The Consumer Financial Protection Bureau (CFPB) has filed a lawsuit against Capital One, accusing the financial institution of "cheating" customers out of more than $2 billion in interest. The lawsuit claims that Capital One engaged in deceptive marketing practices to obscure differences between two of its savings-account options, the "360 Savings" account and the "360 Performance Savings" account. The CFPB alleges that these practices misled consumers, resulting in substantial financial disadvantages for those holding the lower-yielding account.
According to the CFPB, Capital One replaced all references to the "360 Savings" account with the "360 Performance Savings" account on its website, misleading consumers into believing both accounts offered similar benefits. Additionally, the CFPB claims that Capital One excluded "360 Savings" users from marketing campaigns that advertised the higher-yield "360 Performance Savings" account, which had a significantly higher interest rate. Employees were reportedly instructed not to inform "360 Savings" account holders about the more lucrative "360 Performance Savings" option.
The differences in interest rates between the two accounts are at the core of the CFPB's allegations. While the "360 Performance Savings" account's interest rate increased from 0.4% in April 2022 to 4.35% in January 2024, the "360 Savings" account's rate was lowered and then frozen at 0.3% from late 2019 to mid-2024. The CFPB contends that Capital One's failure to notify "360 Savings" account holders of the newer, higher-yielding option was both deceptive and unfair.
CFPB Director Rohit Chopra announced the lawsuit in a news release, emphasizing the agency's stance against misleading banking practices.
"Banks should not be baiting people with promises they can't live up to." – CFPB Director Rohit Chopra
In response to the allegations, Capital One has denied any wrongdoing. The bank insists that it marketed its "360 Performance Savings" account transparently and fairly.
"We are deeply disappointed to see the CFPB continue its recent pattern of filing eleventh hour lawsuits ahead of a change in administration. We strongly disagree with their claims and will vigorously defend ourselves in court," – Capital One
Capital One further stated that its savings products were widely marketed.
"marketed widely, including on national television, with the simplest and most transparent terms in the industry" – Capital One
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