The Consumer Financial Protection Bureau (CFPB) sued Capital One for allegedly deceiving customers and putting its bottom line over transparency by hiding information from customers of high-interest savings accounts, and forcing consumers to give up more than $2 billion in interest payments.
Complaint details allegations of misleading practices
In a complaint filed, the CFPB contends Capital One promoted “360 Savings” accounts as having some of the nation’s highest interest rates. But the bank allegedly kept the interest rate very low for a number of years, despite increased national rates. During this time, Capital One was simultaneously offering much higher interest rates in their “360 Performance Savings” account. At one juncture, interest in the “360 Performance Savings” account was more than 14 times that of the original “360 Savings” accounts. The CFPB argues that Capital One did not inform its existing customers with a 360 Savings account about this new, higher-paying account and kept those consumers in the lower-yielding product.
Impact to consumer
The CFPB said these actions caused millions of consumers to lose more than $2 billion in interest payments they might have earned. According to Director Rohit Chopra, “Banks should not be baiting people with promises they can’t live up to.”
Capital One’s response
In a response to the lawsuit filed, Capital One said it strongly disagrees with the allegations. It would “vigorously defend” itself in court, adding that it was “deeply disappointed” by the actions of the CFPB. In its own comments, Capital One declares that all 360 banking products “offer great rates”, “have always been available in just minutes to all new and existing customers without any of the usual industry restrictions.”
Current interest rates
As of recent disclosures, Capital One 360 Savings accounts pay an interest rate of just under 0.50%, while the 360 Performance Savings accounts pay an interest rate of about 3.74%. That means the rate for 360 Performance Savings is nearly 7.5 times higher than today’s rate for 360 Savings. The CFPB says that as of July 2024, the 360 Performance Savings rate was over 14 times that of 360 Savings.
Litigation and potential penalty
The CFPB’s complaint asks that Capital One cease the allegedly unlawful conduct, provide redress to affected consumers, and pay civil money penalties, which would be deposited into the CFPB’s victims relief fund. The resolution of this matter could have important implications for Capital One and its customers.
Consumer issues
In an effort to combat this practice, the Bureau asks any consumers who may have been affected to study their account statements and contact them or a financial advisor for consultation. The CFPB also has resources on its website through which consumers can lodge complaints about any financial products or services.
