Capital One class action settlement overview:
- Who: Capital One has agreed to a $425 million class action lawsuit settlement.
- Why: Capital One was accused of concealing details of a new product from legacy savings account holders.
- Where: The Capital One class action settlement was filed in Virginia federal court.
Capital One has agreed to pay $425 million to settle a class action lawsuit alleging it concealed details from legacy savings account holders when it launched a new product.
The plaintiffs alleged Capital One failed to pay 360 Savings account holders the same interest rate as 360 Performance Savings account holders after the bank launched the new account on Sept. 18, 2019.
They accused Capital One of concealing certain details about the new product in order to avoid paying existing customers the higher interest rate.
Capital One froze its 360 Savings account interest rate at 0.3% in 2022 but increased the 360 Performance Savings account interest rate to as high as 4.35%, the plaintiffs alleged.
The plaintiffs further argued that the disparity in returns between the two account products grew in earnest in 2022, when the Federal Reserve began to raise interest rates.
Capital One recently closed a $35.3 billion acquisition of Discover, making it the nation’s largest credit card issuer and eighth-largest bank.
Capital One denies any wrongdoing
Capital One denies any wrongdoing but agreed to pay $425 million to resolve the claims, including $300 million in pro rata payments to class members based on the amount of interest they would have earned if their 360 Savings account had paid the same interest rate as 360 Performance Savings accounts.
The remaining $125 million will represent additional interest payments to the roughly 75% of class members who continue to hold the legacy savings account product.
As part of the settlement, Capital One must maintain an interest rate on its 360 Savings accounts that is double the Federal Deposit Insurance Corporation’s calculation of the national average for savings deposit accounts.
A judge must sign off on the agreement for it to take effect. The formal settlement agreement will be filed by June 6, along with the plaintiffs’ motion seeking preliminary approval.
Capital One is currently facing another lawsuit claiming it left thousands of customers unable to access their bank accounts, process payments or receive direct deposits for multiple days in January.
What do you think about the Capital One class action settlement? Tell us your thoughts in the comments.
The plaintiffs are represented by Chet B. Waldman, Carl L. Stine, Philip M. Black, Matthew Insley-Pruitt and Timothy D. Brennan of Wolf Popper LLP and Matthew B. Kaplan of The Kaplan Law Firm.
The Capital One savings account class action settlement is In re: Capital One 360 Savings Account Interest Rate Litigation, Case No. 1:24-md-03111-DJN, in the U.S. District Court for the Eastern District of Virginia, Alexandria Division.
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277 thoughts onCapital One agrees to $425M settlement in savings account interest rate class action
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My accounts were offered to one I was going to school 2account was offered to because it was said that I drain my account of over spending when they realized that it wasnt me they didn’t even say sorry