The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the bank of misleading customers and denying them more than $2 billion in interest. The federal agency alleges that Capital One failed to inform holders of its 360 Savings account about a higher-yield product, effectively keeping customers locked into accounts with significantly lower interest rates.
"The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts," said CFPB Director Rohit Chopra in a statement. "Banks should not be baiting people with promises they can't live up to."
According to the CFPB, Capital One's 360 Savings account was marketed as offering some of the best interest rates available. However, the agency claims the bank introduced a newer product, the 360 Performance Savings account, with interest rates that rose from 0.4% in April 2022 to 4.35% in January 2024. Meanwhile, the 360 Savings account's rate was lowered and eventually frozen at 0.3%.
The lawsuit alleges that Capital One deliberately obscured the differences between the two accounts by giving them similar names and excluding existing 360 Savings account holders from marketing campaigns for the 360 Performance Savings account. Furthermore, employees were reportedly instructed not to inform customers about the newer, higher-yield option.
The CFPB claims this strategy allowed Capital One to benefit financially by keeping customers in lower-interest accounts while promoting the higher-yield product only to new clients. The agency has described this practice as a "scheme" to mislead consumers.
Capital One has denied the allegations, stating that it has always marketed its products transparently. "We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh-hour lawsuits ahead of a change in administration," the bank said in a statement. "We strongly disagree with their claims and will vigorously defend ourselves in court."
The bank also argued that the 360 Performance Savings product was "marketed widely, including on national television, with the simplest and most transparent terms in the industry."
The CFPB's lawsuit seeks to end what it describes as Capital One's unlawful practices. The agency also aims to recover civil penalties to be added to its victims' relief fund, which provides compensation to consumers harmed by violations of federal financial laws.
The CFPB alleges that Capital One replaced all references to the 360 Savings account with the 360 Performance Savings account on its website while continuing to advertise the former as a high-interest product. The bureau further claims that this misrepresentation kept account holders unaware of the higher-yield alternative.
