketing 360 Savings as an account offering one of the country’s highest interest rates.
The bank established “360 Performance Savings” at the same time, which experienced a far greater rate increase, the CFPB continues.
However, the agency claims that Capital One “instead worked to keep them in the dark” and failed to inform 360 Savings accountholders about this new offering.
It also claims that the company prohibited employees from “proactively telling” people with 360 Savings accounts about 360 Performance Savings and that it marketed the products similarly to hide their differences.
Laptops 1000The CFPB stated in its lawsuit on Tuesday that Capital One “illegally avoided paying billions in interest to millions of consumers” as a result of these acts.
According to the agency, it wants to give affected parties financial assistance and enforce civil penalties.
“In a prepared statement, CFPB Director Rohit Chopra stated that banks shouldn’t be luring customers with promises they can’t fulfill.”
Capital One responded by stating that it would “vigorously defend” itself in court and that it strongly disagreed with the CFPB’s accusations.
“Deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration,” the banking behemoth continued.
Additionally, Capital One insisted that all 360 of its banking products “offer great rates” and have “always been available in just minutes to all new and existing customers without any of the usual industry restrictions.”
The interest rate for 360 savings accounts is now a little less than 0.50%, per disclosures on the Capital One website.
The interest rate on 360 Performance Savings accounts is approximately 3.74%.
This indicates that 360 Performance Savings has a rate that is over 7.5 times more than 360 Savings’ current rate.
However, according to the CFPB, they had previously been more distant.
The government states in Tuesday’s complaint that the 360 Performance Savings rate exceeded 14 times that of 360 Savings in July 2024.
From December 2020 to at least August 2024, Capital One allegedly maintained the rate on its 360 Savings accounts at 0.30%, according to the CFPB.
However, the government reported Tuesday that the rate for 360 Performance Savings increased from 0.40% in April 2022 to 4.35% at the beginning of 2024, then decreased a little to 4.25% by August.
President-elect Donald Trump’s inauguration on January 20 is less than a week away from the CFPB’s lawsuit against Capital One.
Some people believe that this lawsuit may still go on even after the administration changed.
For instance, the CFPB continued to pursue enforcement actions during Trump’s first term, according to analyst comments from TD Cowen on Tuesday, even though it might be simpler to resolve such lawsuits under the next government.
