In this article, the Consumer Financial Protection Bureau announced on Tuesday that it had filed a lawsuit against Capital One for allegedly misleading consumers regarding their savings account interest rates and causing them to lose over $2 billion in interest.
According to the agency, Capital One was accused of deceiving holders of its “360 Savings” account by confusing it with a newer and higher-yield savings account option called the “360 Performance Savings” account. The bank purportedly did not inform 360 Savings account holders about the newer option and marketed both products similarly, leading customers to believe they were the same.
The CFPB stated that the interest rates of the two options were significantly different. Capital One reportedly raised the interest rate of the 360 Performance Savings account from 0.4% in April 2022 to 4.35% in January 2024, while it allegedly reduced and then maintained the 360 Savings rate at 0.3% from late 2019 to mid-2024.
Despite the lower interest rate, the CFPB claimed that the 360 Savings account was promoted as a high-interest savings account. The bureau alleged that Capital One sought to keep 360 Savings users unaware of the higher-yield option by replacing all mentions of the account with the similarly named 360 Performance Savings option on its website, excluding account holders from marketing campaigns for the higher-yield account, and instructing employees not to inform account holders about the 360 Performance Savings option.
CFPB Director Rohit Chopra stated in a news release, “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.”
In response, Capital One refuted the allegations and claimed that it transparently marketed its 360 Performance Savings account. The company expressed disappointment with the CFPB’s actions and disagreed with the claims, asserting that it would vigorously defend itself in court.
Capital One also mentioned that the 360 Performance Savings product was widely marketed, including on national television, with what it described as the simplest and most transparent terms in the industry.
