Capital One lawsuit alleges bank cheated consumers out of $2B

Capital One lawsuit overview:

• Who: The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Capital One, N.A. and its parent company, Capital One Financial Corp.
• Why: The CFPB claims Capital One engaged in deceptive practices that resulted in consumers losing more than $2 billion in potential interest earnings on their Capital One savings accounts.
• Where: The Capital One lawsuit was filed in Virginia federal court.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Capital One over claims the company cheated consumers out of more than $2 billion in potential interest earnings on their savings accounts.

The CFPB argues Capital One misled consumers about its 360 Savings accounts and obscured its higher-interest Capital One savings account product from them, in violation of the Truth in Savings Act.

“Banks should not be baiting people with promises they can’t live up to,” CFPB Director Rohit Chopra said, in a statement.

The agency argues Capital One froze interest rates for its 360 Savings accounts at a low level while rates rose nationwide, despite promising the Capital One savings account provided one of the nation’s “best” and “highest” interest rates. 

Capital One also created a virtually identical product, “360 Performance Savings,” around the same time that differed from 360 Savings in that it paid out substantially more in interest, yet failed to notify 360 Savings account holders about the new product, the CFPB alleges. 

“Capital One did not specifically notify 360 Savings accountholders about the new product, and instead worked to keep them in the dark about these better-paying accounts,” the agency said. 

Capital One misled consumers about ‘high interest’ accounts, CFPB claims

The CFPB claims Capital One cost consumers more than $2 billion in lost interest payments by allegedly obscuring its 360 Performance Savings product from its 360 Savings account holders. 

The Capital One lawsuit seeks to stop its allegedly unlawful conduct, provide redress for harmed consumers, and impose civil money penalties which would be paid into the CFPB’s victims relief fund.

In other news involving Capital One, a pair of consumers filed a class action lawsuit against the bank holding company and the financial services company Discover in July 2024 in an effort to prevent a merger between the two companies over concerns it would reduce competition in the credit card market. 

What do you think about the allegations in the Capital One class action lawsuit? Join the discussion in the comments.

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