The Consumer Financial Protection Bureau (CFPB) is filing a lawsuit against the ninth-largest bank in the US for allegedly misleading and cheating customers out of billions of dollars in interest.
The CFPB alleges Capital One misled consumers into believing that its product known as “360 Savings” was offering the best and the highest interest rates in the US.
The CFPB, however, says Capital One kept the interest rates on the 360 Savings account low even as they were rising across the country. In the process, “Capital One avoided paying more than $2 billion in additional interest to millions of customers because of these actions.”
While marketing the 360 Savings account as offering attractive rates, Capital One simultaneously launched a similarly named product that was promising significantly higher rates, according to the CFPB.
“Around the same time, Capital One created a virtually identical product, “360 Performance Savings,” that differed from 360 Savings only in that it paid out substantially more in interest—at one point more than 14 times the 360 Savings rate. Capital One did not specifically notify 360 Savings account holders about the new product, and instead worked to keep them in the dark about these better-paying accounts.”
CFPB says that Capital One deliberately took steps to prevent 360 Savings account holders from finding out about the 360 Performance Savings account.
“For example, Capital One named and marketed the two products similarly; it eliminated nearly all references to the 360 Savings account product on its website and replaced them with references to the essentially identical 360 Performance Savings account, without notice that 360 Savings continued to exist as a distinct product; it excluded 360 Savings account holders from a marketing campaign advertising 360 Performance Savings to Capital One’s other existing customers; and it forbade its employees from proactively telling 360 Savings account holders about 360 Performance Savings.”
The lawsuit seeks to stop Capital One’s alleged unlawful conduct and offer compensation to harmed consumers if successful. The financial regulator’s director, Rohit Chopra, says,
“The CFPB is suing Capital One for cheating families out of billions of dollars on their savings accounts. Banks should not be baiting people with promises they can’t live up to.”
Capital One boasts a little over $483 billion in total assets as of September 30th of 2024, according to the Federal Reserve.
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