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In a major legal move, on January 14th, the Consumer Financial Protection Bureau (Washington DC) (CFPB) has initiated a lawsuit against Capital One, N.A. and its parent company, Capital One Financial Corp., claiming the bank misled millions of consumers and cost them over $2 billion in interest. 

The CFPB’s allegations center on Capital One’s promotion of its “360 Savings” account as offering one of the best interest rates in the country. 

However, while interest rates were climbing nationwide, Capital One kept the rate for 360 Savings at a low level.

Concurrently, the bank rolled out a nearly identical product, “360 Performance Savings,” which provided substantially higher interest rates—at one point, exceeding the 360 Savings rate by more than 14 times. 

Capital One did not inform existing 360 Savings customers about this new, more profitable option, actively concealing it from their view. 

This alleged lack of transparency cost millions in lost interest payments, prompting the CFPB to seek an end to these practices, financial restitution for affected consumers, and the imposition of civil penalties that would benefit the CFPB’s victims relief fund.

CFPB Director Rohit Chopra emphasized the seriousness of the allegations, stating that Capital One’s actions have resulted in billions of dollars being taken from families through their savings accounts. He insisted that banks should not lure consumers with unrealistic promises.

Capital One, headquartered in McLean, Virginia, manages assets exceeding $480 billion, offers a variety of deposit account products, and previously acquired ING Direct USA in 2012.

 The bank subsequently rebranded ING Direct’s popular online savings account as the “360 Savings” account in 2013, marketed as a high-interest option.

Despite claims of offering competitive rates, the interest for the 360 Savings account was frozen at just 0.30% from late 2019 to mid-2024, even as rates rose elsewhere. 

On the other hand, the 360 Performance Savings account gained traction with a rate increase from 0.40% in April 2022 to 3.30% by January 2023, and further to 4.35% as of January 2024. 

The CFPB alleges that Capital One deliberately obscured the 360 Performance Savings account from 360 Savings customers to keep them in the lower-yielding accounts.

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This information was first published at www.consumerfinance.gov

https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-capital-one-for-cheating-consumers-out-of-more-than-2-billion-in-interest-payments-on-savings-accounts/