CFPB sues Capital One for ‘misleading’ customers out of more than $2 billion in interest

The Consumer Financial Protection Bureau announced Tuesday that it is suing Capital one for misleading consumers about the interest rates on their savings accounts and “misleading” them into losing more than $2 billion in interest.

The agency said in a statement that Capital One misled holders of its “360 Savings” account by confusing it with its new, higher-yielding savings account option, the “360 Performance Savings” account. The bank allegedly did not inform 360 savings account holders of the new option and marketed the two products in the same way to make customers believe they were the same.

However, the interest rates for the two options were significantly different, according to the CFPB. Capital One increased the 360 ​​Performance Savings interest rate from 0.4% in April 2022 to 4.35% in January 2024, while lowering and then freezing the 360 ​​Performance Savings interest rate at 0 .3% between the end of 2019 and mid-2024, the agency said.

Despite its relatively low interest rate, according to the CFPB, the 360 ​​savings account was marketed as a high-interest savings account. The bureau said Capital One aimed to keep 360 Savings users in the dark about the higher yield option by replacing all references to the account with the 360 ​​Performance Savings option of the same name on its website , excluding account holders from marketing campaigns advertising the higher return. account and prohibit employees from informing account holders of the 360 ​​Performance Savings option.

“The CFPB is suing Capital One for defrauding families out of billions of dollars from their savings accounts,” CFPB Director Rohit Chopra said in a press release. “Banks shouldn’t harass people with promises they can’t keep.”

In a statement, Capital One denied the allegations and said it transparently marketed its 360 Performance Savings account.

“We are deeply disappointed to see the CFPB continue its recent trend of filing last-minute lawsuits ahead of a change in administration. We strongly disagree with their assertions and will vigorously defend ourselves in court,” the company said in a statement. a press release.

The bank added that the 360 ​​Performance Savings product was “marketed widely, including on national television, with the simplest and most transparent terms in the industry.”