FILE PHOTO: Signs are seen outside a Capital One bank in Manhattan, New York, U.S., November 12, 2021.
Andrew Kelly | Reuters
The Consumer Financial Protection Bureau announced Tuesday that it was suing capital one for misleading consumers about the interest rates on their savings accounts and “scamming” them out of more than $2 billion in interest.
The agency said in a statement that Capital One deceived holders of its “360 Savings” account by combining it with its newer, higher-yielding savings account option, the “360 Performance Savings” account. The bank allegedly did not notify 360 savings account holders about the new option and marketed the two products in a similar way to make customers believe they were the same.
However, according to the CFPB, the interest rates for the two options were substantially different. Capital One raised the interest rate on 360 Performance Savings from 0.4% in April 2022 to 4.35% in January 2024, while lowering and then freezing the rate on 360 Savings at 0.3 % between the end of 2019 and mid-2024, the agency said.
Despite its relatively low interest rate, the CFPB alleged, the 360 Savings Account was advertised as a high-interest savings account. The bureau said Capital One aimed to keep 360 Savings users in the dark about the higher-performance option by replacing all references to the account with the similarly named 360 Performance Savings option on its website, excluding to account holders of the marketing campaigns that advertise the highest performance. account and prohibit employees from notifying account holders about the 360 Performance Savings option.
“The CFPB is suing Capital One for defrauding families of billions of dollars in their savings accounts,” CFPB Director Rohit Chopra said in a news release. “Banks should not harass people with promises they cannot 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 pattern of filing last-minute lawsuits before a change in administration. We disagree with their claims and will vigorously defend ourselves in court,” the company said in a statement.
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.”
